Business Segment Reporting

The Company has three strategic reporting business segments: the Curation Foods segment, the Lifecore segment, and the Other segment.

The Company decided to discontinue its Now Planting business during the fourth quarter of fiscal year 2019. As a result, the operating results for the Now Planting business are presented as a discontinued operation in the Company's accompanying Consolidated Financial Statements and the financial results for fiscal year 2019 comparable periods have been reclassified to present the Now Planting business as a discontinued operation.

The Curation Foods business includes (i) four natural food brands, Eat Smart, O Olive Oil & Vinegar, as well as Yucatan and Cabo Fresh, acquired by the Company through the acquisition of Yucatan Foods during the third quarter of fiscal 2019 (see the Note 2 - Acquisitions for more details on this transaction), and (ii) BreatheWay^® activities. The Curation Foods segment includes activities to market and pack 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 and are sold primarily under the Eat Smart brand and various private labels. The Curation Foods segment also includes sales of BreatheWay packaging to partners for fruit and vegetable products, sales of olive oils and wine vinegars under the O brand, and sales of avocado products under the recently acquired brands Yucatan and Cabo Fresh.

The Lifecore 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.

The Other segment includes corporate general and administrative expenses, non-Curation Foods and non-Lifecore interest income and income tax expenses.

All of the Company's assets are located within the United States of America except for the production facility in Mexico, which was acquired by the Company as a result of the Yucatan Foods acquisition.

The Company’s international sales by geography are based on the billing address of the customer and were as follows:



	Three Months Ended
(In millions)	August 25, 2019		August 26, 2018
Canada	$	20.7	$	19.9
Belgium	—		2.0
Ireland	1.4		1.1
All Other Countries	1.7		0.8

Operations by business segment consisted of the following:



(In thousands)	Curation Foods⁽¹⁾			Lifecore			Other			Total
Three Months Ended August 25, 2019
Net sales	$	126,673		$	12,041		$	—		$	138,714
Gross profit	12,822			2,514			—			15,336
Net loss from continuing operations	(2,171		)	(1,395		)	(1,218		)	(4,784		)
Depreciation and amortization	3,205			1,185			23			4,413
Dividend income	281			—			—			281
Interest income	20			—			5			25
Interest expense, net	1,376			—			699			2,075
Income tax benefit	(586		)	(465		)	(314		)	(1,365		)

Three Months Ended August 26, 2018⁽²⁾
Net sales	$	112,051		$	12,617		$	—		$	124,668
Gross profit	13,370			2,967			—			16,337
Net income (loss) from continuing operations	1,913			(547		)	(1,031		)	335
Depreciation and amortization	2,095			976			74			3,145
Dividend income	413			—			—			413
Interest income	31			—			15			46
Interest expense, net	587			—			171			758
Income tax expense (benefit)	708			(182		)	(417		)	109


⁽¹⁾	During the third quarter of fiscal 2019, the Company started consolidating Yucatan Foods whose results are included in the Company's operating results starting from December 1, 2018. See Note 2 - Acquisition for more details of this transaction.


⁽²⁾	The Curation Foods' segment operating results for the quarter ended August 26, 2018 have been restated to reflect the reclassification of the Now Planting brand to discontinued operations.

During the three months ended August 25, 2019 and August 26, 2018, sales to the Company’s top five customers accounted for 49% and 48% of sales, respectively. The Company’s top two customers, Costco Wholesale Corporation and Wal-Mart Stores, Inc., from the Curation Foods segment, accounted for 14% and 20%, respectively, of revenues for the three months ended August 25, 2019, and 19% and 18%, respectively, for the three months ended August 26, 2018.