| Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | 1. Organization, Basis of Presentation , and Summary of Significant Accounting Policies Organization Landec Corporation and its subsidiaries (“ Landec” or the “Company”) design, develop, manufacture , and sell differentiated products for food and biomaterials markets , and license technology applications to partners. The Company has two 1) 2) , and foodservice operators, primarily in the United States, Canada , and Asia through its Apio, Inc. (“Apio”) subsidiary , and sells HA-based and non-HA biomaterials through its Lifecore Biomedical, Inc. (“Lifecore”) subsidiary. The Company’s HA biopolymers and non-HA materials are proprietary in that they are specially formulated for specific customers to meet strict regulatory requirements. The Company’s technologies, along with its customer relationships and tradenames, are the foundation, and a key differentiating advantage upon which Landec has built its business. Basis of Presentation The accompanying unaudited conso lidated financial statements of Landec have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10 10 February 26, 2017 10 May 29, 2016 . Certain prior period data has been reclassified in the consolidated financial statements and accompanying footnotes to conform to current period presentation. The resu lts of operations for the nine February 26, 2017 may , and the order patterns of Lifecore’s customers which may Basis of Consolidation The consolidated financial statements are presented on the accrual basis of accounting in accorda nce with GAAP and include the accounts of Landec Corporation and its subsidiaries, Apio and Lifecore. All intercompany transactions and balances have been eliminated. Arrangements that are not controlled through voting or similar rights are reviewed under the guidance for variable interest entities (“VIEs”). A company is required to consolidate the assets, liabilities , and operations of a VIE if it is determined to be the primary beneficiary of the VIE. An entity is a VIE and subject to consolidati on, if by design: a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any party, including equity holders , or b) as a group the holders of the equity investment at risk lack any one three Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition; loss contingencies; sales returns and allowances; self-insurance liabilities; recognition and measurement of current and deferred income tax assets and liabilities; the assessment of recoverability of long-lived assets including intangible assets and inventory; the valuation of investments; and the valuation and recognition of stock-based compensation. These estimates involve the consideration of complex factors and require management to make judgments. The analysis of historical and future tr ends can require extended periods of time to resolve and are subject to change from period to period. The actual results may Cash and Cash Equivalents The Company records all highly liquid securities with three s or less from date of purchase to maturity as cash equivalents. Cash equivalents consist mainly of money market funds. The market value of cash equivalents approximates their historical cost given their short-term nature. Debt Issuance Costs The Company records its line of credit debt issuance costs as an asset, and as such, $120,000 $431 ,000 February 26, 2017. $60,000 $216,000 February 26, 2017. 7 Financial Instruments The Company ’s financial instruments are primarily composed of commercial-term trade payables, grower advances, notes receivable , and debt instruments. For short-term instruments, the historical carrying amount approximates the fair value of the instrument. The fair value of long-term debt approximates its carrying value . Cash Flow Hedges The Company entered into an interest rate swap agreement to manage interest rate risk. This derivative instrument may For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of Accumulated Other Comprehensive Income in Stockholders’ Equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in earnings in the current period. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For additional information refer to Note 10 – Comprehensive Income . Investment in Non-Public Company On February 15, 2011, 150,000 $15 201 $201 2010 (“Windset”). On July 15, 2014, 68 51,211 $11 October 29, 2014, 70,000 $7 February 26, 2017 May 29, 2016. 2 . Intangible Assets The Company ’s intangible assets are comprised of customer relationships with a finite estimated useful life of twelve thirteen , and trademarks, tradenames and goodwill with indefinite lives. Finite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset gr oup) may 350 30 35. Fair Value Measurements The Company uses fair value measurement accounting for financial assets and liabilities and for financial instruments and certain other items measured at fair value. The Company has elected the fair value option for its investment in a non-public company. See Note 2 The accounting guidance established a three lue measurements, which prioritizes the inputs used in measuring fair value as follows: Level 1 – observable inputs such as quoted prices for identical instruments in active markets. Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data. Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions. As of February 26, 2017 May 29, 2016, . The fair value of the Company ’s interest rate swap is determined based on model inputs that can be observed in a liquid market, including yield curves, and is categorized as a Level 2 The Company has elected the fair value opti on of accounting for its investment in Windset. The calculation of fair value utilizes significant unobservable inputs, including projected cash flows, growth rates , and discount rates. As a result, the Company’s investment in Windset is considered to be a Level 3 nine February 26, 2017 26.9% February 26, 2017 May 29, 2016 Revenue growth rates 4% 4% Expense growth rates 4% 4% Income tax rates 15% 15% Discount rates 12% 12.5% The revenue growth, expense growth , and income tax rate assumptions are considered the Company's best estimate of the trends in those items over the discount period. The discount rate assumption takes into account the risk-free rate of return, the market equity risk premium , and the company’s specific risk premium and then applies an additional discount for lack of liquidity of the underlying securities. The discounted cash flow valuation model used by the Company has the following sensitivity to changes in inputs and assumptions (in thousands): Impact on value of investment in Windset as of February 26, 2017 10% increase in revenue growth rates $ 7,200 10% increase in expense growth rates $ (2,100 ) 10% increase in income tax rates $ (400 ) 10% increase in discount rates $ (4,300 ) Imprecision in estimating unobservable market inputs can affect the amount of gain or loss recorded for a particular position. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value at February 26, 2017 Fair Value at May 29, 2016 Assets: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Interest rate swap (1) $ — $ 681 $ — $ — $ — $ — Investment in non-public company — — 63,400 — — 62,700 Total $ — $ 681 $ 63,400 $ — $ — $ 62,700 (1) Recorded in Other assets. Revenue Recognition See Note 1 1 four Revenue from product sales is recognized when there is persuasive evidence that an arrangement exists, title has transferred, the price is fixed and determinable, and collectability is reasonably assured. Allowances are established for estimated uncollect ible amounts, product returns, and discounts based on specific identification and historical losses. Apio ’s Packaged Fresh Vegetables revenues generally consist of revenues generated from the sale of specialty packaged fresh-cut and whole value-added vegetable products that are generally washed and packaged in Apio’s proprietary packaging and sold under Apio’s Eat Smart and GreenLine brands and various private labels. Revenue is generally recognized upon shipment of these products to customers. The Company takes title to all produce it trades and/or packages, and therefore, records revenues and cost of sales at gross amounts in the Consolidated Statements of Comprehensive Income. In addition, Packag ed Fresh Vegetables revenues include the revenues generated from Apio Cooling, LP, a vegetable cooling operation in which Apio is the general partner with a 60% , and from the sale of BreatheWay® packaging to license partners. Revenue is recognized on the vegetable cooling operations as cooling and storage services are provided to Apio’s customers. Sales of BreatheWay packaging are recognized when shipped to Apio’s customers. Apio ’s Food Export revenues consist of revenues generated from the purchase and sale of primarily whole commodity fruit and vegetable products to Asia through its subsidiary, Cal-Ex Trading Company (“Cal-Ex”). As most Cal-Ex customers are in countries outside of the U.S., title transfers and revenue is generally recognized upon arrival of the shipment in the foreign port. Apio records revenue equal to the sale price to third Lifecore ’s Biomaterials business principally generates revenue through the sale of products containing HA. Lifecore primarily sells products to customers in three (1) 55% 2016, (2) 20% 2016 , and (3) 25% 2016. Lifecore ’s business development revenues, a portion of which are included in all three Contract R&D revenue is recorded as earned, based on the performance requirements of the contract. Non-refundable contract fees for which no further performance obligations ex ist, and there is no continuing involvement by the Company, are recognized on the earlier of when the payment is received or collection is assured. For sales arrangements that contain multiple elements, the Company splits the arrangement into separate un its of accounting if the individually delivered elements have value to the customer on a standalone basis. The Company also evaluates whether multiple transactions with the same customer or related party should be considered part of a multiple element arrangement, whereby the Company assesses, among other factors, whether the contracts or agreements are negotiated or executed within a short time frame of each other or if there are indicators that the contracts are negotiated in contemplation of each other. The Company then allocates revenue to each element based on a selling price hierarchy. The relative selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third The Company limits the amount of revenue recognition for delivered elements to the amount that is not contingent o n the future delivery of products or services or future performance obligations or subject to customer-specific cancellation rights. The Company evaluates each deliverable in an arrangement to determine whether it represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has stand-alone value, and for an arrangement that includes a general right of return relative to the delivered products or services, delivery or performance of the undelivered product or service is considered probable and is substantially controlled by the Company. The Company considers a deliverable to have stand-alone value if the product or service is sold separately by the Company or another vendor or could be resold by the customer. Further, the revenue arrangements generally do not include a general right of return relative to delivered products. Where the aforementioned criteria for a separate unit of accounting are not met, the deliverable is combined with the undelivered element(s) and treated as a single unit of accounting for the purposes of allocation of the arrangement consideration and revenue recognition. The Company allocates the total arrangement consideration to each separable element of an arrangement based upon the relative selling price of each element. Allocation of the consideration is determined at arrangement inception on the basis of each unit’s relative selling price. In instances where the Company has not established fair value for any undelivered element, revenue for all elements is deferred until delivery of the final element is completed and all recognition criteria are met. For licensing revenue, the initial license fees are deferred and amortized to revenue over the period of the agreement when a contract exists, the fee is fixed and determinable, and collectability is reasonably assured. Noncancellable, nonrefundable license fees are recognized over the period of the agreement, including those governing research and development activities and any related supply agreement entered into concurrently with the license when the risk associated with commercialization of a product is non-substantive at the outset of the arrangement. From time to time, the Company offers customers sales incentives, which include volume r ebates and discounts. These amounts are estimated on a quarterly basis and recorded as a reduction of revenue. A summary of revenues by type of arrangement as described above is as follows (in thousands): Three Months Ended Nine Months Ended February 26, 2017 February 28, 2016 February 26, 2017 February 28, 2016 Recorded upon shipment $ 125,765 $ 118,789 $ 339,917 $ 341,914 Recorded upon acceptance in foreign port 7,276 6,389 56,316 50,873 Revenue from multiple element arrangements 2,624 4,025 5,892 9,672 Revenue from license fees, R&D contracts and royalties/profit sharing 903 787 2,702 3,327 Total $ 136,568 $ 129,990 $ 404,827 $ 405,786 Legal Contingencies In the ordinary course of business, the Company is involved in various legal proceedings and claims. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least each fiscal quarter and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events pertaining to a particular matter. Apio has been the target of a union organizing campaign which has included two 100 arvest, Inc. and Rancho Harvest, Inc. (collectively "Pacific Harvest"), Apio's plant labor contractors, bringing legal actions before various state and federal agencies, the California Superior Court, and initiating over 100 The Company has been a co-defendant in civil actions and administrative actions involving claims filed by current and past employees of Pacific Harvest. The legal actions consist of three (1) (2) (3) two 100 A settlement of the ULPs among a union, Apio, and Pacific Harvest that were pending before the NLRB was approved on December 27, 2016 $310,000. $155,000. ion/wrongful termination claims and the wage and hour claims, on February 23, 2017, $6.0 three $2.4 April 2017, $1.8 November 2017, $1.8 July 2018. one Based on the initial number of asserted claims and the initial length of time covered by the claims, Apio had recorded a legal settlement contingency accrual of $1.3 November 27, 2016, the costs of the legal actions prior to the broader settlement ultimately reached; which significantly increased the number of potential claims and the number of past years covered in the final settlement, thus resulting in the higher final settlement amount. During the three nine February 26, 2017, $2.1 $2.6 February 26, 2017, $3.2 Recently Adopted Accounting Guidance Debt Extinguishment Costs In Augus t 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016 15, Statement of Cash Flows (Topic 230) 2016 15”). 2016 15 230. ASU 2016 15 eight one 15 December 2017, 2016 15 November 27, 2016 . The adoption had no impact on our consolidated financial statements or related disclosures. The Company paid $233,000 November 27, 2016. Debt Issuance Costs In April 2015, 2015 03, Interest - Imputation of Interest (Subtopic 835 30): 2015 03”). , except in instances where proceeds from the related debt agreement have not been received. In August 2015, 2015 15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements 2015 15”). 2015 15 835 30 Securities and Exchange Commission would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. The Company adopted ASU 2015 03 and ASU 2015 15 first August 28, 2016 May 29, 2016 2015 03 $817,000 May 29, 2016 May 29, 2016 (1) $175 ,000 (2) $642,000 (3) $817,000 2015 15 $120,00 0 $431 ,000 February 26, 2017 . ASU 2015 03 2015 15 Stock-Based Compensation In March 2016, 2016 09 , Compensation - Stock Compensation (Topic 718): 2016 09”). May 29, 2017, The C ompany elected to early adopt the new guidance in the quarter beginning May 30, 2016 . Accordingly, the primary effects of the adoption are as follows: (1) a modified retrospective application, the Company recorded unrecognized excess tax benefits of $549 ,000 , and reduced deferred taxes by the same, (2) a modified retrospective application, the Company has elected to recognize forfeitures as they occur and recorded a $200,000 , a $126,000 $74,000 (3) $90,000 nine February 26, 2017 5 Recent Accounting Guidance Not Yet Adopted Leases In February 2016, 2016 02, Leases (Topic 842) 2016 02”), 2016 02 first 2020 2016 02 Revenue Recognition In May 2014, 2014 09, 606 , Revenue from Contracts with Customers 605, Revenue Recognition 2014 09”). five 2014 09 2015 14, Revenue from Contracts with Customers: Deferral of the Effective Date (Topic 606) one 2014 09 December 15, 2017, December 15, 2016. March 2016, 2016 08, Revenue from Contracts with Customers (Topic 606) 2014 09. April 2016, 2016 10, Revenue from Contracts with Customers Topic 606 Identifying Performance Obligations and Licensing, two 606: 2014 09. May 2016, 2016 12, Revenue from Contracts with Customers (Topic 606): 606 first 2019. |
