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Discontinued Operations | 9 Months Ended
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Feb. 27, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued OperationsAs discussed in Note 1 – Organization, Basis of Presentation, and Summary of Significant Accounting Policies – Eat Smart Sale and Discontinued Operations, on December 13, 2021, we completed the Eat Smart Disposition. Eat Smart represented a component of the business within the Curation Foods segment and its sale represents a strategic shift in the Company going forward. Accordingly, concurrent with the execution of the Asset Purchase Agreement, Eat Smart meets the accounting requirements for reporting as discontinued operations for all periods presented. The key components of income from discontinued operations for the three and nine months ended February 27, 2022 and February 28, 2021 were as follows (in thousands):
| Three Months Ended |  | Nine Months Ended
| February 27, 2022 |  | February 28, 2021 |  | February 27, 2022 |  | February 28, 2021
Product sales | $ | 13,559 |  |  | $ | 93,092 |  |  | $ | 186,755 |  |  | $ | 277,699 |
Cost of product sales | 13,720 |  |  | 87,844 |  |  | 181,555 |  |  | 256,918 |
Gross profit | (161) |  |  | 5,248 |  |  | 5,200 |  |  | 20,781 |
Operating costs and expenses: |  |  |  |  |  |  |
Research and development | 103 |  |  | 719 |  |  | 1,918 |  |  | 2,120 |
Selling, general and administrative | 1,058 |  |  | 7,086 |  |  | 13,350 |  |  | 21,258 |
Impairment of goodwill | — |  |  | — |  |  | 32,057 |  |  | — |
Loss on sale of Eat Smart | 4,354 |  |  | — |  |  | 4,354 |  |  | — |
Restructuring costs | 86 |  |  | 677 |  |  | 1,519 |  |  | 9,940 |
Total operating costs and expenses | 5,601 |  |  | 8,482 |  |  | 53,198 |  |  | 33,318 |
Operating loss | (5,762) |  |  | (3,234) |  |  | (47,998) |  |  | (12,537) |
Dividend income | — |  |  | 281 |  |  | — |  |  | 844 |
Interest expense | (204) |  |  | (1,239) |  |  | (2,682) |  |  | (3,717) |
Other income (expense), net | — |  |  | — |  |  | — |  |  | (11,800) |
Loss from discontinued operations before taxes | (5,966) |  |  | (4,192) |  |  | (50,680) |  |  | (27,210) |
Income tax benefit | 222 |  |  | 159 |  |  | 422 |  |  | 6,200 |
Loss from discontinued operations, net of tax | $ | (5,744) |  |  | $ | (4,033) |  |  | $ | (50,258) |  |  | $ | (21,010) |
Cash used in operating activities by the Eat Smart business totaled $5.5 million and $1.8 million for the nine months ended February 27, 2022 and February 28, 2021, respectively. Cash provided by investing activities from the Eat Smart business totaled $117.8 million and $9.3 million for the nine months ended February 27, 2022 and February 28, 2021, respectively. Depreciation and amortization expense of the Eat Smart business totaled $0.3 million and $2.2 million for the three months ended February 27, 2022 and February 28, 2021, respectively. Depreciation and amortization expense of the Eat Smart business totaled $5.1 million and $6.9 million for the nine months ended February 27, 2022 and February 28, 2021, respectively. Capital expenditures of the Eat Smart business totaled $1.9 million and $3.6 million for the nine months ended February 27, 2022 and February 28, 2021, respectively. Interest expense was allocated to discontinued operations based on the interest expense related to the amount of debt required to be paid down under the New Credit Agreements as a result of the Eat Smart Disposition. There were no assets or liabilities of Eat Smart as of February 27, 2022. The carrying amounts of the major classes of assets and liabilities of the Eat Smart business included in assets and liabilities of discontinued operations are as follows (in thousands):
|  |  | May 30, 2021
ASSETS |  |  |
Cash and cash equivalents |  |  | $ | 136 |
Accounts receivable, less allowance for credit losses |  |  | 28,583 |
Inventories |  |  | 6,587 |
Prepaid expenses and other current assets |  |  | 2,312 |
Total current assets, discontinued operations |  |  | 37,618 |
Investment in non-public company, fair value |  |  | 45,100 |
Property and equipment, net |  |  | 66,789 |
Operating lease right-of-use assets |  |  | 13,347 |
Goodwill |  |  | 35,470 |
Trademarks/tradenames, net |  |  | 8,228 |
Customer relationships, net |  |  | 2,260 |
Other assets |  |  | 80 |
Total other assets, discontinued operations |  |  | 171,274 |
Total assets, discontinued operations |  |  | $ | 208,892 |
LIABILITIES |  |  |
Accounts payable |  |  | $ | 31,271 |
Accrued compensation |  |  | 4,550 |
Other accrued liabilities |  |  | 4,041 |
Current portion of lease liabilities |  |  | 2,424 |
Deferred revenue |  |  | 493 |
Total current liabilities, discontinued operations |  |  | 42,779 |
Long-term lease liabilities |  |  | 14,030 |
Other non-current liabilities |  |  | 729 |
Non-current liabilities, discontinued operations |  |  | 14,759 |
Total liabilities, discontinued operations |  |  | $ | 57,538 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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