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v3.22.2.2

Leases | 12 Months Ended
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May 29, 2022
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 facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. 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 29, 2022 and May 30, 2021. Accumulated amortization associated with finance leases was $0.7 million and $0.6 million as of May 29, 2022 and May 30, 2021, 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 29, 2022 | May 30, 2021
Finance lease cost: |  |
Amortization of leased assets | $ | 113 | $ | 117
Interest on lease liabilities | 335 | 348
Operating lease cost | 2,212 | 2,291
Variable lease cost and other | 134 | 15
Sublease income | (90) | (90)
Total lease cost | $ | 2,704 | $ | 2,681
Weighted-average remaining lease term: |  |
Operating leases | 7.41 | 14.35
Finance leases | 0.59 | 1.60
Weighted-average discount rate: |  |
Operating leases | 4.78 | % | 5.00 | %
Finance leases | 10.00 | % | 10.00 | %
The Company’s leases have original lease periods ending between 2022 and 2033. The Company’s maturity analysis of operating and finance lease liabilities as of May 29, 2022 are as follows:
(in thousands) | Operating Leases |  | Finance Leases |  | Total
2023 | $ | 2,330 |  |  | $ | 3,475 |  |  | $ | 5,805 |
2024 | 2,243 |  |  | 10 |  |  | 2,253 |
2025 | 2,002 |  |  | — |  |  | 2,002 |
2026 | 1,928 |  |  | — |  |  | 1,928 |
2027 | 1,409 |  |  | — |  |  | 1,409 |
Thereafter | 3,793 |  |  | — |  |  | 3,793 |
Total lease payments | 13,705 |  |  | 3,485 |  |  | 17,190 |
Less: interest | (1,991) |  |  | (190) |  |  | (2,181) |
Present value of lease liabilities | 11,714 |  |  | 3,295 |  |  | 15,009 |
Less: current obligation of lease liabilities | (1,743) |  |  | (3,283) |  |  | (5,026) |
Total long-term lease liabilities | $ | 9,971 |  |  | $ | 12 |  |  | $ | 9,983 |
Supplemental cash flow information related to leases are as follows:
| Year Ended | Year Ended
(in thousands) | May 29, 2022 | May 30, 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases | $ | 2,454 |  | $ | 2,089 |
Operating cash flows from finance leases | 335 |  | 348 |
Financing cash flows from finance leases | 129 |  | 110 |
Lease liabilities arising from obtaining right-of-use assets: |  |
Operating leases | $ | 37 |  | $ | 3,137 |
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 the Company recorded a $1.7 million impairment of our operating lease right-of-use assets related to certain vehicle leases, which is included in Loss from discontinued operations within the Consolidated Statements of Operations. As disclosed in Note 13 - Restructuring Costs, impairments of our operating lease right-of-use assets related to the Curation Foods Santa Maria office lease of $1.6 million and our Curation Foods Los Angeles, California office lease of $0.4 million were recorded in Restructuring cost in the accompanying Consolidated Statements of Operations for the year ended May 29, 2022.
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 facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2033. 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 29, 2022 and May 30, 2021. Accumulated amortization associated with finance leases was $0.7 million and $0.6 million as of May 29, 2022 and May 30, 2021, 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 29, 2022 | May 30, 2021
Finance lease cost: |  |
Amortization of leased assets | $ | 113 | $ | 117
Interest on lease liabilities | 335 | 348
Operating lease cost | 2,212 | 2,291
Variable lease cost and other | 134 | 15
Sublease income | (90) | (90)
Total lease cost | $ | 2,704 | $ | 2,681
Weighted-average remaining lease term: |  |
Operating leases | 7.41 | 14.35
Finance leases | 0.59 | 1.60
Weighted-average discount rate: |  |
Operating leases | 4.78 | % | 5.00 | %
Finance leases | 10.00 | % | 10.00 | %
The Company’s leases have original lease periods ending between 2022 and 2033. The Company’s maturity analysis of operating and finance lease liabilities as of May 29, 2022 are as follows:
(in thousands) | Operating Leases |  | Finance Leases |  | Total
2023 | $ | 2,330 |  |  | $ | 3,475 |  |  | $ | 5,805 |
2024 | 2,243 |  |  | 10 |  |  | 2,253 |
2025 | 2,002 |  |  | — |  |  | 2,002 |
2026 | 1,928 |  |  | — |  |  | 1,928 |
2027 | 1,409 |  |  | — |  |  | 1,409 |
Thereafter | 3,793 |  |  | — |  |  | 3,793 |
Total lease payments | 13,705 |  |  | 3,485 |  |  | 17,190 |
Less: interest | (1,991) |  |  | (190) |  |  | (2,181) |
Present value of lease liabilities | 11,714 |  |  | 3,295 |  |  | 15,009 |
Less: current obligation of lease liabilities | (1,743) |  |  | (3,283) |  |  | (5,026) |
Total long-term lease liabilities | $ | 9,971 |  |  | $ | 12 |  |  | $ | 9,983 |
Supplemental cash flow information related to leases are as follows:
| Year Ended | Year Ended
(in thousands) | May 29, 2022 | May 30, 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases | $ | 2,454 |  | $ | 2,089 |
Operating cash flows from finance leases | 335 |  | 348 |
Financing cash flows from finance leases | 129 |  | 110 |
Lease liabilities arising from obtaining right-of-use assets: |  |
Operating leases | $ | 37 |  | $ | 3,137 |
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 the Company recorded a $1.7 million impairment of our operating lease right-of-use assets related to certain vehicle leases, which is included in Loss from discontinued operations within the Consolidated Statements of Operations. As disclosed in Note 13 - Restructuring Costs, impairments of our operating lease right-of-use assets related to the Curation Foods Santa Maria office lease of $1.6 million and our Curation Foods Los Angeles, California office lease of $0.4 million were recorded in Restructuring cost in the accompanying Consolidated Statements of Operations for the year ended May 29, 2022.

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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 https://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 https://asc.fasb.org/subtopic&trid=77888251 + Details
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