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Summary Of Significant Accounting Policies | 6 Months Ended
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Nov. 28, 2020
Summary Of Significant Accounting Policies [Abstract] |
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Financial Information The accompanying unaudited financial statements of the Company as of and for the three and six months ended November 28, 2020 and November 23, 2019 have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements include all adjustments (consisting only of normal recurring adjustments) management of the Company considers necessary for a fair presentation of its financial position at such dates and the operating results and cash flows for those periods. The fiscal 2020 year-end balance sheet data was derived from audited consolidated financial statements, and certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules or regulations; however, the Company believes the disclosures made are adequate to make the information presented not misleading. The unaudited consolidated results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended May 30, 2020, which are included in the Company’s Annual Report on Form 10-K (“Fiscal Year 2020 Form 10-K”) filed with the SEC on July 27, 2020 (File No. 0-32113). The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the Fiscal Year 2020 Form 10-K. The Company has reviewed its accounting policies and identified those that it believes to be critical to the preparation and understanding of its consolidated financial statements in the list set forth below. See the disclosure under the heading “Critical Accounting Policies” in Item 7 of Part II of the Fiscal Year 2020 Form 10-K for a detailed description of these policies and their potential effects on the Company’s results of operations and financial condition. Allowance for doubtful accounts Income taxes Revenue recognition Stock-based compensation Valuation of long-lived assets Valuation of goodwill Business combinations With the execution of its restructuring plan in Europe, the Company changed its internal management structure and its reporting structure of financial information used to assess performance and allocate resources during the second quarter of fiscal 2021. As a result, the Company revised its segment reporting effective in the second quarter of fiscal 2021. These changes impacted the Company’s reportable segments but did not impact the Company’s consolidated financial statements. See Note 12 – Segment Information for additional information about the segment change. Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates and assumptions used. Net (Loss) Income Per Share Information The Company presents both basic and diluted earnings (loss) per common share (“EPS”). Basic EPS is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period, calculated using the treasury stock method. Under the treasury stock method, assumed proceeds include the amount the employee must pay for exercising stock options and the amount of compensation cost for future services the Company has not yet recognized for the Company’s share-based payment awards. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and are excluded from the calculation. For the three months ended November 28, 2020, all common equivalent shares are excluded from the computation of weighted average number of common and common equivalent shares outstanding in the diluted EPS calculation due to the net loss position. The following table summarizes the calculation of net (loss) income per common share for the periods indicated (in thousands, except per share amounts):
| Three Months Ended | Six Months Ended
| November 28, |  | November 23, | November 28, |  | November 23,
| 2020 |  | 2019 | 2020 |  | 2019
Net (loss) income | $ | (992) |  | $ | 12,337 | $ | 1,292 |  | $ | 17,276
Basic: |  |  |  |  |  |  |  |  |  |
Weighted average shares |  | 32,356 |  |  | 31,984 |  | 32,270 |  |  | 31,852
Diluted: |  |  |  |  |  |  |  |  |  |
Weighted average shares |  | 32,356 |  |  | 31,984 |  | 32,270 |  |  | 31,852
Potentially dilutive shares |  | - |  |  | 385 |  | 47 |  |  | 435
Total dilutive shares |  | 32,356 |  |  | 32,369 |  | 32,317 |  |  | 32,287
Basic | $ | (0.03) |  | $ | 0.39 | $ | 0.04 |  | $ | 0.54
Dilutive | $ | (0.03) |  | $ | 0.38 | $ | 0.04 |  | $ | 0.54
Anti-dilutive shares not included above |  | 5,083 |  |  | 4,809 |  | 5,185 |  |  | 3,684
Financial Instruments The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels: ﻿ Level 1 – Quoted prices in active markets for identical assets and liabilities. ﻿ Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets. ﻿ Level 3 – Unobservable inputs. ﻿Contingent consideration liability is for estimated future contingent consideration payments related to the Company’s acquisitions. Total contingent consideration liabilities were $3.0 million and $7.9 million as of November 28, 2020 and May 30, 2020, respectively. The fair value measurement of the liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are the Company’s measures of the estimated payouts based on internally generated financial projections and discount rates. The fair value of contingent consideration liability is reassessed on a quarterly basis by the Company using additional information as it becomes available, and any change in the fair value estimates are recorded in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations. See Note 3 – Acquisition. ﻿ The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and long-term debt are carried at cost, which approximates their fair value because of the short-term maturity of these instruments or because their stated interest rates are indicative of market interest rates. Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Under ASU 2016-13, companies are required to present financial assets, measured at amortized cost basis, at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis, such as trade receivables. The measurement of expected credit loss will be based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company adopted this guidance using the modified retrospective adoption method beginning with its first quarter of fiscal 2021, and applied it to all applicable accounts. The application of this new guidance did not have a material impact on the Company’s consolidated financial condition, results of operations or cash flows.

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