XML 31 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Note 11 - Business Segment Reporting
 9 Months Ended
Feb. 26, 2017
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
1
1
.
Business Segment Reporting
 
The Company
manages its business operations through
three
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 Packaged Fresh Vegetables segment, the Food Export segment
, and the Biomaterials segment.
 
 
The Packaged Fresh Vegetables segment markets and packs specialty packaged whole and fresh-cut vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club store
, and food services industries. In addition, the Packaged Fresh Vegetables segment sells BreatheWay packaging to partners for fruit and vegetable products. The Food Export segment consists of revenues generated from the purchase and sale of primarily whole commodity fruit and vegetable products primarily to Asia. The 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, and non-HA products for medical use primarily in the Ophthalmic, Orthopedic
, and other markets. Corporate licenses Landec’s Intelimer polymers for agricultural products, personal care products
, and other industrial products. The Corporate segment also includes general and administrative expenses, non-Packaged Fresh Vegetables and non-Biomaterials interest income and income tax expenses. All of the assets of the Company are located within the United States of America. The Company’s international sales were as follows (in millions):
 
   
Three Months Ended
    
Nine
Months Ended
  
   
February 26,
2017
    
February 28,
2016
    
February 26,
2017
    
February 28,
2016
  
Canada
   $
16.6
     $
20.3
     $
50.6
     $
60.6
  
Taiwan
   $
3.0
     $
1.2
     $
27.9
     $
26.6
  
Belgium
   $
12.9
     $
6.2
     $
19.8
     $
7.3
  
China
   $
0.4
     $
0.3
     $
11.8
     $
7.6
  
Indonesia
   $
1.5
     $
2.4
     $
6.6
     $
6.3
  
Japan
   $
1.3
     $
1.0
     $
6.2
     $
4.6
  
Philippines
   $
0.6
     $
0.5
     $
1.9
     $
2.1
  
All Other Countries
   $
2.8
     $
3.4
     $
8.5
     $
10.5
  
 
 
Operations by business segment consisted of the following
(in thousands):
 
Three Months Ended
February 26, 2017
  
Packaged Fresh
Vegetables
    
Food
Export
    
Biomaterials
    
Corporate
    
Total
  
Net sales
   $
105,447
     $
7,276
     $
23,532
     $
313
     $
136,568
  
International sales
   $
16,802
     $
7,276
     $
15,024
     $
—
     $
39,102
  
Gross profit
   $
10,114
     $
558
     $
12,581
     $
179
     $
23,432
  
Net income (loss)
   $
(2,492
)
   $
(116
)
   $
7,135
     $
(1,027
)
   $
3,500
  
Depreciation and amortization
   $
1,862
     $
—
     $
794
     $
61
     $
2,717
  
Dividend income
   $
413
     $
—
     $
—
     $
—
     $
413
  
Interest income
   $
8
     $
—
     $
—
     $
—
     $
8
  
Interest expense, net
   $
(77
 )   $
—
     $
—
     $
477
     $
400
  
Income tax expense
(benefit)
   $
(594
)
   $
(33
)
   $
2,031
     $
152
     $
1,556
  
                                         
Three Mont
hs Ended February 28, 2016
                                        
Net sales
   $
107,348
     $
6,389
     $
15,701
     $
552
     $
129,990
  
International sales
   $
20,343
     $
6,389
     $
8,576
     $
—
     $
35,308
  
Gross profit
   $
4,334
     $
521
     $
7,618
     $
458
     $
12,931
  
Net income (loss)
   $
(36,963
)
   $
(27
)
   $
3,450
     $
12,350
     $
(21,190
)
Depreciation and amortization
   $
1,455
     $
—
     $
656
     $
36
     $
2,147
  
Dividend income
   $
413
     $
—
     $
—
     $
—
     $
413
  
Interest income
   $
17
     $
—
     $
—
     $
—
     $
17
  
Interest expense, net
   $
427
 
   $
—
     $
57
 
   $
—
     $
484
 
Income tax expense (benefit)
   $
(905
 )   $
(189
 )   $
973
 
   $
(12,389
 )   $
(12,510
 )
                                         
Nine Month
s Ended February 26, 2017
                                        
Net sales
   $
299,370
     $
56,316
     $
47,795
     $
1,346
     $
404,827
  
International sales
   $
51,073
     $
56,316
     $
25,896
     $
—
     $
133,285
  
Gross profit
   $
36,522
     $
3,436
     $
22,640
     $
931
     $
63,529
  
Net income (loss)
   $
(419
)
   $
812
     $
9,690
     $
(1,945
)
   $
8,138
  
Depreciation and amortization
   $
5,474
     $
3
     $
2,225
     $
125
     $
7,827
  
Dividend income
   $
1,238
     $
—
     $
—
     $
—
     $
1,238
  
Interest income
   $
15
     $
—
     $
—
     $
—
     $
15
  
Interest expense, net
   $
594
     $
—
     $
13
     $
825
     $
1,432
  
Income tax expense
(benefit)
  $
(81
)
   $
229
     $
2,769
     $
1,221
     $
4,138
  
                                         
Nine Months Ended February 28, 2016
                                        
Net sales
   $
318,218
     $
50,873
     $
34,748
     $
1,947
     $
405,786
  
International sales
   $
60,948
     $
50,873
     $
13,735
     $
—
     $
125,556
  
Gross profit
   $
27,565
     $
3,200
     $
15,713
     $
1,695
     $
48,173
  
Net income (loss)
   $
(34,361
)
   $
1,250
     $
4,911
     $
11,830
     $
(16,370
)
Depreciation and amortization
   $
4,470
     $
1
     $
1,902
     $
113
     $
6,486
  
Dividend income
   $
1,238
     $
—
     $
—
     $
—
     $
1,238
  
Interest income
   $
39
     $
—
     $
25
     $
—
     $
64
  
Interest expense, net
   $
1,304
 
   $
—
     $
121
 
   $
—
     $
1,425
 
Income tax expense
(benefit)
   $
—
     $
—
     $
1,385
 
   $
(11,135
 )   $
(9,750
 )
 
During
the
nine
months ended
February
26,
2017
and
February
28,
2016,
sales to the Company’s top
five
customers accounted for
43%
and
45%,
respectively, of sales. The Company’s top
two
customers, Costco Wholesale Corporation and Wal-Mart Stores, Inc., from the Packaged Fresh Vegetables segment accounted for
17%
and
14%
of revenues, respectively, for the
nine
months ended
February
26,
2017
, and
20%
and
12%
respectively, for the
nine
months ended
February
28,
2016.
The Company expects that, for the foreseeable future, a limited number of customers
may
continue to account for a significant portion of its net sales
.