| 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 also sells premier California specialty olive oils and wine vinegars under the O brand which was acquired when it purchased O Olive Oil, Inc. (“O Olive”) on March 1, 2017 . O Olive® products are sold in over 4,600 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 consolidated 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 X. August 27, 2017 not 10 May 28, 2017 . The results of operations for the three August 27, 2017 not 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 accordance 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 (“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 consolidation, if by design: a) the total equity investment at risk is not , or b) as a group the holders of the equity investment at risk lack any one three not 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; inventories; 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; the valuation of investments; and the valuation and recognition of stock-based compensation and contingent liabilities . These estimates involve the consideration of complex factors and require management to make judgments. The analysis of historical and future trends 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 equivalents. Cash equivalents consist mainly of money market funds. The market value of cash equivalents approximates their historical cost given their short-term nature. Inventories Inventories are stated at the lower of cost ( first first method) or net realizable value and consist of the following (in thousands): August 27 , 2017 May 28, 2017 Raw materials $ 11,688 $ 10,158 Work in progress 3,847 3,447 Finished goods 12,604 11,685 Total $ 28,139 $ 25,290 If the cost of the inventories exceeds their net realizable value, provisions are recorded currently to reduce them to net realizable value. The Company also records a provision for slow moving and obsolete inventories based on the estimate of demand for its products. Related Party Transactions The Company sells products to and earns license fees from Windset. During the three August 27, 2017 August 28, 2016, $104,000 $118,000, $195,000 $388,000 August 27, 2017 May 28, 2017, All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors. Debt Issuance Costs The Company records its line of credit debt issuance costs as an asset, and as such, $120,000 $367 ,000 August 27, 2017, $120,000 $399,000, May 28, 2017. $60,000 $186,000 August 27, 2017 $60,000 $201,000, May 28, 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 g ain 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. Other Comprehensive Income Comprehensive income consists of two OCI”). OCI refers to revenue, expenses, and gains and losses that under GAAP are recorded as a component of stockholders’ equity but are excluded from net income. The Company’s OCI consists of net deferred gains and losses on its interest rate swap derivative instrument accounted for as a cash flow hedge. The components of OCI, net of tax, are as follows (in thousands): Unrealized Gains on Cash Flow Hedge Balance as of May 28, 2017 $ 432 Other comprehensive loss before reclassifications, net of tax effect (103 ) Amounts reclassified from OCI — Other comprehensive income, net 329 Balance as of A ugust 27, 2017 $ 329 The Company does not 12 Investment in Non-Public Company On Februa ry 15, 2011, 2010 August 27, 2017 May 28, 2017. 3 Intangible Assets The Company ’s intangible assets are comprised of customer relationships with a finite estimated useful life of eleven thirteen , and trademarks, tradenames and goodwill with indefinite useful lives. Finite-lived intangible assets are reviewed for possib le impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset group) may not 350 30 35. Partial Self-Insurance on Employee Health and Workers Compensation Plans The Company provides health insurance benefits to eligible employees under self-insured plans whereby the Company pays actual medical claims subject to certain stop loss limits and self-insures its workers compensation claims. The Company records self-insurance liabilities based on actual claims filed and an estimate of those claims incurred but not not August 27, 2017 May 28, 2017. may Fair Value Measurements The Company uses fair value measurement accounting for finan cial 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 3 not The accounting guidance established a three ring 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 As of August 27, 2017 May 28, 2017, . 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 option of accounting for its investment in Windset. The calculatio n 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 three August 27, 2017 26.9% At August 27, 2017 At May 28, 2017 Revenue growth rates 4% 4% Expense growth rates 4% 4% Income tax rates 15% 15% Discount rates 12% 12% 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 August 27, 2017 10% increase in revenue growth rates $ 7,300 10% increase in expense growth rates $ (1,800 ) 10% increase in income tax rates $ (500 ) 10% increase in discount rates $ (4,500 ) 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 August 27, 2017 Fair Value at May 28, 2017 Assets: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Interest rate swap (1) $ — $ 528 $ — $ — $ 688 $ — Investment in non-public company — — 64,500 — — 63,600 Total $ — $ 528 $ 64,500 $ — $ 688 $ 63,600 ( 1 Recorded in Other assets. Revenue Recognition See Note 9 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 uncollectible 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 accompanying Consolidated Statements of Comprehensive Income. In addition, Packaged 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% 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 65% 2017, 2 15% 2017, 3 20% 2017. 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-refund able contract fees for which no no For sales arrangements that contain mult iple elements, the Company splits the arrangement into separate units 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 not not The Company limits the amount of revenue recognition for delivered el ements to the amount that is not not not not For licensing revenue, the initial license fees are deferred and amortized to revenue over the pe riod 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 R&D 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 custo mers sales incentives, which include volume rebates 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 August 27 , 2017 August 28, 2016 Recorded upon shipment $ 113,121 $ 105,588 Recorded upon acceptance in foreign port 7,576 23,339 Revenue from multiple element arrangements 1,746 1,585 Revenue from license fees, R&D contracts and royalties/profit sharing 914 1,882 Total $ 123,357 $ 132,394 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 adju sted to reflect the impacts of negotiations, estimate settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal fees are expensed in the period in which they are incurred. Apio has been the target of a union organizing campaign which has included two 100 100 The legal actions consist of three 1 2 3 two 100 A settlement of the ULPs among the union, Apio, and Pacific Harvest that were pending before the NLRB was approved on December 27, 2016 $310,000. $155,000. May 5, 2017, September 2011 $6.0 three $2.4 July 3, 2017, $1.8 November 2017 $1.8 July 2018. one first $2.4 July 3, 2017 $1.2 December 2020. may second $1.8 November 2017, one third July 2018. As of August 27, 2017 and May 28, 2017, $2.0 $3.2 Rece nt Accounting Guidance Not Revenue Recognition In May 2014, 2014 09, 606 , Revenue from Contracts with Customers 605, Revenue Recognition 2014 09” five 2014 09. first 2019 Currently, the Company is in the process of evaluating the impact of the adoption of ASU 2014 09. as initially identified the following core revenue streams from its contracts with customers: ● Finished goods product sales (Packaged Fresh Vegetables); ● Shipping and handling (Packaged Fresh Vegetables); ● Buy-sell product sales (Food Export); ● Product develo pment and contract manufacturing arrangements (Biomaterials). The Company ’s assessment efforts to date have included reviewing current accounting policies, processes, and systems requirements, as well assigning internal resources and third 2014 09. 2014 09 2014 09 Currently, the Company cannot reasonably estimate the impact the application of ASU 2014 09 2014 09, may Leases In February 2016, 2016 02, Leases (Topic 842 2016 02” 2016 02 2016 02 first 2020 . The Company is currently in the process of evalua ting the impact that ASU 2016 02 ● Reviewing the provisions of ASU 2016 02; ● Gathering information to evaluate its lease pop ulation and portfolio; ● Evaluating the nature of its real and personal property and other arrangements that may ● Evaluating systems’ readiness . As a result of these efforts, the Company currently anticipates that the ado ption of ASU 2016 02 not |
