9 .	Business Segment Reporting

The Company manages its business operations through

three

strategic business units and an Other segment. 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 Packa

ged 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 fruit and vegetables, the majority of which incorporate the BreatheWay spec

ialty packaging for the retail grocery, club store and food services industry. 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 predominantly 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. Other includes licensing and R&D activities from Landec’s Intelimer polymers for agricultural products, personal care products and other industrial products and from the operations of the O Olive business which was acquired on

March 1, 2017.

The Other segment also includes corporate 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 by geography are based on the billing address of the customer and were as follows (in millions):

	Three Months Ended
	August 27, 2017		August 28, 2016
Canada	$	18.1	$	17.8
Taiwan	$	3.8	$	13.7
Belgium	$	2.2	$	5.3
China	$	0.2	$	5.2
Indonesia	$	1.3	$	1.5
Japan	$	1.6	$	2.0
All Other Countries	$	2.0	$	2.7

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

Three Months Ended August 27, 2017	Packaged Fresh Vegetables		Food Export			Biomaterials			Other			Total
Net sales	$	102,568	$	7,576		$	12,164		$	1,049		$	123,357
International sales	$	18,142	$	7,576		$	3,499		$	32		$	29,249
Gross profit	$	15,015	$	484		$	3,522		$	265		$	19,286
Net income (loss)	$	3,783	$	(158	)	$	(155	)	$	(1,324	)	$	2,146
Depreciation and amortization	$	1,972	$	—		$	865		$	117		$	2,954
Dividend income	$	413	$	—		$	—		$	—		$	413
Interest income	$	11	$	—		$	—		$	20		$	31
Interest expense , net	$	—	$	—		$	—		$	404		$	404
Income tax expense (benefit)	$	1,096	$	(45	)	$	(27	)	$	226		$	1,250

Three Months Ended August 28, 2016
Net sales	$	95,945	$	23,339		$	12,332		$	778		$	132,394
International sales	$	17,844	$	23,339		$	7,042		$	—		$	48,225
Gross profit	$	14,406	$	1,028		$	5,122		$	588		$	21,144
Net income (loss)	$	2,323	$	194		$	1,243		$	(448	)	$	3,312
Depreciation and amortization	$	1,820	$	1		$	712		$	17		$	2,550
Dividend income	$	413	$	—		$	—		$	—		$	413
Interest income	$	4	$	—		$	—		$	—		$	4
Interest expense , net	$	550	$	—		$	103		$	—		$	653
Income tax expense	$	655	$	55		$	350		$	829		$	1,889

During

both the

three

months ended

August 27, 2017

and

August 28, 2016,

sales to the Company’s top

five

customers accounted for

47%

of sales. The Company’s top

two

customers, Costco Wholesale Corporation and Wal-Mart Stores, Inc., from the Packaged Fresh Vegetables segment, both accounted for

18%

of revenues for the

three

months ended

August 27, 2017

, and

17%

and

13%

respectively, for the

three

months ended

August 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 revenues