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Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Tables)

12 Months Ended

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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