Business Segment Reporting

The Company has three strategic reporting business segments: the Curation Foods segment, the Lifecore segment, and the Other segment.

The Company decided to discontinue its Now Planting business during the fourth quarter of fiscal year 2019. As a result, the operating results for the Now Planting business are presented as a discontinued operation in the Company's accompanying Consolidated Financial Statements and the financial results for fiscal year 2019 comparable periods have been reclassified to present the Now Planting business as a discontinued operation.

The Curation Foods business includes (i) four natural food brands, Eat Smart, O Olive Oil & Vinegar, as well as Yucatan and Cabo Fresh, acquired by the Company through the acquisition of Yucatan Foods during the third quarter of fiscal 2019 (see the Note 2 - Acquisitions for more details on this transaction), and (ii) BreatheWay^® activities. The Curation Foods segment includes activities to market and pack specialty packaged whole and fresh-cut fruit and vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club store and food services industry and are sold primarily under the Eat Smart brand and various private labels. The Curation Foods segment also includes sales of BreatheWay packaging to partners for fruit and vegetable products, sales of olive oils and wine vinegars under the O brand, and sales of avocado products under the recently acquired brands Yucatan and Cabo Fresh.

The Lifecore 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, and non-HA products for medical use primarily in the Ophthalmic, Orthopedic and other markets.

The Other segment includes corporate general and administrative expenses, non-Curation Foods and non-Lifecore interest expense, interest income and income tax expenses.

All of the Company's assets are located within the United States of America except for the production facility in Mexico, which was acquired by the Company as a result of the Yucatan Foods acquisition.

The Company’s international sales by geography are based on the billing address of the customer and were as follows:



	Three Months Ended				Six Months Ended
(In millions)	November 24, 2019		November 25, 2018		November 24, 2019		November 25, 2018
Canada	$	18.4	$	20.3	$	39.1	$	40.2
Belgium	3.1		0.5		3.1		2.5
Ireland	1.1		1.2		2.5		2.3
All Other Countries	2.0		1.2		3.4		2.0

Operations by business segment consisted of the following:



(In thousands)	Curation Foods⁽¹⁾			Lifecore		Other			Total
Three Months Ended November 24, 2019
Net sales	$	119,751		$	22,842	$	—		$	142,593
Gross profit	6,890			8,624		—			15,514
Net (loss) income from continuing operations	(8,348		)	3,459		(1,851		)	(6,740		)
Depreciation and amortization	3,143			1,248		23			4,414
Dividend income	281			—		—			281
Interest income	11			—		14			25
Interest expense	1,375			—		794			2,169
Income tax (benefit) expense	(1,723		)	919		(361		)	(1,165		)

Six Months Ended November 24, 2019
Net sales	$	246,424		$	34,883	$	—		$	281,307
Gross profit	19,712			11,138		—			30,850
Net (loss) income from continuing operations	(10,519		)	2,064		(3,069		)	(11,524		)
Depreciation and amortization	6,348			2,433		46			8,827
Dividend income	562			—		—			562
Interest income	31			—		19			50
Interest expense	2,751			—		1,493			4,244
Income tax (benefit) expense	(2,309		)	454		(675		)	(2,530		)

Three Months Ended November 25, 2018⁽²⁾
Net sales	$	109,111		$	15,446	$	—		$	124,557
Gross profit	11,207			5,678		—			16,885
Net income (loss) from continuing operations	53			1,298		(1,464		)	(113		)
Depreciation and amortization	2,194			978		141			3,313
Dividend income	412			—		—			412
Interest income	30			—		3			33
Interest expense	276			—		470			746
Income tax expense (benefit)	95			432		(105		)	422

Six Months Ended November 25, 2018⁽²⁾
Net sales	$	221,162		$	28,063	$	—		$	249,225
Gross profit	24,577			8,645		—			33,222
Net income (loss) from continuing operations	1,965			751		(2,495		)	221
Depreciation and amortization	4,234			1,954		270			6,458
Dividend income	825			—		—			825
Interest income	61			—		18			79
Interest expense	863			—		641			1,504
Income tax expense (benefit)	802			250		(520		)	532


⁽¹⁾	During the third quarter of fiscal 2019, the Company started consolidating Yucatan Foods whose results are included in the Company's operating results starting from December 1, 2018. See Note 2 - Acquisition for more details of this transaction.


⁽²⁾	The Curation Foods' segment operating results for the three and six months ended November 25, 2018 have been restated to reflect the reclassification of the Now Planting brand to discontinued operations.

During the six months ended November 24, 2019 and November 25, 2018, sales to the Company’s top five customers accounted for 44% and 45% of sales, respectively. The Company’s top two customers, Costco Wholesale Corporation and Wal-Mart Stores, Inc., from the Curation Foods segment, accounted for 13% and 18%, respectively, of revenues for the six months ended November 24, 2019, and 17% and 16%, respectively, for the six months ended November 25, 2018.