XML 33 R22.htm IDEA: XBRL DOCUMENT
v3.25.1

Leases | 9 Months Ended
--- | ---
Feb. 23, 2025
Leases [Abstract] |
Leases | Leases Operating lease right-of-use assets and liabilities are classified as standalone captions on the consolidated balance sheets, finance lease assets are classified as property, plant and equipment, and finance lease liabilities are classified as debt. The components of lease cost were as follows:
| Nine months ended
| February 23, 2025 |  | February 25, 2024
Finance lease cost: |  |  |
Amortization of leased assets | $ | 120 |  |  | $ | 101 |
Interest on lease liabilities | 324 |  |  | 280 |
Operating lease cost | 253 |  |  | 260 |
Variable lease cost | — |  |  | 306 |
Sublease income | — |  |  | (148) |
Total lease cost | $ | 697 |  |  | $ | 799 |
Weighted-average remaining lease term: |  |  |
Operating leases | 7.9 years |  | 8.5 years
Finance leases | 9.5 years |  | 3.7 years
Weighted-average discount rate: |  |  |
Operating leases | 3.02 | % |  | 3.04 | %
Finance leases | 8.91 | % |  | 11.10 | %
As most of the leases do not provide an implicit rate, the Company determines its incremental borrowing rate based on information available at the lease commencement date. The relatively lower discount rates for operating leases reflect favorable market rates of interest and company credit ratings in 2020 when the largest operating lease for its Chanhassen, Minnesota lease commenced (as described further below). Likewise, the relatively higher discount rates for finance leases reflect the less favorable market rates of interest and company credit ratings in 2024 when the largest finance lease for its Chaska, Minnesota lease commenced (as described further below). The Company’s leases have original lease periods ending through 2033. The Company’s maturity analysis of operating and finance lease liabilities as of February 23, 2025 are as follows:
| Operating leases |  | Finance leases
Remainder of fiscal year 2025 | $ | 3,685 |  |  | $ | 170 |
Fiscal year: |  |  |
2026 | 433 |  |  | 682 |
2027 | 416 |  |  | 698 |
2028 | 302 |  |  | 715 |
2029 | 146 |  |  | 732 |
2030 | 150 |  |  | 722 |
Thereafter | 436 |  |  | 6,396 |
Total lease payments | 5,568 |  |  | 10,115 |
Less: interest | (166) |  |  | (4,112) |
Present value of lease liabilities | $ | 5,402 |  |  | $ | 6,003 |
Current portion | $ | 3,966 |  |  | $ | 157 |
Noncurrent portion | 1,436 |  |  | 5,846 |
Present value of lease liabilities | $ | 5,402 |  |  | $ | 6,003 |
Most of the amount shown above as due during the remainder of 2025 relates to overdue payments for a leased facility in California. The Company anticipates settling these obligations in the fourth quarter of fiscal 2025. See section entitled "Landlord complaints" in note 9 and note 18 for additional details. Supplemental cash flow information related to leases are as follows:
| Nine months ended
| February 23, 2025 |  | February 25, 2024
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 334 |  |  | $ | 644 |
Operating cash flows from finance leases | 311 |  |  | 288 |
Financing cash flows from finance leases | (2,267) |  |  | 86 |
Lease liabilities arising from obtaining right-of-use assets: |  |  |
Finance leases | 2,737 |  |  | — |
Finance leases In September 2015, Lifecore executed a lease for a building in Chaska, Minnesota near its headquarters facility. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 2016. Lifecore is currently using the building for warehousing and final packaging. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years, which extended the lease to December 31, 2027. That lease amendment contained a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. The finance lease obligation at May 26, 2024 assumed the buyout option would be exercised during fiscal year 2028, which was estimated to be $2,568. On August 9, 2024, Lifecore amended this lease to provide for a $2,400 cash payment to the Company in exchange for a revised rent payment schedule and an updated purchase option. This cash payment was received in October 2024, which made the amendment fully effective, and increased the future lease payments by $2,637. The amendment extended the lease term to September 30, 2034, and the future payment obligations were discounted at the Company’s incremental borrowing rate of 9%. The finance lease obligation at February 23, 2025 assumed the amended buyout option would be exercised on September 30, 2034, which is estimated to be $3,100. The only other finance lease that Lifecore has relates to a truck that was executed during fiscal year 2024. The truck lease runs for six years and had an initial capitalized amount of $196. Operating leases Lifecore 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. The only active operating real estate lease relates to a building in Chanhassen, Minnesota containing a warehouse and office space. The lease commenced on January 1, 2021 with an initial term of seven years and two months, plus an option to extend it for an additional five years. The extension period was included in the lease obligation at inception since it was reasonably certain to be exercised. Prior to occupancy, $1,922 in improvements were made to the building, which was funded by the lessor. Lifecore is reimbursing the lessor for costs over 84 months. The future lease payments under this lease, which extend through 2033, total $1,956 as of February 23, 2025. An operating lease for the Curation Foods former headquarters located in Santa Maria, California was terminated in December 2023. The property was vacated and surrendered to the lessor on February 29, 2024. The only other Lifecore operating leases relate to printer/copiers, with terms ranging from 36 to 60 months. The future lease payments under these leases, which extend through March 2027, totaled $39 as of February 23, 2025.
Leases | Leases Operating lease right-of-use assets and liabilities are classified as standalone captions on the consolidated balance sheets, finance lease assets are classified as property, plant and equipment, and finance lease liabilities are classified as debt. The components of lease cost were as follows:
| Nine months ended
| February 23, 2025 |  | February 25, 2024
Finance lease cost: |  |  |
Amortization of leased assets | $ | 120 |  |  | $ | 101 |
Interest on lease liabilities | 324 |  |  | 280 |
Operating lease cost | 253 |  |  | 260 |
Variable lease cost | — |  |  | 306 |
Sublease income | — |  |  | (148) |
Total lease cost | $ | 697 |  |  | $ | 799 |
Weighted-average remaining lease term: |  |  |
Operating leases | 7.9 years |  | 8.5 years
Finance leases | 9.5 years |  | 3.7 years
Weighted-average discount rate: |  |  |
Operating leases | 3.02 | % |  | 3.04 | %
Finance leases | 8.91 | % |  | 11.10 | %
As most of the leases do not provide an implicit rate, the Company determines its incremental borrowing rate based on information available at the lease commencement date. The relatively lower discount rates for operating leases reflect favorable market rates of interest and company credit ratings in 2020 when the largest operating lease for its Chanhassen, Minnesota lease commenced (as described further below). Likewise, the relatively higher discount rates for finance leases reflect the less favorable market rates of interest and company credit ratings in 2024 when the largest finance lease for its Chaska, Minnesota lease commenced (as described further below). The Company’s leases have original lease periods ending through 2033. The Company’s maturity analysis of operating and finance lease liabilities as of February 23, 2025 are as follows:
| Operating leases |  | Finance leases
Remainder of fiscal year 2025 | $ | 3,685 |  |  | $ | 170 |
Fiscal year: |  |  |
2026 | 433 |  |  | 682 |
2027 | 416 |  |  | 698 |
2028 | 302 |  |  | 715 |
2029 | 146 |  |  | 732 |
2030 | 150 |  |  | 722 |
Thereafter | 436 |  |  | 6,396 |
Total lease payments | 5,568 |  |  | 10,115 |
Less: interest | (166) |  |  | (4,112) |
Present value of lease liabilities | $ | 5,402 |  |  | $ | 6,003 |
Current portion | $ | 3,966 |  |  | $ | 157 |
Noncurrent portion | 1,436 |  |  | 5,846 |
Present value of lease liabilities | $ | 5,402 |  |  | $ | 6,003 |
Most of the amount shown above as due during the remainder of 2025 relates to overdue payments for a leased facility in California. The Company anticipates settling these obligations in the fourth quarter of fiscal 2025. See section entitled "Landlord complaints" in note 9 and note 18 for additional details. Supplemental cash flow information related to leases are as follows:
| Nine months ended
| February 23, 2025 |  | February 25, 2024
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 334 |  |  | $ | 644 |
Operating cash flows from finance leases | 311 |  |  | 288 |
Financing cash flows from finance leases | (2,267) |  |  | 86 |
Lease liabilities arising from obtaining right-of-use assets: |  |  |
Finance leases | 2,737 |  |  | — |
Finance leases In September 2015, Lifecore executed a lease for a building in Chaska, Minnesota near its headquarters facility. Lifecore and the lessor made capital improvements prior to occupancy and thus the lease did not become effective until January 2016. Lifecore is currently using the building for warehousing and final packaging. The initial term of the lease was seven years with two five-year renewal options. In December 2022, Lifecore exercised one of the options to renew the lease for an additional five years, which extended the lease to December 31, 2027. That lease amendment contained a buyout option at any time during the renewal period with the purchase price equal to the mortgage balance on the lessor’s loan secured by the building. The finance lease obligation at May 26, 2024 assumed the buyout option would be exercised during fiscal year 2028, which was estimated to be $2,568. On August 9, 2024, Lifecore amended this lease to provide for a $2,400 cash payment to the Company in exchange for a revised rent payment schedule and an updated purchase option. This cash payment was received in October 2024, which made the amendment fully effective, and increased the future lease payments by $2,637. The amendment extended the lease term to September 30, 2034, and the future payment obligations were discounted at the Company’s incremental borrowing rate of 9%. The finance lease obligation at February 23, 2025 assumed the amended buyout option would be exercised on September 30, 2034, which is estimated to be $3,100. The only other finance lease that Lifecore has relates to a truck that was executed during fiscal year 2024. The truck lease runs for six years and had an initial capitalized amount of $196. Operating leases Lifecore 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. The only active operating real estate lease relates to a building in Chanhassen, Minnesota containing a warehouse and office space. The lease commenced on January 1, 2021 with an initial term of seven years and two months, plus an option to extend it for an additional five years. The extension period was included in the lease obligation at inception since it was reasonably certain to be exercised. Prior to occupancy, $1,922 in improvements were made to the building, which was funded by the lessor. Lifecore is reimbursing the lessor for costs over 84 months. The future lease payments under this lease, which extend through 2033, total $1,956 as of February 23, 2025. An operating lease for the Curation Foods former headquarters located in Santa Maria, California was terminated in December 2023. The property was vacated and surrendered to the lessor on February 29, 2024. The only other Lifecore operating leases relate to printer/copiers, with terms ranging from 36 to 60 months. The future lease payments under these leases, which extend through March 2027, totaled $39 as of February 23, 2025.

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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types: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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration