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 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 fruit and vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club st

ore 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				Nine Months Ended
	February 25, 2018		February 26, 2017		February 25, 2018		February 26, 2017
Canada	$	20.3	$	16.6	$	56.0	$	50.6
Taiwan	$	1.4	$	3.0	$	12.7	$	27.9
Belgium	$	11.5	$	12.9	$	14.3	$	19.8
Ja pan	$	1.6	$	1.3	$	4.8	$	11.8
Indonesia	$	0.2	$	1.5	$	4.0	$	6.6
Philippines	$	0.5	$	0.6	$	1.5	$	6.2
China	$	0.3	$	0.4	$	1.6	$	1.9
Al l Other Countries	$	2.1	$	2.8	$	6.7	$	8.5

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

Three Months Ended February 25, 2018	Packaged Fresh Vegetables			Food Export			Biomaterials		Other			Total
Net sales	$	120,942		$	4,414		$	22,959	$	1,008		$	149,323
International sales	$	20,285		$	4,414		$	13,156	$	51		$	37,906
Gross profit	$	7,944		$	318		$	11,609	$	257		$	20,128
Net (loss) income	$	(2,545	)	$	(216	)	$	6,175	$	12,674		$	16,088
Depreciation and amortization	$	2,120		$	—		$	940	$	82		$	3,142
Dividend income	$	413		$	—		$	—	$	—		$	413
Interest income	$	32		$	—		$	—	$	55		$	87
Interest expense , net	$	—		$	—		$	—	$	531		$	531
Income tax (benefit) expense	$	(630	)	$	(61	)	$	1,763	$	(13,981	)	$	(12,909	)

Three Months Ended February 26, 2017
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 (loss) income	$	(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 (benefit) expense, net	$	(77	)	$	—		$	—	$	477		$	400
Income tax (benefit) expense	$	(594	)	$	(33	)	$	2,031	$	152		$	1,556

Nine Months Ended February 25, 2018
Net sales	$	330,662		$	25,982		$	49,236	$	3,257		$	409,137
International sales	$	56,135		$	25,982		$	19,330	$	124		$	101,571
Gross profit	$	32,404		$	1,628		$	20,348	$	786		$	55,166
Net income (loss)	$	968		$	(264	)	$	7,280	$	10,737		$	18,721
Depreciation and amortization	$	6,050		$	—		$	2,715	$	311		$	9,076
Dividend income	$	1,238		$	—		$	—	$	1,238		$	1,238
Interest income	$	61		$	—		$	—	$	100		$	161
Interest expense , net	$	—		$	—		$	—	$	1,415		$	1,415
Income tax expense (benefit)	$	372		$	(75	)	$	2,110	$	(13,858	)	$	(11,451	)

Nine Months 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 (loss) income	$	(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 (benefit) expense	$	(81	)	$	229		$	2,769	$	1,221		$	4,138

During

the

nine

months ended

February 25, 2018

and

February 26, 2017,

sales to the Company’s top

five

customers accounted for

46%

and

43%,

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

18%

and

17%

of revenues, respectively, for the

nine

months ended

February 25, 2018

, and

17%

and

14%

respectively, for the

nine

months ended

February 26, 2017.

The Company expects that, for the foreseeable future, a limited number of customers

may

continue to account for a significant portion of its revenues