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v3.19.2

Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Tables) | 12 Months Ended
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May 26, 2019
Accounting Policies [Abstract] |
Comprehensive Income (Loss) | The components of AOCI, net of tax, are as follows (in thousands):
| Unrealized Gains on Cash Flow Hedge
Balance as of May 27, 2018 | $ | 1,148 |
Other comprehensive loss before reclassifications, net of tax effect | (1,084 | )
Amounts reclassified from OCI | — |
Other comprehensive income, net | (1,084 | )
Balance as of May 26, 2019 | $ | 64 |
Summary of Allowance for Sales Returns and Doubtful Accounts | The changes in the Company’s allowance for sales returns and doubtful accounts are summarized in the following table (in thousands):
| Balance at beginning of period |  | Adjustments resulting from acquisitions |  | Adjustments charged to revenue and expenses |  | Write offs, net of recoveries |  | Balance at end of period
Year Ended May 28, 2017 | $ | 296 |  |  | $ | — |  |  | $ | 519 |  |  | $ | (454 | ) |  | $ | 361 |
Year Ended May 27, 2018 | $ | 361 |  |  | $ | — |  |  | $ | 46 |  |  | $ | (105 | ) |  | $ | 302 |
Year Ended May 26, 2019 | $ | 302 |  |  | $ | 881 |  |  | $ | 421 |  |  | $ | (588 | ) |  | $ | 1,016 |
Disaggregation of Revenue | The following tables disaggregate segment revenue by major product lines (in thousands):
| Year Ended
Curation Foods: | May 26, 2019 |  | May 27, 2018 |  | May 28, 2017
Salads | $ | 190,239 |  |  | $ | 188,104 |  |  | $ | 152,467 |
Core vegetables | 258,812 |  |  | 266,850 |  |  | 255,554 |
Emerging brands | 32,635 |  |  | 3,846 |  |  | 2,363 |
Total | $ | 481,686 |  |  | $ | 458,800 |  |  | $ | 410,384 |
| Year Ended
Lifecore: | May 26, 2019 |  | May 27, 2018 |  | May 28, 2017
Aseptic | $ | 34,384 |  |  | $ | 30,021 |  |  | $ | 24,090 |
Fermentation | 21,434 |  |  | 21,068 |  |  | 24,187 |
Development services | 20,055 |  |  | 14,338 |  |  | 11,115 |
Total | $ | 75,873 |  |  | $ | 65,427 |  |  | $ | 59,392 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
| May 26, 2019 |  | May 27, 2018 |  | May 28, 2017
Cash and cash equivalents | $ | 1,080 |  |  | $ | 2,899 |  |  | $ | 5,998 |
Restricted cash | 385 |  |  | 325 |  |  | 325 |
Cash, discontinued operations | — |  |  | (8 | ) |  | (589 | )
Cash and cash equivalents presented on Statements of Cash Flows | $ | 1,465 |  |  | $ | 3,216 |  |  | $ | 5,734 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
| May 26, 2019 |  | May 27, 2018 |  | May 28, 2017
Cash and cash equivalents | $ | 1,080 |  |  | $ | 2,899 |  |  | $ | 5,998 |
Restricted cash | 385 |  |  | 325 |  |  | 325 |
Cash, discontinued operations | — |  |  | (8 | ) |  | (589 | )
Cash and cash equivalents presented on Statements of Cash Flows | $ | 1,465 |  |  | $ | 3,216 |  |  | $ | 5,734 |
Schedule of Inventory, Current | As of May 26, 2019 and May 27, 2018 inventories consisted of (in thousands):
| Year Ended
| May 26, 2019 |  | May 27, 2018
Finished goods | $ | 26,748 |  |  | $ | 12,861 |
Raw materials | 23,195 |  |  | 15,286 |
Work in progress | 4,189 |  |  | 3,672 |
Total inventories | $ | 54,132 |  |  | $ | 31,819 |
Schedule of Diluted Net Income per Share | The following table sets forth the computation of diluted net income per share:
| Year Ended
(in thousands, except per share amounts) | May 26, 2019 |  | May 27, 2018 |  | May 28, 2017
Numerator: |  |  |  |  |
Net income applicable to Common Stockholders | $ | 411 |  |  | $ | 24,829 |  |  | $ | 10,590 |
Denominator: |  |  |  |  |
Weighted average shares for basic net income per share | 28,359 |  |  | 27,535 |  |  | 27,276 |
Effect of dilutive securities: |  |  |  |  |
Stock options and restricted stock units | 248 |  |  | 380 |  |  | 376 |
Weighted average shares for diluted net income per share | 28,607 |  |  | 27,915 |  |  | 27,652 |
Diluted net income per share | $ | 0.01 |  |  | $ | 0.89 |  |  | $ | 0.38 |
Schedule of Effect of Significant Unobservable Inputs for Contingent Liability | In determining the fair value of the Company's contingent consideration liability, the Company utilizes the following significant unobservable inputs in the discounted cash flow models:
| May 26, 2019 |  | May 27, 2018
Cost of debt | 5.1% to 5.5% |  | 4.7% to 5.2%
Market price of risk adjustment | 14% |  | 20%
EBITDA volatility | 28% |  | 25%
Sensitivity Analysis | The discounted cash flow valuation model used by the Company has the following sensitivity to changes in inputs and assumptions (in thousands):
| Impact on value of Contingent consideration liability as of May 26, 2019
10% increase in EBITDA forecast | $ | 100 |
Schedule of Effect of Significant Unobservable Inputs for Investment | In determining the fair value of the investment in Windset, the Company utilizes the following significant unobservable inputs in the discounted cash flow models:
| May 26, 2019 |  | May 27, 2018
Revenue growth rates | 6 | % |  | 6 | %
Expense growth rates | 6 | % |  | 6 | %
Income tax rates | 15 | % |  | 15 | %
Discount rates | 12 | % |  | 12 | %
Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets | The discounted cash flow valuation model used by the Company has the following sensitivity to changes in inputs and assumptions (in thousands):
| Impact on value of Windset investment as of May 26, 2019
10% increase in revenue growth rates | $ | 10,600 |
10% increase in expense growth rates | $ | (9,900 | )
10% increase in income tax rates | $ | (400 | )
10% increase in discount rates | $ | (3,500 | )
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands):
| Fair Value at May 26, 2019 |  | Fair Value at May 27, 2018
Assets: | Level 1 |  | Level 2 |  | Level 3 |  | Level 1 |  | Level 2 |  | Level 3
Interest rate swap contracts | $ | — |  |  | $ | 644 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,529 |  |  | $ | — |
Investment in non-public company | — |  |  | — |  |  | 61,100 |  |  | — |  |  | — |  |  | 66,500 |
Total assets | $ | — |  |  | $ | 644 |  |  | $ | 61,100 |  |  | $ | — |  |  | $ | 1,529 |  |  | $ | 66,500 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest rate swap contracts | $ | — |  |  | $ | 482 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Contingent consideration liability | — |  |  | — |  |  | 500 |  |  | — |  |  | — |  |  | 4,000 |
Total liabilities | $ | — |  |  | $ | 482 |  |  | $ | 500 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,000 |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table reflects the fair value roll forward reconciliation of Level 3 assets and liabilities measured at fair value for the twelve months ended May 26, 2019 (in thousands):
| Windset Investment |  | Contingent Consideration Liability
Balance as of May 27, 2018 | $ | 66,500 |  |  | $ | 4,000 |
Fair value change | 1,600 |  |  | (3,500 | )
Exercise of Senior B put feature (1) | (7,000 | ) |  | — |
Balance as of May 26, 2019 | $ | 61,100 |  |  | $ | 500 |
(1) Refer to Note 3 - Investment in Non-public Company for further details.

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