11.

Business Segment Reporting

Prior to

May 2018,

the Company managed 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: Packaged Fresh Vegetables, Food Export and Biomaterials. However, in

May 2018,

the Company discontinued its Food Export business segment. As a result, the Company met the requirements of ASC

205

and ASC

360

to report the results of the Food Export business segment as discontinued operations. The operating results for the Food Export business segment, in all periods presented, have been reclassified to discontinued operations and are

longer reported as a separate 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 specialty 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 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

business from its acquisition date of

March 1, 2017

through

May 27, 2018.

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):

	Year Ended
	May 27, 2018		May 28, 2017		May 29, 2016
Canada	$	78.0	$	69.3	$	80.6
Belgium	$	17.2	$	21.0	$	13.4
Ireland	$	4.1	$	4.0	$	3.2
United Kingdom	$	0.8	$	0.4	$	0.6
Switzerland	$	0.8	$	0.3	$	0.4
Mexico	$	0.6	$	0.5	$	0.8
All Other Countries	$	1.4	$	3.4	$	4.2

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

Year Ended May 27, 2018	Packaged Fresh Vegetables			Biomaterials		Other (1)			Total
Net sales	$	454,953		$	65,427	$	3,847		$	524,227
International sales	$	78,217		$	24,468	$	167		$	102,852
Gross profit	$	49,130		$	28,568	$	640		$	78,338
Net income (loss) from continuing operations	$	17,970		$	11,631	$	(3,840	)	$	25,761
Identifiable assets (2)	$	251,500		$	129,342	$	23,861		$	404,703
Depreciation and amortization	$	8,056		$	3,679	$	677		$	12,412
Capital expenditures	$	11,171		$	16,454	$	5,965		$	33,590
Dividend income	$	1,650		$	—	$	—		$	1,650
Interest income	$	93		$	—	$	118		$	211
Interest expense, net	$	1,554		$	—	$	396		$	1,950
Income tax (benefit) expense	$	(9,537	)	$	2,638	$	(2,464	)	$	(9,363	)

Year Ended May 28, 2017
Net sales	$	408,021		$	59,392	$	2,363		$	469,776
International sales	$	69,802		$	29,053	$	—		$	98,855
Gross profit	$	51,148		$	26,755	$	1,309		$	79,212
Net income (loss) from continuing operations	$	2,641		$	10,228	$	(2,734	)	$	10,135
Identifiable assets (2)	$	211,381		$	104,492	$	42,735		$	358,608
Depreciation and amortization	$	7,312		$	3,054	$	311		$	10,677
Capital expenditures	$	11,294		$	11,169	$	540		$	23,003
Dividend income	$	1,650		$	—	$	—		$	1,650
Interest income	$	16		$	—	$	—		$	16
Interest expense, net	$	674		$	13	$	1,139		$	1,826
Income tax expense	$	823		$	2,938	$	279		$	4,040

Year Ended May 29, 2016
Net sales	$	423,859		$	50,470	$	2,589		$	476,918
International sales	$	81,242		$	21,993	$	—		$	103,235
Gross profit	$	40,479		$	24,081	$	2,221		$	66,781
Net (loss) income from continuing operations	$	(32,168	)	$	9,499	$	10,679		$	(11,990	)
Identifiable assets (2)	$	212,524		$	98,986	$	31,143		$	342,653
Depreciation and amortization	$	6,648		$	2,606	$	141		$	9,395
Capital expenditures	$	27,533		$	12,162	$	—		$	39,695
Dividend income	$	1,650		$	—	$	—		$	1,650
Interest income	$	46		$	25	$	—		$	71
Interest expense, net	$	1,721		$	266	$	—		$	1,987
Income tax expense (benefit)	$	415		$	1,946	$	(10,065	)	$	(7,704	)

(

) The Other segment operating results for the year ended

May 27, 2018,

May 28, 2017

and

May 29, 2016

have been restated to reflect the reclassification of the Food Export segment to discontinued operations.

(

) Assets of discontinued operations are included in Other for the years ended

May 27, 2018,

May 28, 2017,

and

May 29, 2016.