Discontinued Operations

12 Months Ended

May 29, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued OperationsAs discussed in Note 1 – Organization, Basis of Presentation, and Summary of Significant Accounting Policies – Eat Smart Sale and Discontinued Operations, on December 13, 2021, we completed the Eat Smart Disposition. Eat Smart represented a component of the business within the Curation Foods segment and its sale represents a strategic shift in the Company going forward. Accordingly, concurrent with the execution of the Asset Purchase Agreement, Eat Smart meets the accounting requirements for reporting as discontinued operations for all periods presented.

The key components of loss from discontinued operations for the fiscal years ended May 29, 2022, May 30, 2021, and May 31, 2020 were as follows (in thousands):

	Year Ended
	May 29, 2022		May 30, 2021		May 31, 2020
Product sales	$	186,755	$	372,615	$	430,300
Cost of product sales	181,555		341,612		394,699
Gross profit	5,200		31,003		35,601
Operating costs and expenses:
Research and development	1,918		2,799		3,517
Selling, general and administrative	13,350		27,704		31,514
Impairment of goodwill	32,057		—		—
Loss on sale of Eat Smart	336		—		—
Restructuring costs	6,133		13,862		13,231
Total operating costs and expenses	53,794		44,365		48,262
Operating loss	(48,594)		(13,362)		(12,661)
Dividend income	—		1,125		1,125
Interest income	—		—		31
Interest expenses	(2,682)		(4,957)		(4,957)
Other income (expense), net	—		(11,800)		(4,200)
Loss from discontinued operations before taxes	(51,276)		(28,994)		(20,662)
Income tax benefit	121		5,898		4,342
Loss from discontinued operations, net of tax	$	(51,155)	$	(23,096)	$	(16,320)

Cash provided by (used in) operating activities by the Eat Smart business totaled $(16.5) million, $(1.4) million, and $13.8 million for the twelve months ended May 29, 2022, May 30, 2021, and May 31, 2020, respectively. Cash provided by (used in) investing activities from the Eat Smart business totaled $108.0 million, $8.4 million, and $(14.1) million for the twelve months ended May 29, 2022, May 30, 2021, and May 31, 2020, respectively. Depreciation and amortization expense of the Eat Smart business totaled $5.3 million, $9.4 million, and $10.0 million for the twelve months ended May 29, 2022, May 30, 2021, and May 31, 2020, respectively. Capital expenditures of the Eat Smart business totaled $1.8 million, $4.5 million, and $14.5 million for the twelve months ended May 29, 2022, May 30, 2021, and May 31, 2020, respectively.

Interest expense was allocated to discontinued operations based on the interest expense related to the amount of debt required to be paid down under the New Credit Agreements as a result of the Eat Smart Disposition.

The carrying amounts of the major classes of assets and liabilities of the Eat Smart business included in assets and liabilities of discontinued operations are as follows (in thousands):

	May 30, 2021
ASSETS
Cash and cash equivalents	$	136
Accounts receivable, less allowance for credit losses	28,583
Inventories	6,587
Prepaid expenses and other current assets	2,312
Total current assets, discontinued operations	37,618
Investment in non-public company, fair value	45,100
Property and equipment, net	59,273
Operating lease right-of-use assets	3,729
Goodwill	35,470
Trademarks/tradenames, net	8,228
Customer relationships, net	2,260
Other assets	80
Total other assets, discontinued operations	154,140
Total assets, discontinued operations	$	191,758
LIABILITIES
Accounts payable	$	31,271
Accrued compensation	4,550
Other accrued liabilities	4,041
Current portion of lease liabilities	2,289
Deferred revenue	493
Total current liabilities, discontinued operations	42,644
Long-term lease liabilities	3,252
Other non-current liabilities	729
Non-current liabilities, discontinued operations	3,981
Total liabilities, discontinued operations	$	46,625