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Note 2 - Acquisition of O
 6 Months Ended
Nov. 25, 2018
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
2.
Acquisition of
O
 
On
March 1, 2017,
the Company purchased substantially all of the assets of
O
for
$2.5
million in cash plus contingent consideration of up to
$7.5
million over fiscal years
2018
through
2020
based upon
O
achieving certain EBITDA targets. All accounting for this acquisition is final.
 
The potential earn out payment of up to
$7.5
million is based on
O
’s cumulative EBITDA over the Company’s fiscal years
2018
through
2020.
At the end of each fiscal year, beginning in fiscal year
2018,
the former owners of
O
will earn the equivalent of the EBITDA achieved by
O
for that fiscal year in an amount
not
to exceed
$4.6
million over the
three
year period. The former owners can also earn an additional
$2.9
million on a dollar for dollar basis for exceeding
$6.0
million of cumulative EBITDA over the
three
year period. Each quarter the Company performs, with the assistance of a
third
party appraiser, an analysis of
O
’s projected EBITDA over the earnout period. Based on this analysis, the Company records a contingent consideration liability, included in Other non-current liabilities. As of
November 25, 2018
and
May 27, 2018,
the contingent consideration liability was
$3.1
million and
$4.0
million, respectively, representing the present value of the expected earn out payments. The
$900,000
reduction in the contingent consideration liability was recorded as a reduction to SG&A during the
three
and
six
months ended
November 25, 2018
in the accompanying Consolidated Statements of Comprehensive Income.