View Filing Data

Selling, general and administrative

23,432,000

12,931,000

63,529,000

48,173,000

Operating expenses:

Research and development

2,014,000

1,895,000

5,917,000

5,413,000

15,009,000

10,659,000

41,969,000

35,638,000

Legal settlement charge

2,080,000

2,580,000

Impairment of GreenLine tradename

34,000,000

^[1]

Total operating costs and expenses

19,103,000

46,554,000

50,466,000

75,051,000

Operating income (loss)

4,329,000

(33,623,000)

13,063,000

(26,878,000)

413,000

1,238,000

8,000

17,000

15,000

64,000

Net income (loss) before taxes

(400,000)

(484,000)

(1,432,000)

(1,425,000)

Loss on debt refinancing

(1,233,000)

^[1]

Other income

700,000

1,000,000

5,050,000

(33,677,000)

12,351,000

(26,001,000)

Income tax (expense) benefit

(1,556,000)

12,510,000

(4,138,000)

9,750,000

Consolidated net income (loss)

3,494,000

(21,167,000)

8,213,000

(16,251,000)

^[1]

Non-controlling interest income (expense)

6,000

(23,000)

(75,000)

(119,000)

Net income (loss) and comprehensive income applicable to common stockholders

$ 3,500,000

$ (21,190,000)

$ 8,138,000

$ (16,370,000)

Basic net income (loss) per share (in dollars per share)

$ 0.13

$ (0.78)

$ 0.30

$ (0.61)

Diluted net income (loss) per share (in dollars per share)

$ 0.13

$ (0.78)

$ 0.29

$ (0.61)

Shares used in per share computation

Basic (in shares)

27,286

27,054

27,252

27,026

Diluted (in shares)

27,682

27,054

27,608

27,026

Other comprehensive income, net of tax:

Change in net unrealized gains on interest rate swap (net of tax effect of $59, $0, $251, and $0)

$ 103,000

$ 430,000

Other comprehensive income, net

103,000

430,000

Total comprehensive income (loss)

$ 3,603,000

$ (21,190,000)

$ 8,568,000

$ (16,370,000)

[1]	See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for a discussion of accounting principles adopted during the period.

Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Change in net unrealized gains on interest rate swap, tax	$ 59	$ 0	$ 251	$ 0

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - 9 months ended Feb. 26, 2017 - USD ($)
shares in Thousands, $ in Thousands

Common Stock [Member]

Additional Paid-in Capital [Member]

Retained Earnings [Member]

AOCI Attributable to Parent [Member]

Noncontrolling Interest [Member]

Total

Balance (in shares) at May. 29, 2016

27,148

Balance at May. 29, 2016

$ 27

$ 137,244

$ 73,457

$ 1,622

$ 210,728

^[1]

Issuance of common stock at $5.63 to $6.66 per share, net of taxes paid by Landec on behalf of employees (in shares)

Issuance of common stock at $5.63 to $6.66 per share, net of taxes paid by Landec on behalf of employees

233

Issuance of common stock for vested restricted stock units (“RSUs”) (in shares)

Taxes paid by Company for stock swaps and RSUs

(385)

Stock-based compensation

2,842

Payments to non-controlling interest

(166)

Net income

8,138

Other comprehensive income, net of tax

$ 430

430

Balance (in shares) at Feb. 26, 2017

27,305

Balance at Feb. 26, 2017

$ 27

140,134

82,018

430

1,531

222,609

Cumulative Effect of New Accounting Principle in Period of Adoption

^[2]

$ 200

$ 423

$ 623

[1]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.
[2]	See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for a discussion of accounting guidance adopted during the period.

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - Additional Paid-in Capital [Member]	Feb. 26, 2017 $ / shares
Minimum [Member]
Issuance of common stock, per share (in dollars per share)	$ 5.63
Maximum [Member]
Issuance of common stock, per share (in dollars per share)	$ 6.66

Consolidated Statements of Cash Flows (Unaudited) - USD ($)

9 Months Ended

Feb. 26, 2017

Feb. 28, 2016

^[1]

Cash flows from operating activities:

Consolidated net income (loss)

$ 8,213,000

$ (16,251,000)

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation expense

7,827,000

6,486,000

2,842,000

2,581,000

Deferred taxes

3,437,000

(10,560,000)

Loss on early debt extinguishment

1,233,000

Change in investment in non-public company, fair value

(700,000)

(1,000,000)

Net loss (gain) on disposal of property and equipment

264,000

(20,000)

Impairment of GreenLine tradename

34,000,000

Changes in current assets and current liabilities:

Accounts receivable, net

488,000

3,555,000

Inventories

2,262,000

(2,135,000)

Prepaid expenses and other current assets

(137,000)

(14,000)

Deposit for workers’ compensation collateral

(100,000)

(225,000)

Accounts payable

(6,140,000)

(9,918,000)

Accrued compensation

676,000

(2,536,000)

Other accrued liabilities

3,419,000

2,158,000

Deferred revenue

(403,000)

309,000

Net cash provided by operating activities

23,181,000

6,430,000

Cash flows from investing activities:

Purchases of property and equipment

(9,488,000)

(26,159,000)

Deposit on capital lease

(850,000)

Proceeds from sales of fixed assets

74,000

127,000

Net cash used in investing activities

(9,414,000)

(26,882,000)

Cash flows from financing activities:

Proceeds from sale of common stock

233,000

282,000

Taxes paid by Company for stock swaps and RSUs

(385,000)

Proceeds from long-term debt

50,000,000

26,748,000

Payments on long-term debt

(55,966,000)

(12,150,000)

Proceeds from lines of credit

1,500,000

19,500,000

Payments on lines of credit

(5,000,000)

(19,500,000)

Payments for debt issuance costs

(902,000)

Payments for early debt extinguishment penalties

(233,000)

Payments to non-controlling interest

(166,000)

(248,000)

Other, net

(8,000)

(93,000)

Net cash (used in) provided by financing activities

(10,927,000)

14,539,000

Net increase (decrease) in cash and cash equivalents

2,840,000

(5,913,000)

Cash and cash equivalents at beginning of period

9,894,000

^[2]

14,127,000

Cash and cash equivalents at end of period

12,734,000

8,214,000

Supplemental disclosures of noncash investing and financing activities:

Facility acquired under a capital lease

$ 3,775,000

[1]	See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for a discussion of accounting principles adopted during the period.
[2]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.

Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies

9 Months Ended

Feb. 26, 2017

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

proprietary polymer technology platforms:

Intelimer® polymers, and

hyaluronan (“HA”) biopolymers. The Company sells specialty packaged branded Eat Smart® and GreenLine® and private label fresh-cut vegetables and whole produce to retailers, club stores

, 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

-Q and Article

of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made which are necessary to present fairly the financial position of the Company at

February

26,

2017

and the results of operations and cash flows for all periods presented. Although Landec believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in financial statements and related footnotes prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission. The accompanying financial data should be reviewed in conjunction with the audited financial statements and accompanying notes included in Landec's Annual Report on Form

-K for the fiscal year ended

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

months ended

February

26,

2017

are not necessarily indicative of the results that

may

be expected for an entire fiscal year because there is some seasonality in Apio’s food business, particularly, Apio’s export business

, and the order patterns of Lifecore’s customers which

may

lead to significant fluctuations in Landec’s quarterly results of operations.

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

of the following

three

characteristics: (i) the power, through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity. The Company reviewed the consolidation guidance and concluded that its partnership interest in Apio Cooling, LP and its equity investment in the non-public company are not VIEs.

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

differ from management’s estimates.

Cash and Cash Equivalents

The Company records all highly liquid securities with

three

month

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

and

$431

,000

was recorded as prepaid expenses and other current assets and other assets, respectively, as of

February

26,

2017.

The Company records its term debt issuance costs as a contra-liability, and as such,

$60,000

and

$216,000

was recorded as current portion of long-term debt and long-term debt, respectively, as of

February

26,

2017.

See Note

– Debt of the Notes to Consolidated Financial Statements for further information.

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

offset a portion of the changes in interest expense. The Company designates this derivative instrument as a cash flow hedge. The Company accounts for its derivative instrument as either an asset or a liability and carries it at fair value in Other assets or Other non-current liabilities. The accounting for changes in the fair value of the derivative instrument depends on the intended use of the derivative instrument and the resulting designation.

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

– Comprehensive Income

Investment in Non-Public Company

February

15,

2011,

Apio purchased

150,000

senior preferred shares for

$15

million and

201

common shares for

$201

that were issued by Windset Holdings

2010

Ltd., a Canadian corporation

(“Windset”). On

July

15,

2014,

Apio increased its investment in Windset by purchasing an additional

common shares and

51,211

junior preferred shares of Windset for

$11

million. On

October

29,

2014,

Apio purchased an additional

70,000

senior preferred shares of Windset for

million. These investments are reported as an investment in non-public company, fair value, in the accompanying Consolidated Balance Sheets as of

February

26,

2017

and

May

29,

2016.

The Company has elected to account for its investment in Windset under the fair value option. See Note

– Investment in Non-public Company for further information

Intangible Assets

The Company

’s intangible assets are comprised of customer relationships with a finite estimated useful life of

twelve

thirteen

years

, 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

not be recoverable. Indefinite lived intangible assets are reviewed for impairment at least annually. For goodwill and other indefinite-lived intangible assets, the Company performs a qualitative impairment analysis in accordance with Accounting Standards Codification (“ASC”)

350

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

– Investment in Non-public Company for further information. The Company has not elected the fair value option for any of its other eligible financial assets or liabilities.

The accounting guidance established a

three

-tier hierarchy for fair va

lue measurements, which prioritizes the inputs used in measuring fair value as follows:

Level

– observable inputs such as quoted prices for identical instruments in active markets.

Level

– inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data.

Level

– 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

and

May

29,

2016,

the Company held certain assets that are required to be measured at fair value on a recurring basis, including its interest rate swap and its minority interest investment in Windset

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

measurement and is recorded as other assets in the Consolidated Balance Sheet.

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

measurement investment. The change in the fair value of the Company’s investment in Windset for the

nine

months ended

February

26,

2017

was due to the Company’s

26.9%

minority interest in the change in the fair market value of Windset during the period. In determining the fair value of the investment in Windset, the Company utilizes the following significant unobservable inputs in the discounted cash flow models:

	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

– Business Segment Reporting, for a discussion about the Company’s

four

business segments; namely, Packaged Fresh Vegetables, Food Export, Biomaterials, and Corporate.

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%

ownership position

, 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

parties because it takes title to the product while in transit.

Lifecore

’s Biomaterials business principally generates revenue through the sale of products containing HA. Lifecore primarily sells products to customers in

three

medical areas:

(1)

Ophthalmic, which represented approximately

55%

of Lifecore’s revenues in fiscal year

2016,

(2)

Orthopedic, which represented approximately

20%

of Lifecore’s revenues in fiscal year

2016

, and

(3)

Other/Non-HA products, which represented approximately

25%

of Lifecore’s revenues in fiscal year

2016.

The vast majority of Lifecore’s revenues are recognized upon shipment.

Lifecore

’s business development revenues, a portion of which are included in all

three

medical areas, are related to contract research and development (“R&D”) services and multiple element arrangement services with customers where the Company provides products and/or services in a bundled arrangement.

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

-party evidence (“TPE”), if VSOE is not available, or estimated selling price, if neither VSOE nor TPE is available. The Company then recognizes revenue on each deliverable in accordance with its policies for product and service revenue recognition. The Company is not typically able to determine VSOE or TPE, and therefore, uses the estimated selling price to allocate revenue between the elements of an arrangement.

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.

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

unsuccessful attempts to unionize Apio's Guadalupe, California processing plant. The campaign has involved a union and over

100

former and current employees of Pacific H

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

individual arbitrations against Apio and Pacific Harvest.

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

main types of claims:

(1)

Unfair Labor Practice claims ("ULPs") before the National Labor Relations Board ("NLRB"),

(2)

discrimination/wrongful termination claims before state and federal agencies and in individual arbitrations, and

(3)

wage and hour claims as part of

two

Private Attorney General Act ("PAGA") cases in state court and in over

100

individual arbitrations.

A settlement of the ULPs among a union, Apio, and Pacific Harvest that were pending before the NLRB was approved on

December

27,

2016

for

$310,000.

Apio was responsible for half of this settlement, or

$155,000.

Concerning the discriminat

ion/wrongful termination claims and the wage and hour claims, on

February

23,

2017,

the parties agreed in principle to a class action settlement which covers all non-exempt employees of Pacific Harvest working at Apio's Guadalupe, California processing facility. This settlement remains subject to all of the plaintiffs executing the settlement agreement, and the settlement agreement being approved by the Santa Barbara County Superior Court. Under the settlement agreement, the plaintiffs will be paid

$6.0

million in

three

installments:

$2.4

million in

April

2017,

$1.8

million in

November

2017,

and

$1.8

million in

July

2018.

The Company and Pacific Harvest have each agreed to pay

one

half of the settlement.

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

million as of

November

27,

2016,

which the Company believed at that time was sufficient to resolve its share of

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

and

nine

months ended

February

26,

2017,

the Company recorded a legal settlement charge of

$2.1

million and

$2.6

million, respectively, relating to these actions. As of

February

26,

2017,

the Company had accrued

$3.2

million relating to these actions, which is included in Other accrued liabilities in the accompanying Consolidated Balance Sheet.

Recently Adopted

Accounting

Guidance

Debt Extinguishment Costs

In Augus

2016,

the

Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016

15,

Statement of Cash Flows (Topic

230)

– Classification of Certain Cash Receipts and Cash Payments

(“ASU

2016

15”).

ASU

2016

clarifies how entities should classify certain cash receipts and cash payments in the statement of cash flows and amends certain disclosure requirements of ASC

230.

ASU

2016

is intended to reduce diversity in practice with respect to

eight

types of cash flows including debt prepayment or debt extinguishment costs; proceeds from settlement of insurance claims; classification of cash receipts and payments that have aspects of more than

one

class of cash; and contingent consideration payments made after a business combination. The guidance is effective for fiscal years beginning after

December

2017,

and interim periods within those years. Early adoption is permitted, including adoption in an interim period. The Company elected to early adopt ASU

2016

effective

November

27,

2016

. The adoption had no impact on our consolidated financial statements or related disclosures. The Company paid

$233,000

of early debt extinguishment penalties during the fiscal quarter ended

November

27,

2016.

Debt

Issuance Costs

April

2015,

the FASB issued ASU

2015

03,

Interest

Imputation of Interest (Subtopic

835

30):

Simplifying the Presentation of Debt Issuance Costs

(“ASU

2015

03”).

The new guidance requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as an asset

, except in instances where proceeds from the related debt agreement have not been received.

August

2015,

the FASB issued ASU

2015

15,

Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements

(“ASU

2015

15”).

ASU

2015

amends Subtopic

835

to clarify that the

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

and ASU

2015

during its

first

fiscal quarter ended

August

28,

2016

with retrospective application to its

May

29,

2016

consolidated balance sheet. The effect of the adoption of ASU

2015

was to reclassify total debt issuance costs of

$817,000

as of

May

29,

2016

as a deduction from the related debt liabilities. Accordingly, the

May

29,

2016

consolidated balance sheet was adjusted as follows:

(1)

prepaid expenses and other current assets and total current assets were reduced by

$175

,000

and current portion of long-term debt and total current liabilities were reduced by the same;

(2)

other assets were reduced by

$642,000

and long-term debt was reduced by the same; and

(3)

total assets were reduced by

$817,000

and total liabilities were reduced by the same. There was no effect related to the adoption of ASU

2015

given the Company has historically presented line of credit debt issuance costs as an asset, and as such,

$120,00

and

$431

,000

remain as prepaid expenses and other current assets and other assets, respectively, as of

February

26,

2017

. ASU

2015

and ASU

2015

do not impact the income statement accounting for debt issuance costs; therefore, these costs will continue to be amortized to interest expense over the term of the related debt instruments. There was no effect on net income.

Stock-Based Compensation

March

2016,

the FASB issued ASU

2016

Compensation

Stock Compensation (Topic

718):

Improvements to Employee Share-Based Payment Accounting

(“ASU

2016

09”).

The new guidance changes the accounting for certain aspects of stock-based payments to employees and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity in the Company’s consolidated statements of cash flows and provides an accounting policy election to account for forfeitures as they occur. Finally, the new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable. The new standard is effective for the Company beginning

May

29,

2017,

with early adoption permitted.

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)

using

a modified retrospective application, the Company recorded unrecognized excess tax benefits of

$549

,000

as a cumulative-effect adjustment, which increased retained earnings

, and reduced deferred taxes by the same,

(2)

using

a modified retrospective application, the Company has elected to recognize forfeitures as they occur and recorded a

$200,000

increase to additional paid-in capital

, a

$126,000

reduction to retained earnings, and a

$74,000

reduction to deferred taxes to reflect the incremental stock-based compensation expense, net of the related tax impacts, that would have been recognized in prior years under the modified guidance, and

(3)

$90,000

in excess tax benefits from stock-based compensation was reclassified from cash flows from financing activities to cash flows from operating activities for the

nine

months ended

February

26,

2017

in the consolidated statements of cash flows. See Note

– Income Taxes for further information regarding additional effects related to the prospective application of excess tax benefits and tax deficiencies related to stock-based compensation on the Company’s financial statements.

Recent Accounting Guidance Not Yet Adopted

Leases

February

2016,

the FASB issued ASU

2016

02,

Leases (Topic

842)

(“ASU

2016

02”),

which requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use-assets. ASU

2016

also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The new guidance is effective for the Company beginning in the

first

quarter of fiscal year

2020

on a modified retrospective basis, with early adoption permitted. Management is currently evaluating the effect ASU

2016

will have on the Company's Consolidated Financial Statements and disclosures.

Revenue Recognition

May

2014,

the FASB issued ASU

2014

09,

which creates FASB ASC Topic

606

, Revenue from Contracts with Customers

and supersedes ASC Topic

605,

Revenue Recognition

(“ASU

2014

09”).

The guidance replaces industry-specific guidance and establishes a single

five

-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. The effective date of ASU

2014

was deferred by the issuance of ASU

2015

14,

Revenue from Contracts with Customers: Deferral of the Effective Date

(Topic

606)

one

year to make the guidance of ASU

2014

effective for annual reporting periods beginning after

December

15,

2017,

including interim periods therein. Early adoption is permitted, but not prior to the original effective date, which was for annual reporting periods beginning after

December

15,

2016.

March

2016,

the FASB issued ASU

2016

08,

Revenue from Contracts with Customers

(Topic

606)

Principal versus Agent Considerations (Reporting Revenue Gross versus Net

), which clarifies how to apply the implementation guidance on principal versus agent considerations related to the sale of goods or services to a customer as updated by ASU

2014

09.

April

2016,

the FASB issued ASU

2016

10,

Revenue from Contracts with Customers

(

Topic

606

)

Identifying Performance Obligations and Licensing,

which clarifies

two

aspects of Topic

606:

identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas, as updated by ASU

2014

09.

May

2016,

the FASB issued ASU

2016

12,

Revenue from Contracts with Customers (Topic

606):

Narrow-Scope Improvements and Practical Expedients

, which makes narrow scope amendments to Topic

606

including implementation issues on collectability, non-cash consideration and completed contracts at transition. The Company is currently assessing the future impact of this guidance on its consolidated financial statements and related disclosures and expects to adopt these updates beginning with the

first

quarter of its fiscal year

2019.

Note 2 - Investment in Non-public Company

9 Months Ended

Feb. 26, 2017

Investment Holdings [Text Block]

2.	Investment in N on-public C ompany

February

15,

2011,

Apio entered into a share purchase agreement (the “Windset Purchase Agreement”) with Windset. Pursuant to the Windset Purchase Agreement, Apio purchased from Windset

150,000

Senior A preferred shares for

$15

million and

201

common shares for

$201.

July

15,

2014,

Apio increased its investment in Windset by purchasing from the Newell Capital Corporation an additional

common shares and

51,211

junior preferred shares of Windset for

$11

million. After this purchase, the Company’s common shares represent a

26.9%

ownership interest in Windset. The Senior A preferred shares yield a cash dividend of

7.5%

annually. The dividend is payable within

days of each anniversary of the execution of the Windset Purchase Agreement. The non-voting junior preferred stock does not yield a dividend unless declared by the Board of Directors of Windset and no such dividend has been declared.

The

Shareholders’ Agreement between Apio and Windset includes a put and call option (the “Put and Call Option”), which can be exercised on or after the

sixth

anniversary of the Shareholders’ Agreement whereby Apio can exercise the put to sell its common, Senior A preferred shares, and junior preferred shares to Windset, or Windset can exercise the call to purchase those shares from Apio, in either case, at a price equal to

26.9%

of the fair market value of Windset’s common shares, plus the liquidation value of the preferred shares of

$20.1

million

($15

million for the Senior A preferred shares and

$5.1

million for the junior preferred shares). Under the terms of the arrangement with Windset, the Company is entitled to designate

one

five

members on the Board of Directors of Windset.

March

15,

2017,

the Company and Windset amended the Shareholders' Agreement by extending the put/call date to

March

31,

2022.

October

29,

2014,

Apio further increased its investment in Windset by purchasing

70,000

shares of Senior B preferred shares for

million. The Senior B preferred shares pay an annual dividend of

7.5%

on the amount outstanding at each anniversary date of the Windset Purchase Agreement. The Senior B preferred shares purchased by Apio have a put feature whereby Apio can sell back to Windset

$1.5

million of shares on the

first

anniversary, an additional

$2.75

million of shares on the

second

anniversary

, and the remaining

$2.75

million on the

third

anniversary. After the

third

anniversary, Apio

may

at any time put any or all of the shares not previously sold back to Windset. At any time on or after

February

15,

2017,

Windset has the right to call any or all of the outstanding common shares

, but at such time must also call the same proportion of Senior A preferred shares, Senior B preferred shares

, and junior preferred shares owned by Apio. Windset’s partial call provision is restricted such that a partial call cannot result in Apio holding less than

10%

of Windset’s common shares outstanding.

The investment in Windset does not qualify for equity method accounting as the investment does not meet the criteria of in-substance common stock due to returns through the annual dividend on the non-voting senior preferred shares that are not avai

lable to the common stock holders. As the put and call options require all of the various shares to be put or called in equal proportions, the Company has deemed that the investment, in substance, should be treated as a single security for purposes of accounting.

The fair value of the Company

’s investment in Windset was determined utilizing the Windset Purchase Agreement’s put/call calculation for value and a discounted cash flow model based on projections developed by Windset, and considers the put and call conversion options. These features impact the duration of the cash flows utilized to derive the estimated fair values of the investment. These

two

discounted cash flow models’ estimate for fair value are then weighted. Assumptions included in these discounted cash flow models will be evaluated quarterly based on Windset’s actual and projected operating results to determine the change in fair value.

During

each of the

three

months ended

February

26,

2017

and

February

28,

2016,

the Company recorded

$412,500

in dividend income. During each of the

nine

months ended

February

26,

2017

and

February

28,

2016,

the Company recorded

$1.2

million in dividend income. The increase in the fair market value of the Company’s investment in Windset for the

three

months ended

February

26,

2017

and

February

28,

2016

was

$700,000

and

$0,

respectively, and is included in other income in the Consolidated Statements of Comprehensive Income. The increase in the fair market value of the Company’s investment in Windset for the

nine

months ended

February

26,

2017

and

February

28,

2016

was

$700,000

and

$1.0

million, respectively, and is included in other income in the Consolidated Statements of Comprehensive Income.

Note 3 - Stock-based Compensation

9 Months Ended

Feb. 26, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

3.	Stock-Based Compensation

The Company

’s stock-based awards include stock option grants and RSUs. The Company records compensation expense for stock-based awards issued to employees and directors in exchange for services provided based on the estimated fair value of the awards on their grant dates and is recognized over the required service periods

, generally the vesting period.

The following table summarizes the stock-based compensation for options and RSUs (in thousands):

	Three Months Ended				Nine Months Ended
	February 26, 2017		February 28, 2016		February 26, 2017		February 28, 2016
Options	$	308	$	331	$	907	$	1,021
RSUs		761		553		1,935		1,560
Total stock-based compensation	$	1,069	$	884	$	2,842	$	2,581

The following table summarizes the stock-based compensation by income statement line item (in thousands):

	Three Months Ended				Nine Months Ended
	February 26, 2017		February 28, 2016		February 26, 2017		February 28, 2016
Cost of sales	$	124	$	103	$	361	$	301
Research and development		23		22		69		67
Selling, general and administrative		922		759		2,412		2,213
Total stock-based compensation	$	1,069	$	884	$	2,842	$	2,581

The estimated fair value for stock options, which determines the Company

’s calculation of stock-based compensation expense, is based on the Black-Scholes option pricing model. RSUs are valued at the closing market price of the Company’s common stock on the date of grant. The Company uses the straight

-line single option method to calculate and recognize the fair value of stock-based compensation arrangements.

As of

February

26,

2017,

there was

$5.8

million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Landec incentive stock plans. Total expense is expected to be recognized over the weighted-average period of

1.7

years for stock options and

1.6

years for restricted stock unit awards.

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Note 4 - Diluted Net Income Per Share

9 Months Ended

Feb. 26, 2017

Earnings Per Share [Text Block]

4.	Diluted Net Income Per Share

The following table sets forth the computation of diluted net income per

share (in thousands, except per share amounts):

	Three Months Ended					Nine Months Ended
	February 26, 2017		February 28, 2016			February 26, 2017		February 28, 2016
Numerator:
Net income (loss) applicable to Common Stockholders	$	3,500	$	(21,190	)	$	8,138	$	(16,370	)

Denominator:
Weighted average shares for basic net income per share		27,286		27,054			27,252		27,026
Effect of dilutive securities:
Stock options and restricted stock units		396		—			356		—
Weighted average shares for diluted net income per share		27,682		27,054			27,608		27,026

Diluted net income (loss) per share	$	0.13	$	(0.78	)	$	0.29	$	(0.61	)

For the

three

and

nine

months ended

February

26,

2017

the computation of the diluted net income per share excludes the impact of options to purchase

1.2

million and

1.4

million shares, respectively, of Common Stock as such impacts would be antidilutive for these periods.

Due to the Company

’s net loss for the

three

and

nine

months ended

February

28,

2016,

the net loss per share includes only weighted average shares outstanding and thus excludes

1.6

million and

1.5

million, respectively, of outstanding options and RSUs as such impacts would be antidilutive for these periods.

Note 5 - Income Taxes

9 Months Ended

Feb. 26, 2017

Income Tax Disclosure [Text Block]

5.	Income Taxes

The provision for income taxes for the

three

and

nine

months ended

February

26,

2017

was

$1.6

million and

$4.1

million, respectively. The effective tax rate for the

three

and

nine

months ended

February

26,

2017

was

31%

and

34%,

respectively. The effective tax rate for the

three

and

nine

months ended

February

26,

2017

was lower than the statutory federal income tax rate of

35%

primarily due to the domestic manufacturing deduction and research and development credits; partially offset by state taxes and non-deductible stock-based compensation expense.

The income tax benefit for the

three

and

nine

months ended Febr

uary

28,

2016

was

$12.5

million and

$9.8

million, respectively. The effective tax rate for the

three

and

nine

months ended

February

28,

2016

was

34%

and

37%

, respectively. The effective tax rate for the

first

nine

months of fiscal year

2016

was higher than the statutory federal income tax rate of

35%

primarily due to state taxes and non-deductible stock-based compensation expense; partially offset by the domestic manufacturing deduction and research and development credits.

Included in the effective tax rate for the

nine

months ended

February

28,

2016

is a

$12.5

million discrete tax benefit for the impairment of the GreenLine tradename.

As of

February

26,

2017

and

May

29,

2016,

the Company had unrecognized tax benefits of approximately

$918

,000

and

$842,0

00,

respectively. Included in the balance of unrecognized tax benefits as of

February

26,

2017

and

May

29,

2016

is approximately

$778

,000

and

$715,000,

respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. In the

twelve

months following

February

26,

2017,

it is reasonably possible that approximately

$300,000

of other unrecognized tax benefits

may

be recognized.

During the

nine

months ended

February

26,

2017,

excess tax benefits related to stock-based compensation of

$80

,000

were reflected in the consolidated statements of comprehensive income as a component of income tax expense as a result of the early adoption of ASU

2016

09,

specifically related to the prospective application of excess tax benefits and tax deficiencies related to stock-based compensation. See Note

1–

Organization, Basis of Presentation, and Summary of Significant Accounting Policies for further discussion regarding the adoption of ASU

2016

09.

The Company has elected to

classify interest and penalties related to uncertain tax positions as a component of its provision for income taxes. The Company has accrued an insignificant amount of interest and penalties relating to the income tax on the unrecognized tax benefits as of

February

26,

2017

and

May

29,

2016

Due to tax attribute carryforwards, the Company is subject to examination for tax years

199

forward for U.S. tax purposes. The Company is also subject to examination in various state jurisdictions for tax years

1998

forward, none of which were individually material.

Note 6 - Inventories

9 Months Ended

Feb. 26, 2017

Inventory Disclosure [Text Block]

6.	Inventories

Inventories are stated at the lower of cost

(first

-in,

first

-out method) or

net realizable value and consists of the following (in thousands):

	February 26, 2017		May 29 , 2016
Finished goods	$	10,105	$	12,165
Raw materials		10,188		9,855
Work in progress		2,980		3,515
Total	$	23,273	$	25,535

Note 7 - Debt

9 Months Ended

Feb. 26, 2017

Debt Disclosure [Text Block]

Debt

Long-term debt

, net consists of the following (in thousands):

	February 26, 2017			May 29, 2016
Term loan with JPMorgan Chase Bank (“JPMorgan”), BMO Harris Bank N,A. (“BMO”), and City National Bank; due in quarterly principal and interest payments of $1 ,25 0 beginning December 1, 2016 through September 23, 2021 with the remainder due on maturity, with interest based on the Company’s leverage ratio at a per annum rate of the Eurodollar rate plus a spread of between 1.25% and 2.25%	$	48,750		$	—
Real property loan agreement with General Electric Capital Corporation (“GE Capital”); due in monthly principal and interest payments of $133 through May 1, 2022 with interest based on a fixed rate of 4.02% per annum		—			14,167
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $175 through May 1, 2019 with interest based on a fixed rate of 4.39% per annum		—			5,904
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $95 through July 17, 2019 with interest based on a fixed rate of 3.68% per annum		—			5,558
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $56 through December 1, 2019 with interest based on a fixed rate of 3.74% per annum		—			3,375
Capital equipment loan with Bank of America (“BofA”); due in monthly principal and interest payments of $68 through June 28, 2020 with interest based on a fixed rate of 2.79% per annum		—			3,158
Real property loan agreement with GE Capital; due in monthly principal payments of $32 through March 1, 2026, plus interest payable monthly at LIBOR plus 2.25% per annum		—			7,622
Capital equipment loan with GE Capital; due in monthly principal payments of $108 through March 1, 2021, plus interest payable monthly at LIBOR plus 2.25% per annum		—			8,873
Capital equipment loan with BofA; due in monthly principal and interest payments of $75 through November 27, 2020 with interest based on a fixed rate of 2.92% per annum		—			3,940
Industrial revenue bonds (“ IRBs”) issued by Lifecore; due in annual payments through 2020 with interest at a variable rate set weekly by the bond remarketing agent (0.59% at May 29, 2016)		—			2,065
Total principal amount of long-term debt		48,750			54,662
Less: unamortized debt issuance costs		(276	)		(817	)
Total long-term debt, net of unamortized debt issuance costs		48,474			53,845
Less: current portion of long-term debt, net		(4,940	)		(7,873	)
Long-term debt, net	$	43,534		$	45,972

September

23,

2016,

the Company entered into a Credit Agreement with

JPMorgan, BMO, and City National Bank, as lenders (collectively, the “Lenders”), and JPMorgan as administrative agent, pursuant to which the Lenders provided the Company with a

$100

million revolving line of credit (the “Revolver”) and a

$50

million term loan facility (the “Term Loan”), guaranteed by each of the Company’s direct and indirect subsidiaries and secured by substantially all of the Company’s assets, with the exception of the Company’s investment in Windset.

Both the Revolver and the Term Loan mature i

five

years (on

September

23,

2021),

with the Term Loan providing for quarterly principal payments of

$1.25

million commencing

December

2016,

with the remainder due at maturity.

Interest on both the Revolver and the Term Loan is based

on either the prime rate or Eurodollar rate, at the Company’s discretion, plus a spread based on the Company’s leverage ratio (generally defined as the ratio of the Company’s total indebtedness on such date to the Company’s consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the period of

four

consecutive fiscal quarters ended on or most recently prior to such date). The spread is at a per annum rate of (i) between

0.25%

and

1.25%

if the prime rate is elected or (ii) between

1.25%

and

2.25%

if the Eurodollar rate is elected.

The Credit Agreement provides the Company the right to increase the Revolver commitments and/or the Term Loan commitments by obtaining additional commitments either from

one

or more of the Lenders or another lending institution

at an amount of up to

$75

million.

The Credit Agreement contains customary financial covenants and events of default under which the obligation could be accelerated and/or the interest rate increased. The Company was in compliance with all financial covenants as of

February

26,

2017

November

2016,

the Company entered into an interest rate swap agreement (“

Swap”) with BMO at a notional amount of

$50

million. The Swap has the effect of changing the Company’s Term Loan obligation from a variable interest rate to a fixed

-day LIBOR rate of

1.22%.

As of

February

26,

2017,

the interest rate on the Term Loan was

2.97%.

For further discussion regarding the Company’s use of derivative instruments, see the Financial Instruments section of Note

– Organization, Basis of Presentation, and Summary of Significant Accounting Policies

In connection with the Credit Agreement, the Company incurred lender and

third

-party debt issuance costs of $

897

,000,

of which

$598,000

and

$299,000

was allocated to the Revolver and Term Loan, respectively.

As of

February

26,

2017,

balance was outstanding on the Revolver.

Concurrent with the close of the Credit Agreement, all of the proceeds of the Term Loan, and

$1.5

million of the Revolver,

was used by the Company to repay all then existing debt. Accordingly, the Company recognized a loss on debt refinancing of

$1.2

million, including

$233,000

of payments for early debt extinguishment penalties, for the quarter ended

November

27,

2016,

primarily related to the write-off of unamortized debt issuance costs on the Company’s then existing debt as of

September

23,

2016.

Note 8 - Related Party

9 Months Ended

Feb. 26, 2017

8.	Related Party

The Company sells products to and earns license fees

from Windset. During the

three

months ended

February

26,

2017

and

February

28,

2016,

the Company recognized revenues of

$72

,000

and

$109,000,

respectively. During the

nine

months ended

February

26,

2017

and

February

28,

2016,

the Company recognized revenues of

$265

,000

and

$376,000,

respectively. These amounts have been included in product sales in the accompanying Consolidated Statements of Comprehensive Income. The associated receivable balances of

$150

,000

and

$523,000

are included in accounts receivable in the accompanying Consolidated Balance Sheets as of

February

26,

2017

and

May

29,

2016,

respectively.

All related party transactions are monitored quarterly by the

Company and approved by the Audit Committee of the Board of Directors.

Note 9 - Stockholders' Equity

9 Months Ended

Feb. 26, 2017

Stockholders' Equity Note Disclosure [Text Block]

9.	Stockholders ’ Equity

During

the

three

months ended

February

26,

2017,

the Company granted options to purchase

60,000

shares of common stock and awarded

20,000

RSUs. During the

nine

months ended

February

26,

2017,

the Company granted options to purchase

240,000

shares of common stock and awarded

130,522

RSUs.

As of

February

26,

2017,

the Company has reserved

2.5

million shares of Common Stock for future issuance under its current and former equity plans.

July

14,

2010,

the Company announced that the Board of Directors of the Company had approved the establishment of a stock repurchase plan authorizing the repurchase of up to

$10

million of the Company

’s common stock. The Company

may

repurchase its common stock from time to time in open market purchases or in privately negotiated transactions. The timing and actual number of shares repurchased is at the discretion of management of the Company and will depend on a variety of factors, including stock price, corporate and regulatory requirements, market conditions, the relative attractiveness of other capital deployment opportunities and other corporate priorities. The stock repurchase program does not obligate Landec to acquire any amount of its common stock and the program

may

be modified, suspended or terminated at any time at the Company's discretion without prior notice. During the fiscal year ended

May

29,

2016

and the

three

and

nine

months ended

February

26,

2017,

the Company did

not

purchase any shares on the open market.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

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Note 10 - Comprehensive Income

9 Months Ended

Feb. 26, 2017

Comprehensive Income (Loss) Note [Text Block]

10.	Comprehensive Income

Comprehensive income consists of

two

components, net income and Other Comprehensive Income (“

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 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 29, 2016	$	—
Other comprehensive income before reclassifications , net of tax effect		430
Amounts reclassified from OCI		(—	)
Other comprehensive income , net		430
Balance as of February 26, 2017	$	430

The Company does not expect any transactions or other events to occur that would result in the reclassification of any

significant gains into earnings in the next

months.

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

Note 11 - Business Segment Reporting

9 Months Ended

Feb. 26, 2017

Segment Reporting Disclosure [Text Block]

Business Segment Reporting

The Company

manages its business operations through

three

strategic business units. Based upon the information reported to the chief operating decision maker, who is the Chief Executive Officer, the Company has the following reportable segments: the Packaged Fresh Vegetables segment, the Food Export segment

, and the Biomaterials segment.

The Packaged Fresh Vegetables segment markets and packs specialty packaged whole and fresh-cut vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club store

, and food services industries. In addition, the Packaged Fresh Vegetables segment sells BreatheWay packaging to partners for fruit and vegetable products. The Food Export segment consists of revenues generated from the purchase and sale of primarily whole commodity fruit and vegetable products primarily to Asia. The Biomaterials segment sells products utilizing hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellular matrix of connective tissues in both animals and humans, and non-HA products for medical use primarily in the Ophthalmic, Orthopedic

, and other markets. Corporate licenses Landec’s Intelimer polymers for agricultural products, personal care products

, and other industrial products. The Corporate segment also includes general and administrative expenses, non-Packaged Fresh Vegetables and non-Biomaterials interest income and income tax expenses. All of the assets of the Company are located within the United States of America. The Company’s international sales were as follows (in millions):

	Three Months Ended				Nine Months Ended
	February 26, 2017		February 28, 2016		February 26, 2017		February 28, 2016
Canada	$	16.6	$	20.3	$	50.6	$	60.6
Taiwan	$	3.0	$	1.2	$	27.9	$	26.6
Belgium	$	12.9	$	6.2	$	19.8	$	7.3
China	$	0.4	$	0.3	$	11.8	$	7.6
Indonesia	$	1.5	$	2.4	$	6.6	$	6.3
Japan	$	1.3	$	1.0	$	6.2	$	4.6
Philippines	$	0.6	$	0.5	$	1.9	$	2.1
All Other Countries	$	2.8	$	3.4	$	8.5	$	10.5

Operations by business segment consisted of the following

(in thousands):

Three Months Ended February 26, 2017	Packaged Fresh Vegetables			Food Export			Biomaterials		Corporate			Total
Net sales	$	105,447		$	7,276		$	23,532	$	313		$	136,568
International sales	$	16,802		$	7,276		$	15,024	$	—		$	39,102
Gross profit	$	10,114		$	558		$	12,581	$	179		$	23,432
Net income (loss)	$	(2,492	)	$	(116	)	$	7,135	$	(1,027	)	$	3,500
Depreciation and amortization	$	1,862		$	—		$	794	$	61		$	2,717
Dividend income	$	413		$	—		$	—	$	—		$	413
Interest income	$	8		$	—		$	—	$	—		$	8
Interest expense, net	$	(77	)	$	—		$	—	$	477		$	400
Income tax expense (benefit)	$	(594	)	$	(33	)	$	2,031	$	152		$	1,556

Three Mont hs Ended February 28, 2016
Net sales	$	107,348		$	6,389		$	15,701	$	552		$	129,990
International sales	$	20,343		$	6,389		$	8,576	$	—		$	35,308
Gross profit	$	4,334		$	521		$	7,618	$	458		$	12,931
Net income (loss)	$	(36,963	)	$	(27	)	$	3,450	$	12,350		$	(21,190	)
Depreciation and amortization	$	1,455		$	—		$	656	$	36		$	2,147
Dividend income	$	413		$	—		$	—	$	—		$	413
Interest income	$	17		$	—		$	—	$	—		$	17
Interest expense, net	$	427		$	—		$	57	$	—		$	484
Income tax expense (benefit)	$	(905	)	$	(189	)	$	973	$	(12,389	)	$	(12,510	)

Nine Month s Ended February 26, 2017
Net sales	$	299,370		$	56,316		$	47,795	$	1,346		$	404,827
International sales	$	51,073		$	56,316		$	25,896	$	—		$	133,285
Gross profit	$	36,522		$	3,436		$	22,640	$	931		$	63,529
Net income (loss)	$	(419	)	$	812		$	9,690	$	(1,945	)	$	8,138
Depreciation and amortization	$	5,474		$	3		$	2,225	$	125		$	7,827
Dividend income	$	1,238		$	—		$	—	$	—		$	1,238
Interest income	$	15		$	—		$	—	$	—		$	15
Interest expense, net	$	594		$	—		$	13	$	825		$	1,432
Income tax expense (benefit)	$	(81	)	$	229		$	2,769	$	1,221		$	4,138

Nine Months Ended February 28, 2016
Net sales	$	318,218		$	50,873		$	34,748	$	1,947		$	405,786
International sales	$	60,948		$	50,873		$	13,735	$	—		$	125,556
Gross profit	$	27,565		$	3,200		$	15,713	$	1,695		$	48,173
Net income (loss)	$	(34,361	)	$	1,250		$	4,911	$	11,830		$	(16,370	)
Depreciation and amortization	$	4,470		$	1		$	1,902	$	113		$	6,486
Dividend income	$	1,238		$	—		$	—	$	—		$	1,238
Interest income	$	39		$	—		$	25	$	—		$	64
Interest expense, net	$	1,304		$	—		$	121	$	—		$	1,425
Income tax expense (benefit)	$	—		$	—		$	1,385	$	(11,135	)	$	(9,750	)

During

the

nine

months ended

February

26,

2017

and

February

28,

2016,

sales to the Company’s top

five

customers accounted for

43%

and

45%,

respectively, of sales. The Company’s top

two

customers, Costco Wholesale Corporation and Wal-Mart Stores, Inc., from the Packaged Fresh Vegetables segment accounted for

17%

and

14%

of revenues, respectively, for the

nine

months ended

February

26,

2017

, and

20%

and

12%

respectively, for the

nine

months ended

February

28,

2016.

The Company expects that, for the foreseeable future, a limited number of customers

may

continue to account for a significant portion of its net sales

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Note 12 - Subsequent Events

9 Months Ended

Feb. 26, 2017

Subsequent Events [Text Block]

12.	Subsequent Events

March

2017,

the Company

purchased substantially all of the assets of O Olive Oil, Inc. (“O Olive”) for

$2.5

million in cash plus contingent consideration of up to

$7.5

million over the next

three

years based upon O Olive achieving certain EBITDA targets. O Olive, founded in

1995,

is based in Petaluma, California, and is the premier producer of California specialty olive oils and wine vinegars. Its products are sold in natural food, conventional grocery and mass retail stores, primarily in the United States and Canada.

Significant Accounting Policies (Policies)

9 Months Ended

Feb. 26, 2017

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited conso

-Q and Article

February

26,

2017

-K for the fiscal year ended

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

months ended

February

26,

2017

are not necessarily indicative of the results that

may

be expected for an entire fiscal year because there is some seasonality in Apio’s food business, particularly, Apio’s export business

, and the order patterns of Lifecore’s customers which

may

lead to significant fluctuations in Landec’s quarterly results of operations.

Consolidation, Policy [Policy Text Block]

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

, or b) as a group the holders of the equity investment at risk lack any

one

of the following

three

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with

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

differ from management’s estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

The Company records all highly liquid securities with

three

month

Debt Issuance Costs [Policy Text Block]

Debt Issuance Costs

The Company

records its line of credit debt issuance costs as an asset, and as such,

$120,000

and

$431

,000

was recorded as prepaid expenses and other current assets and other assets, respectively, as of

February

26,

2017.

The Company records its term debt issuance costs as a contra-liability, and as such,

$60,000

and

$216,000

was recorded as current portion of long-term debt and long-term debt, respectively, as of

February

26,

2017.

See Note

– Debt of the Notes to Consolidated Financial Statements for further information.

Fair Value of Financial Instruments, Policy [Policy Text Block]

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 additional information refer to Note

– Comprehensive Income

Investment In Non Public Companies [Policy Text Block]

Investment in Non-Public Company

February

15,

2011,

Apio purchased

150,000

senior preferred shares for

$15

million and

201

common shares for

$201

that were issued by Windset Holdings

2010

Ltd., a Canadian corporation

(“Windset”). On

July

15,

2014,

Apio increased its investment in Windset by purchasing an additional

common shares and

51,211

junior preferred shares of Windset for

$11

million. On

October

29,

2014,

Apio purchased an additional

70,000

senior preferred shares of Windset for

million. These investments are reported as an investment in non-public company, fair value, in the accompanying Consolidated Balance Sheets as of

February

26,

2017

and

May

29,

2016.

The Company has elected to account for its investment in Windset under the fair value option. See Note

– Investment in Non-public Company for further information

Goodwill and Intangible Assets, Policy [Policy Text Block]

Intangible Assets

The Company

’s intangible assets are comprised of customer relationships with a finite estimated useful life of

twelve

thirteen

years

, 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

35.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

See Note

– Investment in Non-public Company for further information. The Company has not elected the fair value option for any of its other eligible financial assets or liabilities.

The accounting guidance established a

three

-tier hierarchy for fair va

lue measurements, which prioritizes the inputs used in measuring fair value as follows:

Level

– observable inputs such as quoted prices for identical instruments in active markets.

Level

– inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data.

Level

– 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

and

May

29,

2016,

the Company held certain assets that are required to be measured at fair value on a recurring basis, including its interest rate swap and its minority interest investment in Windset

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

measurement and is recorded as other assets in the Consolidated Balance Sheet.

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

measurement investment. The change in the fair value of the Company’s investment in Windset for the

nine

months ended

February

26,

2017

was due to the Company’s

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

	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

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, Policy [Policy Text Block]

Revenue Recognition

See Note

– Business Segment Reporting, for a discussion about the Company’s

four

business segments; namely, Packaged Fresh Vegetables, Food Export, Biomaterials, and Corporate.

ible amounts, product returns, and discounts based on specific identification and historical losses.

Apio

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%

ownership position

Apio

third

parties because it takes title to the product while in transit.

Lifecore

’s Biomaterials business principally generates revenue through the sale of products containing HA. Lifecore primarily sells products to customers in

three

medical areas:

(1)

Ophthalmic, which represented approximately

55%

of Lifecore’s revenues in fiscal year

2016,

(2)

Orthopedic, which represented approximately

20%

of Lifecore’s revenues in fiscal year

2016

, and

(3)

Other/Non-HA products, which represented approximately

25%

of Lifecore’s revenues in fiscal year

2016.

The vast majority of Lifecore’s revenues are recognized upon shipment.

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

third

The Company limits the amount of revenue recognition for delivered elements to the amount that is not contingent o

For licensing revenue, the initial license fees are deferred and amortized to revenue over the period of the agreement when a contract exists,

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 Costs, Policy [Policy Text Block]

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

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

unsuccessful attempts to unionize Apio's Guadalupe, California processing plant. The campaign has involved a union and over

100

former and current employees of Pacific H

100

individual arbitrations against Apio and Pacific Harvest.

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

main types of claims:

(1)

Unfair Labor Practice claims ("ULPs") before the National Labor Relations Board ("NLRB"),

(2)

discrimination/wrongful termination claims before state and federal agencies and in individual arbitrations, and

(3)

wage and hour claims as part of

two

Private Attorney General Act ("PAGA") cases in state court and in over

100

individual arbitrations.

A settlement of the ULPs among a union, Apio, and Pacific Harvest that were pending before the NLRB was approved on

December

27,

2016

for

$310,000.

Apio was responsible for half of this settlement, or

$155,000.

Concerning the discriminat

ion/wrongful termination claims and the wage and hour claims, on

February

23,

2017,

$6.0

million in

three

installments:

$2.4

million in

April

2017,

$1.8

million in

November

2017,

and

$1.8

million in

July

2018.

The Company and Pacific Harvest have each agreed to pay

one

half of the settlement.

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

million as of

November

27,

2016,

which the Company believed at that time was sufficient to resolve its share of

During the

three

and

nine

months ended

February

26,

2017,

the Company recorded a legal settlement charge of

$2.1

million and

$2.6

million, respectively, relating to these actions. As of

February

26,

2017,

the Company had accrued

$3.2

million relating to these actions, which is included in Other accrued liabilities in the accompanying Consolidated Balance Sheet.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted

Accounting

Guidance

Debt Extinguishment Costs

In Augus

2016,

the

Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016

15,

Statement of Cash Flows (Topic

230)

– Classification of Certain Cash Receipts and Cash Payments

(“ASU

2016

15”).

ASU

2016

clarifies how entities should classify certain cash receipts and cash payments in the statement of cash flows and amends certain disclosure requirements of ASC

230.

ASU

2016

is intended to reduce diversity in practice with respect to

eight

types of cash flows including debt prepayment or debt extinguishment costs; proceeds from settlement of insurance claims; classification of cash receipts and payments that have aspects of more than

one

class of cash; and contingent consideration payments made after a business combination. The guidance is effective for fiscal years beginning after

December

2017,

and interim periods within those years. Early adoption is permitted, including adoption in an interim period. The Company elected to early adopt ASU

2016

effective

November

27,

2016

. The adoption had no impact on our consolidated financial statements or related disclosures. The Company paid

$233,000

of early debt extinguishment penalties during the fiscal quarter ended

November

27,

2016.

Debt

Issuance Costs

April

2015,

the FASB issued ASU

2015

03,

Interest

Imputation of Interest (Subtopic

835

30):

Simplifying the Presentation of Debt Issuance Costs

(“ASU

2015

03”).

, except in instances where proceeds from the related debt agreement have not been received.

August

2015,

the FASB issued ASU

2015

15,

Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements

(“ASU

2015

15”).

ASU

2015

amends Subtopic

835

to clarify that the

The Company adopted ASU

2015

and ASU

2015

during its

first

fiscal quarter ended

August

28,

2016

with retrospective application to its

May

29,

2016

consolidated balance sheet. The effect of the adoption of ASU

2015

was to reclassify total debt issuance costs of

$817,000

as of

May

29,

2016

as a deduction from the related debt liabilities. Accordingly, the

May

29,

2016

consolidated balance sheet was adjusted as follows:

(1)

prepaid expenses and other current assets and total current assets were reduced by

$175

,000

and current portion of long-term debt and total current liabilities were reduced by the same;

(2)

other assets were reduced by

$642,000

and long-term debt was reduced by the same; and

(3)

total assets were reduced by

$817,000

and total liabilities were reduced by the same. There was no effect related to the adoption of ASU

2015

given the Company has historically presented line of credit debt issuance costs as an asset, and as such,

$120,00

and

$431

,000

remain as prepaid expenses and other current assets and other assets, respectively, as of

February

26,

2017

. ASU

2015

and ASU

2015

Stock-Based Compensation

March

2016,

the FASB issued ASU

2016

Compensation

Stock Compensation (Topic

718):

Improvements to Employee Share-Based Payment Accounting

(“ASU

2016

09”).

May

29,

2017,

with early adoption permitted.

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)

using

a modified retrospective application, the Company recorded unrecognized excess tax benefits of

$549

,000

as a cumulative-effect adjustment, which increased retained earnings

, and reduced deferred taxes by the same,

(2)

using

a modified retrospective application, the Company has elected to recognize forfeitures as they occur and recorded a

$200,000

increase to additional paid-in capital

, a

$126,000

reduction to retained earnings, and a

$74,000

(3)

$90,000

in excess tax benefits from stock-based compensation was reclassified from cash flows from financing activities to cash flows from operating activities for the

nine

months ended

February

26,

2017

in the consolidated statements of cash flows. See Note

Recent Accounting Guidance Not Yet Adopted

Leases

February

2016,

the FASB issued ASU

2016

02,

Leases (Topic

842)

(“ASU

2016

02”),

which requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use-assets. ASU

2016

first

quarter of fiscal year

2020

on a modified retrospective basis, with early adoption permitted. Management is currently evaluating the effect ASU

2016

will have on the Company's Consolidated Financial Statements and disclosures.

Revenue Recognition

May

2014,

the FASB issued ASU

2014

09,

which creates FASB ASC Topic

606

, Revenue from Contracts with Customers

and supersedes ASC Topic

605,

Revenue Recognition

(“ASU

2014

09”).

The guidance replaces industry-specific guidance and establishes a single

five

2014

was deferred by the issuance of ASU

2015

14,

Revenue from Contracts with Customers: Deferral of the Effective Date

(Topic

606)

one

year to make the guidance of ASU

2014

effective for annual reporting periods beginning after

December

15,

2017,

including interim periods therein. Early adoption is permitted, but not prior to the original effective date, which was for annual reporting periods beginning after

December

15,

2016.

March

2016,

the FASB issued ASU

2016

08,

Revenue from Contracts with Customers

(Topic

606)

Principal versus Agent Considerations (Reporting Revenue Gross versus Net

), which clarifies how to apply the implementation guidance on principal versus agent considerations related to the sale of goods or services to a customer as updated by ASU

2014

09.

April

2016,

the FASB issued ASU

2016

10,

Revenue from Contracts with Customers

(

Topic

606

)

Identifying Performance Obligations and Licensing,

which clarifies

two

aspects of Topic

606:

identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas, as updated by ASU

2014

09.

May

2016,

the FASB issued ASU

2016

12,

Revenue from Contracts with Customers (Topic

606):

Narrow-Scope Improvements and Practical Expedients

, which makes narrow scope amendments to Topic

606

first

quarter of its fiscal year

2019.

Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Feb. 26, 2017

Schedule of Effect of Significant Unobservable Inputs for Investment [Table Text Block]

	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%

Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block]

	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	)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	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

Revenue Recognition, Multiple-deliverable Arrangements [Table Text Block]

	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

Note 3 - Stock-based Compensation (Tables)

9 Months Ended

Feb. 26, 2017

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended				Nine Months Ended
	February 26, 2017		February 28, 2016		February 26, 2017		February 28, 2016
Options	$	308	$	331	$	907	$	1,021
RSUs		761		553		1,935		1,560
Total stock-based compensation	$	1,069	$	884	$	2,842	$	2,581

	Three Months Ended				Nine Months Ended
	February 26, 2017		February 28, 2016		February 26, 2017		February 28, 2016
Cost of sales	$	124	$	103	$	361	$	301
Research and development		23		22		69		67
Selling, general and administrative		922		759		2,412		2,213
Total stock-based compensation	$	1,069	$	884	$	2,842	$	2,581

Note 4 - Diluted Net Income Per Share (Tables)

9 Months Ended

Feb. 26, 2017

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended					Nine Months Ended
	February 26, 2017		February 28, 2016			February 26, 2017		February 28, 2016
Numerator:
Net income (loss) applicable to Common Stockholders	$	3,500	$	(21,190	)	$	8,138	$	(16,370	)

Denominator:
Weighted average shares for basic net income per share		27,286		27,054			27,252		27,026
Effect of dilutive securities:
Stock options and restricted stock units		396		—			356		—
Weighted average shares for diluted net income per share		27,682		27,054			27,608		27,026

Diluted net income (loss) per share	$	0.13	$	(0.78	)	$	0.29	$	(0.61	)

Note 6 - Inventories (Tables)

9 Months Ended

Feb. 26, 2017

Schedule of Inventory, Current [Table Text Block]

	February 26, 2017		May 29 , 2016
Finished goods	$	10,105	$	12,165
Raw materials		10,188		9,855
Work in progress		2,980		3,515
Total	$	23,273	$	25,535

Note 7 - Debt (Tables)

9 Months Ended

Feb. 26, 2017

Schedule of Long-term Debt Instruments [Table Text Block]

	February 26, 2017			May 29, 2016
Term loan with JPMorgan Chase Bank (“JPMorgan”), BMO Harris Bank N,A. (“BMO”), and City National Bank; due in quarterly principal and interest payments of $1 ,25 0 beginning December 1, 2016 through September 23, 2021 with the remainder due on maturity, with interest based on the Company’s leverage ratio at a per annum rate of the Eurodollar rate plus a spread of between 1.25% and 2.25%	$	48,750		$	—
Real property loan agreement with General Electric Capital Corporation (“GE Capital”); due in monthly principal and interest payments of $133 through May 1, 2022 with interest based on a fixed rate of 4.02% per annum		—			14,167
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $175 through May 1, 2019 with interest based on a fixed rate of 4.39% per annum		—			5,904
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $95 through July 17, 2019 with interest based on a fixed rate of 3.68% per annum		—			5,558
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $56 through December 1, 2019 with interest based on a fixed rate of 3.74% per annum		—			3,375
Capital equipment loan with Bank of America (“BofA”); due in monthly principal and interest payments of $68 through June 28, 2020 with interest based on a fixed rate of 2.79% per annum		—			3,158
Real property loan agreement with GE Capital; due in monthly principal payments of $32 through March 1, 2026, plus interest payable monthly at LIBOR plus 2.25% per annum		—			7,622
Capital equipment loan with GE Capital; due in monthly principal payments of $108 through March 1, 2021, plus interest payable monthly at LIBOR plus 2.25% per annum		—			8,873
Capital equipment loan with BofA; due in monthly principal and interest payments of $75 through November 27, 2020 with interest based on a fixed rate of 2.92% per annum		—			3,940
Industrial revenue bonds (“ IRBs”) issued by Lifecore; due in annual payments through 2020 with interest at a variable rate set weekly by the bond remarketing agent (0.59% at May 29, 2016)		—			2,065
Total principal amount of long-term debt		48,750			54,662
Less: unamortized debt issuance costs		(276	)		(817	)
Total long-term debt, net of unamortized debt issuance costs		48,474			53,845
Less: current portion of long-term debt, net		(4,940	)		(7,873	)
Long-term debt, net	$	43,534		$	45,972

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.5-02.22)
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-SubTopic 470
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Note 10 - Comprehensive Income (Tables)

9 Months Ended

Feb. 26, 2017

Comprehensive Income (Loss) [Table Text Block]

	Unrealized Gains on Cash Flow Hedge
Balance as of May 29, 2016	$	—
Other comprehensive income before reclassifications , net of tax effect		430
Amounts reclassified from OCI		(—	)
Other comprehensive income , net		430
Balance as of February 26, 2017	$	430

Note 11 - Business Segment Reporting (Tables)

9 Months Ended

Feb. 26, 2017

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Three Months Ended				Nine Months Ended
	February 26, 2017		February 28, 2016		February 26, 2017		February 28, 2016
Canada	$	16.6	$	20.3	$	50.6	$	60.6
Taiwan	$	3.0	$	1.2	$	27.9	$	26.6
Belgium	$	12.9	$	6.2	$	19.8	$	7.3
China	$	0.4	$	0.3	$	11.8	$	7.6
Indonesia	$	1.5	$	2.4	$	6.6	$	6.3
Japan	$	1.3	$	1.0	$	6.2	$	4.6
Philippines	$	0.6	$	0.5	$	1.9	$	2.1
All Other Countries	$	2.8	$	3.4	$	8.5	$	10.5

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Three Months Ended February 26, 2017	Packaged Fresh Vegetables			Food Export			Biomaterials		Corporate			Total
Net sales	$	105,447		$	7,276		$	23,532	$	313		$	136,568
International sales	$	16,802		$	7,276		$	15,024	$	—		$	39,102
Gross profit	$	10,114		$	558		$	12,581	$	179		$	23,432
Net income (loss)	$	(2,492	)	$	(116	)	$	7,135	$	(1,027	)	$	3,500
Depreciation and amortization	$	1,862		$	—		$	794	$	61		$	2,717
Dividend income	$	413		$	—		$	—	$	—		$	413
Interest income	$	8		$	—		$	—	$	—		$	8
Interest expense, net	$	(77	)	$	—		$	—	$	477		$	400
Income tax expense (benefit)	$	(594	)	$	(33	)	$	2,031	$	152		$	1,556

Three Mont hs Ended February 28, 2016
Net sales	$	107,348		$	6,389		$	15,701	$	552		$	129,990
International sales	$	20,343		$	6,389		$	8,576	$	—		$	35,308
Gross profit	$	4,334		$	521		$	7,618	$	458		$	12,931
Net income (loss)	$	(36,963	)	$	(27	)	$	3,450	$	12,350		$	(21,190	)
Depreciation and amortization	$	1,455		$	—		$	656	$	36		$	2,147
Dividend income	$	413		$	—		$	—	$	—		$	413
Interest income	$	17		$	—		$	—	$	—		$	17
Interest expense, net	$	427		$	—		$	57	$	—		$	484
Income tax expense (benefit)	$	(905	)	$	(189	)	$	973	$	(12,389	)	$	(12,510	)

Nine Month s Ended February 26, 2017
Net sales	$	299,370		$	56,316		$	47,795	$	1,346		$	404,827
International sales	$	51,073		$	56,316		$	25,896	$	—		$	133,285
Gross profit	$	36,522		$	3,436		$	22,640	$	931		$	63,529
Net income (loss)	$	(419	)	$	812		$	9,690	$	(1,945	)	$	8,138
Depreciation and amortization	$	5,474		$	3		$	2,225	$	125		$	7,827
Dividend income	$	1,238		$	—		$	—	$	—		$	1,238
Interest income	$	15		$	—		$	—	$	—		$	15
Interest expense, net	$	594		$	—		$	13	$	825		$	1,432
Income tax expense (benefit)	$	(81	)	$	229		$	2,769	$	1,221		$	4,138

Nine Months Ended February 28, 2016
Net sales	$	318,218		$	50,873		$	34,748	$	1,947		$	405,786
International sales	$	60,948		$	50,873		$	13,735	$	—		$	125,556
Gross profit	$	27,565		$	3,200		$	15,713	$	1,695		$	48,173
Net income (loss)	$	(34,361	)	$	1,250		$	4,911	$	11,830		$	(16,370	)
Depreciation and amortization	$	4,470		$	1		$	1,902	$	113		$	6,486
Dividend income	$	1,238		$	—		$	—	$	—		$	1,238
Interest income	$	39		$	—		$	25	$	—		$	64
Interest expense, net	$	1,304		$	—		$	121	$	—		$	1,425
Income tax expense (benefit)	$	—		$	—		$	1,385	$	(11,135	)	$	(9,750	)

Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Details Textual) - USD ($)

1 Months Ended

3 Months Ended

9 Months Ended

12 Months Ended

Jul. 15, 2014

Jul. 31, 2018

Nov. 30, 2017

Apr. 30, 2017

Feb. 26, 2017

Oct. 29, 2014

Feb. 15, 2011

Feb. 26, 2017

Nov. 27, 2016

Aug. 28, 2016

Feb. 26, 2017

Feb. 28, 2016

^[1]

May 29, 2016

May 30, 2016

Number of Proprietary Platforms

Debt Issuance Costs, Current, Net

$ 60,000

Debt Issuance Costs, Noncurrent, Net

216,000

Loss Contingency, Loss in Period

2,100,000

2,600,000

Payments of Debt Extinguishment Costs

$ 233,000

233,000

Cumulative Effect of New Accounting Principle in Period of Adoption

^[2]

$ 623,000

623,000

Reclassification of Debt Issuance Costs from Assets to Reduction in Liabilities [Member] | May 29, 2016 [Member]

Reclassification of Debt Issuance Costs from Other Current Assets to Reduction in Current Portion of Long-term Debt [Member] | May 29, 2016 [Member]

$ 817,000

Reclassification of Debt Issuance Costs from Other Noncurrent Assets to Reduction in Long-term Debt [Member] | May 29, 2016 [Member]

175,000

Reclassifiction of Stock-based Compensation Excess Tax Benefits from Financing Activities to Operating Activities [Member]

$ 642,000

Sales Revenue, Goods, Net [Member] | Product Concentration Risk [Member] | Ophthalmic [Member] | HA Based Biomaterials [Member]

$ 90,000

Concentration Risk, Percentage

55.00%

Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | Orthopedic [Member] | HA Based Biomaterials [Member]

Concentration Risk, Percentage

20.00%

Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | Other/Non-HA [Member] | HA Based Biomaterials [Member]

Concentration Risk, Percentage

25.00%

Windset [Member]

Investment Ownership Percentage

26.90%

Customer Relationships [Member] | Minimum [Member]

Finite-Lived Intangible Asset, Useful Life

12 years

Customer Relationships [Member] | Maximum [Member]

Finite-Lived Intangible Asset, Useful Life

13 years

Retained Earnings [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

^[2]

$ 423,000

Retained Earnings [Member] | Adjustment for Unrecognized Excess Tax Benefits [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

$ 549,000

Retained Earnings [Member] | Adjustment for Forfeitures Treatment [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

(126,000)

Additional Paid-in Capital [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

^[2]

200,000

Additional Paid-in Capital [Member] | Adjustment for Forfeitures Treatment [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

200,000

Windset [Member]

Investment Ownership Percentage

26.90%

Apio [Member]

Estimated Litigation Liability

1,300,000

$ 1,300,000

Apio [Member] | Civil and Administrative Actions [Member]

Payments for Legal Settlements

$ 155,000

Apio [Member] | Windset [Member]

Investment Ownership Percentage

$ 11,000,000

60.00%

Apio [Member] | Windset [Member] | Common Stock [Member]

Investment In Non Public Company Shares

201

Apio [Member] | Windset [Member] | Senior B Preferred Stock [Member]

$ 201

Investment In Non Public Company Shares

70,000

150,000

Apio [Member] | Windset [Member] | Junior Preferred Shares [Member]

$ 7,000,000

$ 15,000,000

Investment In Non Public Company Shares

51,211

The Reporting Entity and Labor Contractor [Member] | Civil and Administrative Actions [Member]

$ 11,000,000

Payments for Legal Settlements

$ 310,000

The Reporting Entity and Labor Contractor [Member] | Civil and Administrative Actions [Member] | Scenario, Forecast [Member]

Payments for Legal Settlements

$ 1,800,000

$ 2,400,000

Prepaid Expenses and Other Current Assets [Member]

Debt Issuance Costs, Line of Credit Arrangements, Net

120,000

$ 120,000

Other Assets [Member]

Debt Issuance Costs, Line of Credit Arrangements, Net

431,000

Other Accrued Liabilities [Member]

Estimated Litigation Liability

$ 3,200,000

Deferred Taxes [Member] | Adjustment for Forfeitures Treatment [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

$ (74,000)

[1]	See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for a discussion of accounting principles adopted during the period.
[2]	See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for a discussion of accounting guidance adopted during the period.

Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies - Significant Unobservable Inputs Used in Discounted Cash Flow Models (Details)	9 Months Ended	12 Months Ended
	Feb. 26, 2017	May 29, 2016
Revenue growth rates	4.00%	4.00%
Expense growth rates	4.00%	4.00%
Income tax rates	15.00%	15.00%
Discount rates	12.00%	12.50%

Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies - Assumptions Used in Discounted Cash Flow Models (Details) $ in Millions	Feb. 26, 2017 USD ($)
10% increase in revenue growth rates	$ 7.2
10% increase in expense growth rates	(2.1)
10% increase in income tax rates	(0.4)
10% increase in discount rates	$ (4.3)

Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies - Fair Value of Assets and Liabilities (Details) - USD ($)
$ in Thousands

Feb. 26, 2017

May 29, 2016

Fair Value, Inputs, Level 1 [Member]

$ 63,400

$ 62,700

^[1]

Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]

Interest rate swap (1)

^[2]

Fair Value, Inputs, Level 2 [Member]

Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]

681

Interest rate swap (1)

^[2]

681

Fair Value, Inputs, Level 3 [Member]

63,400

62,700

Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]

63,400

62,700

Interest rate swap (1)

^[2]

[1]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.
[2]	Recorded in Other assets.

Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies - Revenue Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Product sales	$ 136,568	$ 129,990	$ 404,827	$ 405,786
Revenue Recorded Upon Shipment [Member]
Product sales	125,765	118,789	339,917	341,914
Revenue Recorded Upon Acceptance in Foreign Port [Member]
Product sales	7,276	6,389	56,316	50,873
Revenue from Multiple Element Arrangements [Member]
Product sales	2,624	4,025	5,892	9,672
Revenue from License Fees, R&D Contracts and Royalties/Profit Sharing [Member]
Product sales	$ 903	$ 787	$ 2,702	$ 3,327

Note 2 - Investment in Non-public Company (Details Textual) - USD ($)			1 Months Ended		3 Months Ended		9 Months Ended
	Jul. 15, 2014	Jul. 15, 2014	Oct. 29, 2014	Feb. 15, 2011	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Investment Income, Dividend					$ 413,000	$ 413,000	$ 1,238,000	$ 1,238,000
Senior A Preferred Stock [Member]
Preferred Stock, Dividend Rate, Percentage		7.50%
Windset [Member]
Investment Ownership Percentage	26.90%	26.90%
Investment Income, Dividend					412,500	412,500	1,200,000	1,200,000
Change In Market Value Of Investment In Company					$ 700,000	$ 0	$ 700,000	$ 1,000,000
Windset [Member] \| Apio [Member]
Payments to Acquire Investments	$ 11,000,000
Investment Ownership Percentage					60.00%		60.00%
Preferred Stock, Liquidation Preference, Value					$ 20,100,000		$ 20,100,000
Windset [Member] \| Apio [Member] \| Senior A Preferred Stock [Member]
Investment In Non Public Company Shares				150,000
Payments to Acquire Investments				$ 15,000,000
Preferred Stock, Liquidation Preference, Value					15,000,000		15,000,000
Windset [Member] \| Apio [Member] \| Common Stock [Member]
Investment In Non Public Company Shares	68	68		201
Payments to Acquire Investments				$ 201
Windset [Member] \| Apio [Member] \| Junior Preferred Shares [Member]
Investment In Non Public Company Shares	51,211	51,211
Preferred Stock, Liquidation Preference, Value					$ 5,100,000		$ 5,100,000
Windset [Member] \| Apio [Member] \| Senior B Preferred Stock [Member]
Investment In Non Public Company Shares			70,000
Payments to Acquire Investments			$ 7,000,000
Preferred Stock, Dividend Rate, Percentage			7.50%
Windset [Member] \| Apio [Member] \| Senior B Preferred Stock [Member] \| First Anniversary [Member]
Investments, Value of Shares with Put Option			$ 1,500,000
Windset [Member] \| Apio [Member] \| Senior B Preferred Stock [Member] \| Second Anniversary [Member]
Investments, Value of Shares with Put Option			2,750,000
Windset [Member] \| Apio [Member] \| Senior B Preferred Stock [Member] \| Third Anniversary [Member]
Investments, Value of Shares with Put Option			$ 2,750,000

Note 3 - Stock-based Compensation (Details Textual) $ in Millions	9 Months Ended
	Feb. 26, 2017 USD ($)
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 5.8
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 255 days
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 219 days

Note 3 - Stock-based Compensation - Summary of Stock-based Compensation by Income Statement Line Item (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Stock-based Compensation Expense	$ 1,069	$ 884	$ 2,842	$ 2,581
Cost of Sales [Member]
Stock-based Compensation Expense	124	103	361	301
Research and Development Expense [Member]
Stock-based Compensation Expense	23	22	69	67
Selling, General and Administrative Expenses [Member]
Stock-based Compensation Expense	922	759	2,412	2,213
Employee Stock Option [Member]
Stock-based Compensation Expense	308	331	907	1,021
Restricted Stock Units (RSUs) [Member]
Stock-based Compensation Expense	$ 761	$ 553	$ 1,935	$ 1,560

Note 4 - Diluted Net Income Per Share (Details Textual) - shares shares in Millions	3 Months Ended		9 Months Ended
	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1.2	1.6	1.4	1.5

Note 4 - Diluted Net Income Per Share - Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Numerator:
Net income (loss) applicable to Common Stockholders	$ 3,500	$ (21,190)	$ 8,138	$ (16,370)
Denominator:
Weighted average shares for basic net income per share (in shares)	27,286	27,054	27,252	27,026
Effect of dilutive securities:
Stock options and restricted stock units (in shares)	396		356
Weighted average shares for diluted net income per share (in shares)	27,682	27,054	27,608	27,026
Diluted net income (loss) per share (in dollars per share)	$ 0.13	$ (0.78)	$ 0.29	$ (0.61)

Note 5 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
Note 5 - Income Taxes (Details Textual) - USD ($)	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016	May 29, 2016
Income Tax Expense (Benefit)	$ 1,556,000	$ (12,510,000)	$ 4,138,000	$ (9,750,000)
Effective Income Tax Rate Reconciliation, Percent	31.00%	34.00%	34.00%	37.00%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%	35.00%	35.00%
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Amount				$ 12,500,000
Unrecognized Tax Benefits	$ 918,000		$ 918,000		$ 842,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	778,000		778,000		$ 715,000
Decrease in Unrecognized Tax Benefits is Reasonably Possible	$ 300,000		300,000
Excess Tax Deficiencies from Share-based Compensation			$ 80,000
Domestic Tax Authority [Member] \| Earliest Tax Year [Member]
Open Tax Year			1997
State and Local Jurisdiction [Member] \| Earliest Tax Year [Member]
Open Tax Year			1998

Note 6 - Inventories - Inventories (Details) - USD ($)
$ in Thousands

Feb. 26, 2017

May 29, 2016

Finished goods

$ 10,105

$ 12,165

Raw materials

10,188

9,855

Work in progress

2,980

3,515

$ 23,273

$ 25,535

^[1]

[1]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.

Note 7 - Debt (Details Textual) - USD ($)

3 Months Ended

9 Months Ended

Sep. 23, 2016

Feb. 26, 2017

Nov. 27, 2016

Feb. 28, 2016

Feb. 26, 2017

Feb. 28, 2016

^[2]

Nov. 01, 2016

May 29, 2016

Long-term Debt

$ 48,474,000

$ 53,845,000

Gain (Loss) on Extinguishment of Debt

276,000

817,000

Line of Credit, Current

$ 3,500,000

^[1]

$ (1,200,000)

(1,233,000)

Payments of Debt Extinguishment Costs

233,000

$ 233,000

Interest Rate Swap [Member] | BMO [Member]

Derivative, Notional Amount

$ 50,000,000

Derivative, Fixed Interest Rate

1.22%

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member]

Debt Instrument, Additional Borrowing Amount

$ 75,000,000

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member] | Prime Rate [Member] | Minimum [Member]

$ 897,000

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member] | Prime Rate [Member] | Maximum [Member]

0.25%

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member] | Eurodollar [Member] | Minimum [Member]

1.25%

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member] | Eurodollar [Member] | Maximum [Member]

1.25%

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member] | Term Loan [Member]

2.25%

Long-term Debt

$ 50,000,000

Debt Instrument, Term

5 years

Debt Instrument, Periodic Payment

$ 1,250,000

Debt Instrument, Interest Rate, Effective Percentage

2.97%

Credit Agreement With JPMorgan Chase, BMO Harris Bank, and City National Bank [Member] | Revolving Credit Facility [Member]

299,000

Line of Credit Facility, Maximum Borrowing Capacity

100,000,000

$ 598,000

Line of Credit, Current

$ 0

$ 1,500,000

$ 0

[1]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.
[2]	See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for a discussion of accounting principles adopted during the period.

Note 7 - Debt - Long-term Debt (Details) - USD ($)
$ in Thousands

Feb. 26, 2017

May 29, 2016

Less: unamortized debt issuance costs

$ 48,750

$ 54,662

(276)

(817)

Total long-term debt, net of unamortized debt issuance costs

48,474

53,845

Less: current portion of long-term debt, net

(4,940)

(7,873)

^[1]

Long-term debt, net

43,534

45,972

^[1]

Term Loan [Member]

Real Estate Loan [Member]

48,750

Capital Equipment Loan 1 [Member]

14,167

Capital Equipment Loan 2 [Member]

5,904

Capital Equipment Loan 3 [Member]

5,558

Capital Equipment Loan 4 [Member]

3,375

Real Estate Loan 2 [Member]

3,158

Capital Equipment Loan 5 [Member]

7,622

Capital Equipment Loan 6 [Member]

8,873

Industrial Revenue Bonds [Member]

3,940

Other comprehensive income before reclassifications, net of tax effect

$ 2,065

[1]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.

Note 7 - Debt - Long-term Debt (Details) (Parentheticals) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Feb. 26, 2017	May 29, 2016
Term Loan [Member]
Debt Instrument, Periodic Payment	$ 1,250	$ 1,250
Term Loan [Member] \| Minimum [Member]
Interest rate	1.25%	1.25%
Term Loan [Member] \| Maximum [Member]
Interest rate	2.25%	2.25%
Real Estate Loan [Member]
Debt Instrument, Periodic Payment	$ 133	$ 133
Interest rate	4.02%	4.02%
Capital Equipment Loan 1 [Member]
Debt Instrument, Periodic Payment	$ 175	$ 175
Interest rate	4.39%	4.39%
Capital Equipment Loan 2 [Member]
Debt Instrument, Periodic Payment	$ 95	$ 95
Interest rate	3.68%	3.68%
Capital Equipment Loan 3 [Member]
Debt Instrument, Periodic Payment	$ 56	$ 56
Interest rate	3.74%	3.74%
Capital Equipment Loan 4 [Member]
Debt Instrument, Periodic Payment	$ 68	$ 68
Interest rate	2.79%	2.79%
Real Estate Loan 2 [Member]
Debt Instrument, Periodic Payment	$ 32	$ 32
Real Estate Loan 2 [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	2.25%	2.25%
Capital Equipment Loan 5 [Member]
Debt Instrument, Periodic Payment	$ 108	$ 108
Capital Equipment Loan 5 [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	2.25%	2.25%
Capital Equipment Loan 6 [Member]
Debt Instrument, Periodic Payment	$ 75	$ 75
Capital Equipment Loan 6 [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Interest rate	2.92%	2.92%
Industrial Revenue Bonds [Member]
Interest rate	0.59%	0.59%

Note 8 - Related Party (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
Note 8 - Related Party (Details Textual) - USD ($)	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
Revenue from Related Parties	$ 72,000	$ 109,000	$ 265,000	$ 376,000
Accounts Receivable, Related Parties, Current	$ 150,000	$ 523,000	$ 150,000	$ 523,000

Note 9 - Stockholders' Equity (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Feb. 26, 2017	Feb. 26, 2017	May 29, 2016	Jul. 14, 2010
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	60,000	240,000
Common Stock, Capital Shares Reserved for Future Issuance	2,500,000	2,500,000
Stock Repurchase Program, Authorized Amount				$ 10
Treasury Stock, Shares, Acquired	0	0	0
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	20,000	130,522

Note 10 - Comprehensive Income - Components of Other Comprehensive Income (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Feb. 26, 2017

Feb. 28, 2016

Feb. 26, 2017

Feb. 28, 2016

Balance

^[1]

$ 103

430

Amounts reclassified from OCI

Other comprehensive income, net

103

430

Balance

$ 430

[1]	Derived from audited financial statements. See Note 1 - Organization, Basis of Presentation, and Summary of Significant Accounting Policies for discussion of accounting guidance adopted during the period.

Note 11 - Business Segment Reporting (Details Textual)	9 Months Ended
Note 11 - Business Segment Reporting (Details Textual)	Feb. 26, 2017	Feb. 28, 2016
Number of Operating Segments	3
Sales Revenue, Net [Member] \| Customer Concentration Risk [Member] \| Packaged Fresh Vegetables [Member]
Entity Wide Revenue Major Customer Number	2
Sales Revenue, Net [Member] \| Customer Concentration Risk [Member] \| Top Five Customers [Member]
Concentration Risk, Percentage	43.00%	45.00%
Sales Revenue, Net [Member] \| Customer Concentration Risk [Member] \| Costco [Member] \| Packaged Fresh Vegetables [Member]
Concentration Risk, Percentage	17.00%	20.00%
Sales Revenue, Net [Member] \| Customer Concentration Risk [Member] \| Wal-mart [Member] \| Packaged Fresh Vegetables [Member]
Concentration Risk, Percentage	14.00%	12.00%

Note 11 - Business Segment Reporting - Sales by Geographic Area (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 26, 2017	Feb. 28, 2016	Feb. 26, 2017	Feb. 28, 2016
CANADA
Segment sales	$ 16.6	$ 20.3	$ 50.6	$ 60.6
TAIWAN, PROVINCE OF CHINA
Segment sales	3.0	1.2	27.9	26.6
BELGIUM
Segment sales	12.9	6.2	19.8	7.3
CHINA
Segment sales	0.4	0.3	11.8	7.6
INDONESIA
Segment sales	1.5	2.4	6.6	6.3
JAPAN
Segment sales	1.3	1.0	6.2	4.6
PHILIPPINES
Segment sales	0.6	0.5	1.9	2.1
All Other Countries [Member]
Segment sales	$ 2.8	$ 3.4	$ 8.5	$ 10.5

Note 11 - Business Segment Reporting - Operations by Business Segment (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Feb. 26, 2017

Feb. 28, 2016

Feb. 26, 2017

Feb. 28, 2016

$ 136,568

$ 129,990

$ 404,827

$ 405,786

39,102

35,308

133,285

125,556

23,432

12,931

63,529

48,173

3,500

(21,190)

8,138

(16,370)

2,717

2,147

7,827

6,486

^[1]

413

1,238

400

484

1,432

1,425

Packaged Fresh Vegetables [Member]

1,556

(12,510)

4,138

(9,750)

105,447

107,348

299,370

318,218

16,802

20,343

51,073

60,948

10,114

4,334

36,522

27,565

(2,492)

(36,963)

(419)

(34,361)

1,862

1,455

5,474

4,470

413

1,238

(77)

427

594

1,304

(594)

(905)

(81)

Food Export [Member]

7,276

6,389

56,316

50,873

7,276

6,389

56,316

50,873

558

521

3,436

3,200

(116)

(27)

812

1,250

(33)

(189)

229

Biomaterials [Member]

23,532

15,701

47,795

34,748

15,024

8,576

25,896

13,735

12,581

7,618

22,640

15,713

7,135

3,450

9,690

4,911

794

656

2,225

1,902

121

Corporate Segment [Member]

2,031

973

2,769

1,385

313

552

1,346

1,947

179

458

931

1,695

(1,027)

12,350

(1,945)

11,830

125

113

477

825