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Leases
 12 Months Ended
May 28, 2023
Leases [Abstract]  
Leases Leases
Operating Leases
The Company has entered into various non-cancellable operating lease agreements for manufacturing and distribution facilities, equipment and office space. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. Certain of these leases have renewal options.
Finance Leases
On September 3, 2015, Lifecore leased an 80,950 square foot building in Chaska, MN, two miles from its current facility. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years. The lease contains a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. Gross assets recorded under finance leases, included in property and equipment, net, were $3.9 million and $3.8 million as of May 28, 2023 and May 29, 2022, respectively. Accumulated amortization associated with finance leases was $0.8 million and $0.7 million as of May 28, 2023 and May 29, 2022, respectively. The monthly lease payment was initially $34,000 and increases by 2.4% per year. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 1, 2016. Lifecore is currently using the building for warehousing and final packaging.
The components of lease cost were as follows:
Year EndedYear Ended
(In thousands, except term and discount rate)May 28, 2023May 29, 2022
Finance lease cost:
Amortization of leased assets$119$113
Interest on lease liabilities351335
Operating lease cost1,2861,046
Variable lease cost and other600406
Sublease income(53)(90)
Total lease cost$2,303$1,810
Weighted-average remaining lease term:
Operating leases7.698.54
Finance leases4.570.59
Weighted-average discount rate:
Operating leases4.60 %4.61 %
Finance leases11.40 %10.01 %

The Company’s leases have original lease periods ending between 2023 and 2033. The Company’s maturity analysis of operating and finance lease liabilities as of May 28, 2023 are as follows:
(in thousands)Operating LeasesFinance LeasesTotal
2024$1,467 $492 $1,959 
20251,217 496 1,713 
20261,228 505 1,733 
20271,234 517 1,751 
20281,145 2,874 4,019 
Thereafter2,647 — 2,647 
Total lease payments8,938 4,884 13,822 
Less: interest(1,296)(1,547)(2,843)
Present value of lease liabilities7,642 3,337 10,979 
Less: current obligation of lease liabilities(1,147)(123)(1,270)
Total long-term lease liabilities$6,495 $3,214 $9,709 

Supplemental cash flow information related to leases are as follows:
Year EndedYear Ended
(in thousands)May 28, 2023May 29, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $2,067 $1,578 
Operating cash flows from finance leases 351 335 
Financing cash flows from finance leases 96 129 
Lease liabilities arising from obtaining right-of-use assets:
Operating leases $83 $37 
During May 2021 we entered into a transportation management, warehousing, and transportation services agreement with Castellini Company, LLC to outsource Curation Foods’ fresh packaged salads and vegetables logistics management, including transportation, warehousing and distribution. In connection with this arrangement, during the fiscal year ended May 30, 2021 the Company recorded a $1.7 million impairment of our operating lease right-of-use assets related to certain vehicle leases, which is included in Loss from discontinued operations within the Consolidated Statements of Operations.
As disclosed in Note 13 - Restructuring Costs, impairments of our operating lease right-of-use assets were recorded in Restructuring cost in the accompanying Consolidated Statements of Operations for the years ended May 28, 2023 and May 29, 2022. During the years ended May 28, 2023 and May 29, 2022, the Company recorded impairments related to the Curation Foods Santa Maria office lease of $0.6 million and $1.6 million, respectively, and our Curation Foods Los Angeles, California office lease of $0.1 million and $0.4 million, respectively.
Leases Leases
Operating Leases
The Company has entered into various non-cancellable operating lease agreements for manufacturing and distribution facilities, equipment and office space. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. Certain of these leases have renewal options.
Finance Leases
On September 3, 2015, Lifecore leased an 80,950 square foot building in Chaska, MN, two miles from its current facility. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years. The lease contains a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. Gross assets recorded under finance leases, included in property and equipment, net, were $3.9 million and $3.8 million as of May 28, 2023 and May 29, 2022, respectively. Accumulated amortization associated with finance leases was $0.8 million and $0.7 million as of May 28, 2023 and May 29, 2022, respectively. The monthly lease payment was initially $34,000 and increases by 2.4% per year. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 1, 2016. Lifecore is currently using the building for warehousing and final packaging.
The components of lease cost were as follows:
Year EndedYear Ended
(In thousands, except term and discount rate)May 28, 2023May 29, 2022
Finance lease cost:
Amortization of leased assets$119$113
Interest on lease liabilities351335
Operating lease cost1,2861,046
Variable lease cost and other600406
Sublease income(53)(90)
Total lease cost$2,303$1,810
Weighted-average remaining lease term:
Operating leases7.698.54
Finance leases4.570.59
Weighted-average discount rate:
Operating leases4.60 %4.61 %
Finance leases11.40 %10.01 %

The Company’s leases have original lease periods ending between 2023 and 2033. The Company’s maturity analysis of operating and finance lease liabilities as of May 28, 2023 are as follows:
(in thousands)Operating LeasesFinance LeasesTotal
2024$1,467 $492 $1,959 
20251,217 496 1,713 
20261,228 505 1,733 
20271,234 517 1,751 
20281,145 2,874 4,019 
Thereafter2,647 — 2,647 
Total lease payments8,938 4,884 13,822 
Less: interest(1,296)(1,547)(2,843)
Present value of lease liabilities7,642 3,337 10,979 
Less: current obligation of lease liabilities(1,147)(123)(1,270)
Total long-term lease liabilities$6,495 $3,214 $9,709 

Supplemental cash flow information related to leases are as follows:
Year EndedYear Ended
(in thousands)May 28, 2023May 29, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $2,067 $1,578 
Operating cash flows from finance leases 351 335 
Financing cash flows from finance leases 96 129 
Lease liabilities arising from obtaining right-of-use assets:
Operating leases $83 $37 
During May 2021 we entered into a transportation management, warehousing, and transportation services agreement with Castellini Company, LLC to outsource Curation Foods’ fresh packaged salads and vegetables logistics management, including transportation, warehousing and distribution. In connection with this arrangement, during the fiscal year ended May 30, 2021 the Company recorded a $1.7 million impairment of our operating lease right-of-use assets related to certain vehicle leases, which is included in Loss from discontinued operations within the Consolidated Statements of Operations.
As disclosed in Note 13 - Restructuring Costs, impairments of our operating lease right-of-use assets were recorded in Restructuring cost in the accompanying Consolidated Statements of Operations for the years ended May 28, 2023 and May 29, 2022. During the years ended May 28, 2023 and May 29, 2022, the Company recorded impairments related to the Curation Foods Santa Maria office lease of $0.6 million and $1.6 million, respectively, and our Curation Foods Los Angeles, California office lease of $0.1 million and $0.4 million, respectively.