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Leases | 12 Months Ended
--- | ---
May 30, 2021
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 30, 2021 and May 31, 2020. Accumulated amortization associated with finance leases was $0.6 million and $0.5 million as of May 30, 2021 and May 31, 2020, 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 | Year Ended
(In thousands, except term and discount rate) | May 30, 2021 | May 31, 2020
Finance lease cost: |  |
Amortization of leased assets | $ | 117 | $ | 116
Interest on lease liabilities | 348 | 358
Operating lease cost | 5,788 | 6,343
Variable lease cost and other | 792 | 1,951
Sublease income | (90) | —
Total lease cost | $ | 6,955 | $ | 8,768
Weighted-average remaining lease term: |  |
Operating leases | 11.67 | 11.06
Finance leases | 1.60 | 2.60
Weighted-average discount rate: |  |
Operating leases | 4.99 | % | 5.24 | %
Finance leases | 10.00% | 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 30, 2021 are as follows:
(in thousands) | Operating Leases |  | Finance Leases |  | Total
Fiscal year 2022 | $ | 4,850 |  |  | $ | 466 |  |  | $ | 5,316 |
Fiscal year 2023 | 4,052 |  |  | 3,497 |  |  | 7,549 |
Fiscal year 2024 | 3,263 |  |  | 9 |  |  | 3,272 |
Fiscal year 2025 | 2,502 |  |  | 2 |  |  | 2,504 |
Fiscal year 2026 | 2,015 |  |  | — |  |  | 2,015 |
Thereafter | 16,076 |  |  | — |  |  | 16,076 |
Total lease payments | 32,758 |  |  | 3,974 |  |  | 36,732 |
Less: interest | (8,685) |  |  | (547) |  |  | (9,232) |
Present value of lease liabilities | 24,073 |  |  | 3,427 |  |  | 27,500 |
Less: current obligation of lease liabilities | (3,768) |  |  | (121) |  |  | (3,889) |
Total long-term lease liabilities | $ | 20,305 |  |  | $ | 3,306 |  |  | $ | 23,611 |
Supplemental cash flow information related to leases are as follows:
| Year Ended | Year Ended
(in thousands) | May 30, 2021 | May 21, 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases | $ | 6,322 |  | $ | 7,853 |
Operating cash flows from finance leases | 348 |  | 328 |
Financing cash flows from finance leases | 110 |  | 118 |
Lease liabilities arising from obtaining right-of-use assets: |  |
Operating leases | $ | 4,294 |  | $ | 3,752 |
During May 2021 we entered into a transportation management, warehousing, and transportation services agreement with Castellini Company, LLC to outsource Curation Foods’ fresh packaged salads and vegetables logistics management, including transportation, warehousing and distribution. In connection with this arrangement, during the fiscal year ended May 30, 2021 we recorded a $1.7 million impairment of our operating lease right-of-use assets related to certain vehicle leases, which is included in restructuring costs within the Consolidated Statements of Operations.
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 30, 2021 and May 31, 2020. Accumulated amortization associated with finance leases was $0.6 million and $0.5 million as of May 30, 2021 and May 31, 2020, 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 | Year Ended
(In thousands, except term and discount rate) | May 30, 2021 | May 31, 2020
Finance lease cost: |  |
Amortization of leased assets | $ | 117 | $ | 116
Interest on lease liabilities | 348 | 358
Operating lease cost | 5,788 | 6,343
Variable lease cost and other | 792 | 1,951
Sublease income | (90) | —
Total lease cost | $ | 6,955 | $ | 8,768
Weighted-average remaining lease term: |  |
Operating leases | 11.67 | 11.06
Finance leases | 1.60 | 2.60
Weighted-average discount rate: |  |
Operating leases | 4.99 | % | 5.24 | %
Finance leases | 10.00% | 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 30, 2021 are as follows:
(in thousands) | Operating Leases |  | Finance Leases |  | Total
Fiscal year 2022 | $ | 4,850 |  |  | $ | 466 |  |  | $ | 5,316 |
Fiscal year 2023 | 4,052 |  |  | 3,497 |  |  | 7,549 |
Fiscal year 2024 | 3,263 |  |  | 9 |  |  | 3,272 |
Fiscal year 2025 | 2,502 |  |  | 2 |  |  | 2,504 |
Fiscal year 2026 | 2,015 |  |  | — |  |  | 2,015 |
Thereafter | 16,076 |  |  | — |  |  | 16,076 |
Total lease payments | 32,758 |  |  | 3,974 |  |  | 36,732 |
Less: interest | (8,685) |  |  | (547) |  |  | (9,232) |
Present value of lease liabilities | 24,073 |  |  | 3,427 |  |  | 27,500 |
Less: current obligation of lease liabilities | (3,768) |  |  | (121) |  |  | (3,889) |
Total long-term lease liabilities | $ | 20,305 |  |  | $ | 3,306 |  |  | $ | 23,611 |
Supplemental cash flow information related to leases are as follows:
| Year Ended | Year Ended
(in thousands) | May 30, 2021 | May 21, 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases | $ | 6,322 |  | $ | 7,853 |
Operating cash flows from finance leases | 348 |  | 328 |
Financing cash flows from finance leases | 110 |  | 118 |
Lease liabilities arising from obtaining right-of-use assets: |  |
Operating leases | $ | 4,294 |  | $ | 3,752 |
During May 2021 we entered into a transportation management, warehousing, and transportation services agreement with Castellini Company, LLC to outsource Curation Foods’ fresh packaged salads and vegetables logistics management, including transportation, warehousing and distribution. In connection with this arrangement, during the fiscal year ended May 30, 2021 we recorded a $1.7 million impairment of our operating lease right-of-use assets related to certain vehicle leases, which is included in restructuring costs within the Consolidated Statements of Operations.

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- 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
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- 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
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