Note 14 - Business Segment Reporting

3 Months Ended

Aug. 28, 2011

Segment Reporting Disclosure [Text Block]

14. Business Segment Reporting

The Company manages its business operations through four strategic business units. Based upon the information reported to the chief operating decision maker, who is the Chief Executive Officer, the Company has the following reportable segments: the Food Products Technology segment, the Food Export segment, the Hyaluronan-based Biomaterials segment and the Technology Licensing segment.  The Food Products Technology segment markets and packs specialty packaged whole and fresh-cut vegetables that incorporate the BreatheWay specialty packaging for the retail grocery, club store and food services industry.  In addition, the Food Products Technology segment sells BreatheWay packaging to partners for non-vegetable products.  The Food Export segment consists of revenues generated from the purchase and sale of primarily whole commodity fruit and vegetable products to Asia and domestically.  The HA-based Biomaterials segment sells products utilizing hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellular matrix of connective tissues in both animals and humans for medical use primarily in the Ophthalmic, Orthopedic and Veterinary markets.  The Technology Licensing segment licenses Landec’s patented Intellicoat seed coatings to the farming industry and licenses the Company’s Intelimer polymers for personal care products and other industrial products.  Corporate includes corporate general and administrative expenses, non Food Products Technology and non HA-based Biomaterials interest income and Company-wide income tax expenses.  All of the assets of the Company are located within the United States of America.  For the three months ended August 28, 2011, the Company’s international sales were $9.4 million to Taiwan, $7.5 million to Indonesia, $5.0 million to Canada and $8.2 million to all other countries.  For the three months ended August 29, 2010, the Company’s international sales were $8.5 million to Taiwan, $4.6 million to Indonesia, $3.7 million to Canada, $3.0 million to Belgium and $5.7 million to all other countries.

Operations and identifiable assets by business segment consisted of the following (in thousands):

	Food Products Technology		Food Export		HA-based Biomaterials		Technology Licensing		Corporate			TOTAL
Three Months Ended August 28, 2011
Net sales	$	43,363	$	21,355	$	7,121	$	1,462	$	—		$	73,301
International sales	$	5,071	$	21,310	$	3,766	$	—	$	—		$	30,147
Gross profit	$	6,059	$	1,014	$	2,715	$	1,462	$	—		$	11,250
Net income (loss)	$	3,358	$	297	$	462	$	374	$	(2,679	)	$	1,812
Depreciation and amortization	$	780	$	2	$	528	$	45	$	—		$	1,355
Dividend income	$	281	$	—	$	—	$	—				$	281
Interest income	$	8	$	—	$	47	$	—	$	21		$	76
Interest expense	$	—	$	—	$	176	$	—	$	—		$	176
Income tax expense	$	—	$	—	$	—	$	—	$	1,110		$	1,110
Three Months Ended August 29, 2010
Net sales	$	40,558	$	16,483	$	6,385	$	1,527	$	—		$	64,953
International sales	$	4,605	$	16,446	$	4,433	$	—	$	—		$	25,484
Gross profit	$	6,363	$	932	$	2,995	$	1,527	$	—		$	11,817
Net income (loss)	$	3,603	$	377	$	694	$	572	$	(2,942	)	$	2,304
Depreciation and amortization	$	783	$	2	$	484	$	37	$	—		$	1,306
Interest income	$	29	$	—	$	26	$	—	$	52		$	107
Interest expense	$	2	$	—	$	225	$	—	$	—		$	227
Income tax expense	$	—	$	—	$	—	$	—	$	1,352		$	1,352

During the three months ended August 28, 2011 and August 29, 2010, sales to the Company’s top five customers accounted for 43% and 42%, respectively, of revenues with the Company’s top customer from the Food Products Technology segment accounting for 16% and 15% for the three months ended August 28, 2011 and August 29, 2010, respectively.  The Company expects that, for the foreseeable future, a limited number of customers may continue to account for a significant portion of its net revenues.