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Discontinued Operations | 9 Months Ended
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Feb. 26, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations As discussed in Note 1 – Organization, Basis of Presentation, and Summary of Significant Accounting Policies – Yucatan Disposition and Discontinued Operations, on February 7, 2023, we completed the Yucatan Disposition. Yucatan Foods 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 Securities Purchase Agreement, Yucatan meets the accounting requirements for reporting as discontinued operations for all periods presented. The Discontinued Operations includes the operations of Eat Smart prior to its sale. There were no assets or liabilities of Yucatan Foods as of February 26, 2023. The assets and liabilities of Yucatan as of May 29, 2022 were as follows (in thousands):
|  | May 29, 2022
ASSETS |  |
Cash and cash equivalents |  | $ | 652 |
Accounts receivable, less allowance for credit losses |  | 8,078 |
Inventories |  | 22,545 |
Prepaid expenses and other current assets |  | 1,869 |
Total current assets, discontinued operations |  | 33,144 |
Property and equipment, net |  | 3,500 |
Operating lease right-of-use assets |  | 2,061 |
Trademarks/tradenames, net |  | 4,000 |
Customer relationships, net |  | 1,400 |
Other assets |  | 102 |
Total other non-current assets, discontinued operations |  | 11,063 |
Total assets, discontinued operations |  | $ | 44,207 |
LIABILITIES |  |
Accounts payable |  | $ | 2,814 |
Accrued compensation |  | 297 |
Other accrued liabilities |  | 800 |
Current portion of lease liabilities |  | 434 |
Total current liabilities, discontinued operations |  | 4,345 |
Long-term lease liabilities |  | 1,627 |
Non-current liabilities, discontinued operations |  | 1,627 |
Total liabilities, discontinued operations |  | $ | 5,972 |
The key components of income from discontinued operations for the three and nine months ended February 26, 2023 and February 27, 2022 were as follows (in thousands):
|  | Three Months Ended |  | Nine Months Ended
|  | February 26, 2023 |  | February 27, 2022 |  | February 26, 2023 |  | February 27, 2022
Product sales |  | $ | 10,811 |  |  | $ | 29,234 |  |  | $ | 42,820 |  |  | $ | 234,773 |
Cost of product sales |  | 12,571 |  |  | 29,041 |  |  | 44,812 |  |  | 222,948 |
Gross profit |  | (1,760) |  |  | 193 |  |  | (1,992) |  |  | 11,825 |
Operating costs and expenses: |  |  |  |  |  |  |  |
Research and development |  | — |  |  | 159 |  |  | 2 |  |  | 1,981 |
Selling, general and administrative |  | 1,902 |  |  | 3,245 |  |  | 5,216 |  |  | 19,804 |
Impairment of intangible asset and goodwill |  | — |  |  | — |  |  | 1,000 |  |  | 32,057 |
Loss on sale of Eat Smart |  | — |  |  | 235 |  |  | — |  |  | 235 |
Loss on Sale of Yucatan |  | 21,039 |  |  |  |  | 21,039 |  |  |
Restructuring costs |  | 30 |  |  | 3,209 |  |  | 30 |  |  | 4,642 |
Total operating costs and expenses |  | 22,971 |  |  | 6,848 |  |  | 27,287 |  |  | 58,719 |
Operating loss |  | (24,731) |  |  | (6,655) |  |  | (29,279) |  |  | (46,894) |
Interest expense |  | — |  |  | (204) |  |  | — |  |  | (2,682) |
Loss from discontinued operations before taxes |  | (24,731) |  |  | (6,859) |  |  | (29,279) |  |  | (49,576) |
Income tax benefit (expense) |  | — |  |  | 411 |  |  | — |  |  | (157) |
Loss from discontinued operations, net of tax |  | $ | (24,731) |  |  | $ | (6,448) |  |  | $ | (29,279) |  |  | $ | (49,733) |
Cash provided by operating activities by the Yucatan business totaled $0.1 million and $2.9 million for the nine months ended February 26, 2023 and 2022, respectively. There was no cash used in investing activities from the Yucatan business for the nine months ended February 26, 2023 and $2.5 million cash used in investing activities from the Yucatan business for the nine months ended February 27, 2022. Depreciation and amortization expense of the Yucatan business totaled $0.1 million and $0.8 million for the three months ended February 26, 2023 and 2022, respectively, and $0.5 million and $2.8 million for the nine months ended February 26, 2023 and 2022, respectively. There were no capital expenditures of the Yucatan business for the nine months ended February 26, 2023 and $2.5 million of capital expenditures for the nine months ended February 27, 2022. There was no cash used, provided by, nor any capital expenditures of, the Eat Smart business for the nine months ended February 26, 2023. Cash used in operating activities and cash provided by investing activities by the Eat Smart business totaled $5.5 million and $117.8 million for the nine months ended February 27, 2022, respectively. Depreciation and amortization expense of the Eat Smart business totaled $0.3 million and $5.1 million for the three and nine months ended February 27, 2022. Capital expenditures of the Eat Smart business totaled $1.9 million for the nine months ended February 27, 2022.

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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 https://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 https://asc.fasb.org/subtopic&trid=2122178 + Details
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