XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

Leases | 12 Months Ended
--- | ---
May 31, 2020
Leases [Abstract] |
Leases | Leases Operating Leases The Company has entered into various non-cancellable operating lease agreements for manufacturing and distribution facilities, vehicles, equipment and office space. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Landec leases land, facilities, and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2040. Certain of these leases have renewal options. Finance Leases On September 3, 2015, Lifecore leased an 80,950 square foot building in Chaska, MN, two miles from its current facility. The initial term of the lease is seven years with two five-year renewal options. The lease contains a buyout option at any time after year seven with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. Gross assets recorded under finance leases, included in Property and equipment, net, were $3.8 million as of both May 31, 2020 and May 26, 2019. Accumulated amortization associated with finance leases was $0.5 million and $0.4 million as of May 31, 2020 and May 26, 2019, respectively. The monthly lease payment was initially $34,000 and increases by 2.4% per year. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 1, 2016. Lifecore is currently using the building for warehousing and final packaging. The components of lease cost were as follows:
| Year Ended
(In thousands, except term and discount rate) | May 31, 2020
Finance lease cost: |
Amortization of leased assets | $ | 116 |
Interest on lease liabilities | 358 |
Operating lease cost | 6,343 |
Variable lease cost and other | 1,951 |
Total lease cost | $ | 8,768 |
Weighted-average remaining lease term: |
Operating leases | 11.06
Finance leases | 2.60
Weighted-average discount rate: |
Operating leases | 5.24%
Finance leases | 10.00%
The Company’s leases have original lease periods ending between 2021 and 2040. The Company’s maturity analysis of operating and finance lease liabilities as of May 31, 2020 are as follows:
(in thousands) | Operating Leases |  | Finance Leases |  | Total
Fiscal year 2021 | $ | 5,615 |  |  | $ | 455 |  |  | $ | 6,070 |
Fiscal year 2022 | 4,500 |  | 466 |  | 4,966
Fiscal year 2023 | 3,809 |  | 3,497 |  | 7,306
Fiscal year 2024 | 3,137 |  | 9 |  | 3,146
Fiscal year 2025 | 2,501 |  | 2 |  | 2,503
Thereafter | 17,721 |  | — |  | 17,721
Total lease payments | 37,283 |  | 4,429 |  | 41,712
Less: interest | (10,043) |  | (868) |  | (10,911)
Present value of lease liabilities | 27,240 |  | 3,561 |  | 30,801
Less: current obligation of lease liabilities | (4,298) |  | (125) |  | (4,423)
Total long-term lease liabilities | $ | 22,942 |  |  | $ | 3,436 |  |  | $ | 26,378 |
The future minimum annual lease payments required under the Company’s existing operating lease agreements as of May 26, 2019 prior to the adoption of ASC 842 were as follows:
(in thousands) | Operating Leases
Fiscal year 2020 | $ | 5,056 |
Fiscal year 2021 | 4,044 |
Fiscal year 2022 | 3,589 |
Fiscal year 2023 | 3,350 |
Fiscal year 2024 | 3,047 |
Thereafter | 9,335 |
Total | $ | 28,421 |
Rent expense for operating leases, including month to month arrangements was $7.3 million and $6.1 million for the fiscal years 2019 and 2018, respectively, and is recorded in Selling, general, and administrative expenses. The future minimum annual lease payments required under the Company’s existing capital lease agreements as of May 26, 2019, prior to the adoption of ASC 842 were as follows:
(in thousands) | Capital Leases
Fiscal year 2020 | $ | 486 |
Fiscal year 2021 | 489 |
Fiscal year 2022 | 460 |
Fiscal year 2023 | 3,490 |
Fiscal year 2024 | — |
Thereafter | — |
Total minimum lease payment | 4,925 |
Less: amounts representing interest and taxes | (1,291) |
Total | 3,634 |
Less: current portion included in other accrued liabilities | (102) |
Long-term capital lease obligation | $ | 3,532 |
Supplemental cash flow information related to leases are as follows:
| Year Ended
(in thousands) | May 31, 2020
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows from operating leases | $7,853
Operating cash flows from finance leases | 328
Financing cash flows from finance leases | 118
Lease liabilities arising from obtaining right-of-use assets: |
Operating leases | $3,752
Leases | Leases Operating Leases The Company has entered into various non-cancellable operating lease agreements for manufacturing and distribution facilities, vehicles, equipment and office space. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Landec leases land, facilities, and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2040. Certain of these leases have renewal options. Finance Leases On September 3, 2015, Lifecore leased an 80,950 square foot building in Chaska, MN, two miles from its current facility. The initial term of the lease is seven years with two five-year renewal options. The lease contains a buyout option at any time after year seven with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. Gross assets recorded under finance leases, included in Property and equipment, net, were $3.8 million as of both May 31, 2020 and May 26, 2019. Accumulated amortization associated with finance leases was $0.5 million and $0.4 million as of May 31, 2020 and May 26, 2019, respectively. The monthly lease payment was initially $34,000 and increases by 2.4% per year. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 1, 2016. Lifecore is currently using the building for warehousing and final packaging. The components of lease cost were as follows:
| Year Ended
(In thousands, except term and discount rate) | May 31, 2020
Finance lease cost: |
Amortization of leased assets | $ | 116 |
Interest on lease liabilities | 358 |
Operating lease cost | 6,343 |
Variable lease cost and other | 1,951 |
Total lease cost | $ | 8,768 |
Weighted-average remaining lease term: |
Operating leases | 11.06
Finance leases | 2.60
Weighted-average discount rate: |
Operating leases | 5.24%
Finance leases | 10.00%
The Company’s leases have original lease periods ending between 2021 and 2040. The Company’s maturity analysis of operating and finance lease liabilities as of May 31, 2020 are as follows:
(in thousands) | Operating Leases |  | Finance Leases |  | Total
Fiscal year 2021 | $ | 5,615 |  |  | $ | 455 |  |  | $ | 6,070 |
Fiscal year 2022 | 4,500 |  | 466 |  | 4,966
Fiscal year 2023 | 3,809 |  | 3,497 |  | 7,306
Fiscal year 2024 | 3,137 |  | 9 |  | 3,146
Fiscal year 2025 | 2,501 |  | 2 |  | 2,503
Thereafter | 17,721 |  | — |  | 17,721
Total lease payments | 37,283 |  | 4,429 |  | 41,712
Less: interest | (10,043) |  | (868) |  | (10,911)
Present value of lease liabilities | 27,240 |  | 3,561 |  | 30,801
Less: current obligation of lease liabilities | (4,298) |  | (125) |  | (4,423)
Total long-term lease liabilities | $ | 22,942 |  |  | $ | 3,436 |  |  | $ | 26,378 |
The future minimum annual lease payments required under the Company’s existing operating lease agreements as of May 26, 2019 prior to the adoption of ASC 842 were as follows:
(in thousands) | Operating Leases
Fiscal year 2020 | $ | 5,056 |
Fiscal year 2021 | 4,044 |
Fiscal year 2022 | 3,589 |
Fiscal year 2023 | 3,350 |
Fiscal year 2024 | 3,047 |
Thereafter | 9,335 |
Total | $ | 28,421 |
Rent expense for operating leases, including month to month arrangements was $7.3 million and $6.1 million for the fiscal years 2019 and 2018, respectively, and is recorded in Selling, general, and administrative expenses. The future minimum annual lease payments required under the Company’s existing capital lease agreements as of May 26, 2019, prior to the adoption of ASC 842 were as follows:
(in thousands) | Capital Leases
Fiscal year 2020 | $ | 486 |
Fiscal year 2021 | 489 |
Fiscal year 2022 | 460 |
Fiscal year 2023 | 3,490 |
Fiscal year 2024 | — |
Thereafter | — |
Total minimum lease payment | 4,925 |
Less: amounts representing interest and taxes | (1,291) |
Total | 3,634 |
Less: current portion included in other accrued liabilities | (102) |
Long-term capital lease obligation | $ | 3,532 |
Supplemental cash flow information related to leases are as follows:
| Year Ended
(in thousands) | May 31, 2020
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows from operating leases | $7,853
Operating cash flows from finance leases | 328
Financing cash flows from finance leases | 118
Lease liabilities arising from obtaining right-of-use assets: |
Operating leases | $3,752

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration