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Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	May 27, 2012	Jul. 20, 2012	Nov. 27, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	LANDEC CORP \CA\
Document Type	10-K
Current Fiscal Year End Date	--05-28
Entity Common Stock, Shares Outstanding		25,678,434
Entity Public Float			$ 126,204,000
Amendment Flag	false
Entity Central Index Key	0001005286
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	May 27, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

Consolidated Balance Sheets - USD ($) $ in Thousands	May 27, 2012	May 29, 2011
Current assets:
Cash and cash equivalents	$ 22,177	$ 8,135
Marketable securities		28,124
Accounts receivable, less allowance for doubtful accounts of $512 and $342 at May 27, 2012 and May 29, 2011, respectively	31,951	21,653
Accounts receivable, related party	323	453
Income taxes receivable	47	571
Inventories, net	22,011	20,161
Deferred taxes	2,076	542
Prepaid expenses and other current assets	2,578	5,987
Total current assets	81,163	85,626
Investment in non-public company, non-fair value	793	793
Investment in non-public company, fair value	21,500	15,662
Property and equipment, net	63,495	51,779
Goodwill, net	49,620	36,462
Trademarks/ trade names, net	48,428	12,428
Customer relationships, net	10,557	3,366
Other assets	2,136	196
Total Assets	277,692	206,312
Current liabilities:
Accounts payable	22,644	16,747
Related party payables	776	300
Accrued compensation	5,782	3,080
Other accrued liabilities	18,642	3,581
Deferred revenue	162	2,657
Lines of credit	11,666
Current portion of long-term debt	7,012	4,330
Total current liabilities	66,684	30,695
Long-term debt	40,305	15,500
Deferred taxes	18,037	11,338
Other non-current liabilities	1,108	11,053
Total liabilities	126,134	68,586
Stockholders’ equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 25,644,580 and 26,405,799 shares issued and outstanding at May 27, 2012 and May 29, 2011, respectively	26	27
Additional paid-in capital	119,894	119,169
Accumulated other comprehensive loss		(267)
Retained earnings	29,822	17,126
Total stockholders’ equity	149,742	136,055
Non-controlling interest	1,816	1,671
Total Equity	151,558	137,726
Total Liabilities and Stockholders’ Equity	$ 277,692	$ 206,312

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	May 27, 2012	May 29, 2011
Allowance for doubtful accounts (in Dollars)	$ 512	$ 342
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	25,644,580	25,644,580
Common stock, shares outstanding	26,405,799	26,405,799

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	May 27, 2012	May 29, 2011	May 30, 2010
Revenues:
Product sales	$ 310,272	$ 267,121	$ 228,390
Services revenue, related party	3,138	3,391	3,699
License fees	2,700	5,400	5,400
Research, development and royalty revenues	1,442	817	735
Total revenues	317,552	276,729	238,224
Cost of revenue:
Cost of product sales	257,213	223,613	198,075
Cost of product sales, related party	5,646	3,554	3,391
Cost of services revenue	2,555	2,867	2,992
Total cost of revenue	265,414	230,034	204,458
Gross profit	52,138	46,695	33,766
Operating costs and expenses:
Research and development	9,625	9,275	4,361
Selling, general and administrative	26,515	24,608	17,698
Other operating expenses	1,421	4,780	3,725
Total operating costs and expenses	37,561	38,663	25,784
Operating income	14,577	8,032	7,982
Dividend income	1,125	328
Interest income	180	430	834
Interest expense	(929)	(820)	(88)
Other income	5,331	472
Net income before taxes	20,284	8,442	8,728
Income tax expense	(7,185)	(4,181)	(4,262)
Consolidated net income	13,099	4,261	4,466
Non controlling interest	(403)	(341)	(482)
Net Income applicable to Common Stockholders	$ 12,696	$ 3,920	$ 3,984
Basic net income per share (in Dollars per share)	$ 0.49	$ 0.15	$ 0.15
Diluted net income per share (in Dollars per share)	$ 0.49	$ 0.15	$ 0.15
Shares used in per share computation:
Basic (in Shares)	25,849	26,397	26,382
Diluted (in Shares)	26,126	26,626	26,633

Consolidated Statements of Changes in Stockholder's Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at May. 31, 2009	$ 26	$ 116,158	$ 9,222		$ 125,406	$ 1,790
Balance (in Shares) at May. 31, 2009	26,326,889
Issuance of common stock	$ 1	378			379
Issuance of common stock (in Shares)	121,442
Issuance of common stock for vested restricted stock units (in Shares)	41,928
Taxes paid by Company for stock swaps and RSUs		(339)			(339)
Stock based compensation		1,016			1,016
Tax benefit from stock-based compensation expense		517			517
Non-controlling interest						482	$ 482
Payments to non-controlling interest						(581)
Net income and comprehensive income			3,984	$ (179)	3,805
Balance at May. 30, 2010	$ 27	117,730	13,206	(179)	130,784	1,691
Balance (in Shares) at May. 30, 2010	26,490,259
Common stock repurchased on the open market							1,184
Non-controlling interest							341
Balance at May. 29, 2011	$ 27	119,169	17,126	(267)	136,055	1,671	136,055
Balance (in Shares) at May. 29, 2011	26,405,799
Issuance of common stock		61			61
Issuance of common stock (in Shares)	72,572
Issuance of common stock for vested restricted stock units (in Shares)	83,453
Common stock repurchased on the open market	$ (1)	(5,005)			(5,006)		5,006
Common stock repurchased on the open market (in Shares)	(917,244)
Taxes paid by Company for stock swaps and RSUs		(260)			(260)
Stock based compensation		1,872			1,872
Tax benefit from stock-based compensation expense		4,057			4,057
Non-controlling interest						403	403
Payments to non-controlling interest						(258)
Net income and comprehensive income			12,696	$ 267	12,963
Balance at May. 27, 2012	$ 26	$ 119,894	$ 29,822		$ 149,742	$ 1,816	$ 149,742
Balance (in Shares) at May. 27, 2012	25,644,580

Consolidated Statements of Changes in Stockholder's Equity (Parentheticals)	12 Months Ended		13 Months Ended
	May 27, 2012	May 30, 2010	May 29, 2011
Common Stock [Member]
Issuance of common stock, net of taxes paid by Landec on behalf of employees	$2.55 to $6.95	$1.89 to $6.75	$3.38 to $3.80

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	May 27, 2012	May 29, 2011	May 30, 2010
Cash flows from operating activities:
Consolidated net income	$ 13,099	$ 4,261	$ 4,466
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,621	5,313	3,364
Stock-based compensation expense	1,872	1,951	1,016
Deferred taxes	3,283	3,257	3,248
Change in investment in non-public company (fair market value)	(5,838)	(662)
Increase in long-term receivable		(800)	(800)
Tax benefit from stock based compensation	(4,057)	(764)	(517)
Net loss on disposal of property and equipment	12	26
Impairment charges		4,780	1,000
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(3,246)	(3,016)	(1,506)
Accounts receivable, related party	130	276	(97)
Income taxes receivable	4,581	878	(764)
Inventories, net	(441)	(4,054)	(1,269)
Issuance of notes and advances receivable	(3,699)	(3,073)	(3,030)
Collection of notes and advances receivable	3,704	3,314	2,975
Prepaid expenses and other current assets	3,588	602	(1,172)
Accounts payable	(544)	2,393	957
Related party accounts payable	476	(49)	50
Income taxes payable			1,162
Accrued compensation	2,701	1,038	(264)
Other accrued liabilities	3,434	532	703
Deferred revenue	(2,495)	(1,734)	(2,039)
Net cash provided by operating activities	22,181	14,469	7,483
Cash flows from investing activities:
Purchases of property and equipment	(5,371)	(6,684)	(5,192)
Acquisition of Lifecore, net of cash acquired (Note 2)			(39,682)
Acquisition of GreenLine (Note 2)	(66,826)
Purchase of marketable securities	(30,723)	(59,833)	(67,433)
Proceeds from maturities of marketable securities	31,104	24,843	59,970
Proceeds from sales of marketable securities	27,743	27,287	9,540
Investment in non-public company (fair market value)		(15,000)
Net cash used in investing activities	(44,073)	(29,387)	(42,797)
Cash flows from financing activities:
Repurchase of outstanding common stock	(5,006)	(1,184)
Proceeds from sale of common stock	61	126	379
Taxes paid by Company for stock swaps and RSUs	(260)	(218)	(339)
Tax benefit from stock-based compensation expense	4,057	764	517
Net change in other assets/liabilities	(1,813)	49
Proceeds from long term debt	31,816		20,000
Proceeds from lines of credit	12,766
Payments on long term debt	(4,329)	(3,940)	(387)
Payments on lines of credit	(1,100)
Payments to non controlling interest	(258)	(361)	(498)
Net cash provided by (used in) financing activities	35,934	(4,764)	19,672
Net increase (decrease) in cash and cash equivalents	14,042	(19,682)	(15,642)
Cash and cash equivalents at beginning of year	8,135	27,817	43,459
Cash and cash equivalents at end of year	22,177	8,135	27,817
Supplemental disclosure of cash flows information:
Cash paid during the period for interest	952	761	88
Cash paid during the period for income taxes	$ 246	146	652
Supplemental schedule of noncash operating and financing activities:
Long-term receivable from Monsanto		$ 800	800
Accrued non controlling interest distribution			$ 250

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

12 Months Ended

May 27, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [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 polymer products for food and agricultural products, medical devices and licensed partner applications that incorporate Landec’s patented polymer technologies. The Company has two proprietary polymer technology platforms: 1) Intelimer® polymers, and 2) hyaluronan (“HA”) biopolymers. The Company’s HA biopolymers are proprietary in that they are specially formulated for specific customers to meet strict regulatory requirements. The Company’s polymer technologies, along with its customer relationships and trade names, are the foundation, and a key differentiating advantage upon which Landec has built its business. The Company sells specialty packaged 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, HA-based biomaterials through its Lifecore Biomedical, Inc. (“Lifecore”) subsidiary, and Intellicoat® coated seed products through its Landec Ag LLC (“Landec Ag”) subsidiary.

Basis of Presentation

Basis of Consolidation

The consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles and include the accounts of Landec Corporation and its subsidiaries, Apio, Lifecore and Landec Ag. All material inter-company 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 consolidation, 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 parties, 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 the non-public companies in which the Company holds equity investments are not VIEs.

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to the current year presentation.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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; sales returns and allowances; recognition and measurement of current and deferred income tax assets and liabilities; the assessment of recoverability of long-lived assets; the valuation of 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 trends, 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.

Concentrations of Risk

Cash and cash equivalents, marketable securities, trade accounts receivable, grower advances and notes receivable are financial instruments that potentially subject the Company to concentrations of credit risk. Our Company policy limits, among other things, the amount of credit exposure to any one issuer and to any one type of investment, other than securities issued or guaranteed by the U.S. government. The Company routinely assesses the financial strength of customers and growers and, as a consequence, believes that trade receivables, grower advances and notes receivable credit risk exposure is limited. Credit losses for bad debt are provided for in the consolidated financial statements through a charge to operations. A valuation allowance is provided for known and anticipated credit losses. The recorded amounts for these financial instruments approximate their fair value.

Several of the raw materials we use to manufacture our products are currently purchased from a single source, including some monomers used to synthesize Intelimer® polymers, substrate materials for our breathable membrane products and raw materials for our HA products.

During the fiscal year ended May 27, 2012, sales to the Company’s top five customers accounted for approximately 45% of total revenue with the top customer from the Food Products Technology segment accounting for approximately 17% of total revenues. In addition, approximately 36% of the Company’s total revenues were derived from product sales to international customers, one of whom individually accounted for more than 5% of total revenues. As of May 27, 2012, the top customer from the Food Products Technology segment represented approximately 11% of total accounts receivable.

During the fiscal year ended May 29, 2011, sales to the Company’s top five customers accounted for approximately 44% of total revenue with the top customer from the Food Products Technology segment accounting for approximately 16% of total revenues. In addition, approximately 38% of the Company’s total revenues were derived from product sales to international customers, two of whom individually accounted for more than 5% of total revenues. As of May 29, 2011, the top customer from the Food Products Technology segment represented approximately 14% of total accounts receivable.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flow expected to be generated from the asset. If the future undiscounted cash flows are not sufficient to recover the carrying value of the assets, the assets’ carrying value is adjusted to fair value.

The Company regularly evaluates its long-lived assets for indicators of possible impairment. On July 16, 2010, Aesthetic Science sold the rights to its Smartfil™ Injector System. The Company evaluated its cost method investment for impairment, utilizing a discounted cash flow analysis under the terms of the purchase agreement. Based on the terms of the agreement, the Company has determined that its investment was other than temporarily impaired and therefore recorded an impairment loss of $1.0 million during the year ended May 30, 2010.

Financial Instruments

The Company’s financial instruments are primarily composed of marketable debt securities, commercial-term trade payables, grower advances, and notes receivable, as well as long-term notes receivables and debt instruments. For short-term instruments, the historical carrying amount closely approximates fair value. Fair values for long-term financial instruments not readily marketable are estimated based upon discounted future cash flows at prevailing market interest rates. Based on these assumptions, management believes the fair market values of the Company’s financial instruments are not materially different from their recorded amounts as of May 27, 2012 and May 29, 2011.

Accounts Receivable and Allowance for Doubtful Accounts

The Company carries its accounts receivable at their face amounts less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts, sales discounts and estimated losses resulting from the inability of its customers to make required payments. The allowance for doubtful accounts is determined based on review of the overall condition of accounts receivable balances and review of significant past due accounts. The allowance for doubtful accounts is based on specific identification of past due amounts and a general reserve for accounts over 90-days past due. The changes in the Company’s allowance for doubtful accounts are summarized in the following table (in thousands).

	Balance at beginning of period		Additions from acquisitions and additions from charges to costs and expenses		Deductions			Balance at end of period
Year ended May 30, 2010	$	165	$	68	$	(44	)	$	189
Year ended May 29, 2011	$	189	$	209	$	(56	)	$	342
Year ended May 27, 2012	$	342	$	248	$	(78	)	$	512

Revenue Recognition

Revenue from product sales is recognized when there is persuasive evidence that an arrangement exists, title has transferred, the price is fixed or determinable, and collectability is reasonably assured. Allowances are established for estimated uncollectible amounts, product returns, and discounts based on specific identification and historical losses.

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 Income. Revenue recognition for produce generally occurs when the customer receives the product or at the time title passes to the customer. Customers generally do not have the right to return product unless damaged or defective. Net sales is comprised of gross sales reduced by customer returns and, consumer promotion allowances,

Licensing revenue is recognized in accordance with accounting guidance. 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.

Contract revenue for research and development (R&D) is recorded as earned, based on the performance requirements of the contract. Non-refundable contract fees for which no further performance obligations exist, and

there is no continuing involvement by the Company, are recognized on the earlier of when the payments are received or when collection is assured.

Shipping and Handling Costs

Amounts billed to third-party customers for shipping and handling are included as a component of revenues. Shipping and handling costs incurred are included as a component of cost of products sold and represent costs incurred by Dole to ship product from the sourcing locations to the end consumer markets.

Other Accounting Policies and Disclosures

Cash and Cash Equivalents

The Company records all highly liquid securities with three months or less from date of purchase to maturity as cash equivalents. Cash equivalents consist mainly of certificate of deposits (CDs), money market funds and U.S. Treasuries. The market value of cash equivalents approximates their historical cost given their short-term nature.

Marketable Securities

Short-term marketable securities consist of CDs that are FDIC insured and single A or better rated municipal bonds with original maturities of more than three months at the date of purchase regardless of the maturity date as the Company views the funds within its portfolio as available for use in its current operations. The Company classifies all debt securities with readily determined market values as “available for sale”. The contractual maturities of the Company's marketable securities that are due in less than one year represent $0 and $21.5 million of its marketable securities and those due in one to two years represent the remaining $0 and $6.6 million of the Company’s marketable securities as of May 27, 2012 and May 29, 2011, respectively. Investments in marketable securities are carried at fair market value. Unrealized gains and losses are reported as a component of stockholders’ equity. The cost of debt securities is adjusted for amortization of premiums and discounts to maturity. This amortization is recorded to interest income. Realized gains and losses on the sale of available-for-sale securities are also recorded to interest income and were not significant for the fiscal years ended May 27, 2012 and May 29, 2011. During fiscal years 2012 and 2011, the Company received proceeds of $27.7 million and $27.3 million, respectively, from the sale of marketable securities. The cost of securities sold is based on the specific identification method.

Inventories

Inventories are stated at the lower of cost (using the first-in, first-out method) or market. As of May 27, 2012 and May 29, 2011 inventories consisted of (in thousands):

	May 27, 2012		May 29, 2011
Finished goods	$	9,406	$	10,261
Raw materials		9,876		7,999
Work in progress		2,729		1,901
Inventories, net	$	22,011	$	20,161

If the cost of the inventories exceeds their net realizable value, provisions are recorded currently to reduce them to net realizable value. The Company also provides a provision for slow moving and obsolete inventories.

Advertising Expense

Advertising expenditures for the Company are expensed as incurred. Advertising expense for the Company for fiscal years 2012, 2011 and 2010 was $406,000, $458,000 and $557,000, respectively.

Notes and Advances Receivable

Apio makes advances to produce growers for crop and harvesting costs. Notes and advances receivable related to operating activities are for the sourcing of crops for Apio’s business and notes and advances receivable related to investing activities are for financing transactions with third parties and there were no notes or advance at May 27, 2012. Typically operating advances are paid off within the growing season (less than one year) from proceeds from the sale of harvested crops. Advances not fully paid during the current growing season are converted to interest bearing obligations, evidenced by contracts and notes receivable. These notes and advances receivable are secured by perfected liens on land and/or crops and have terms that range from six to twelve months. Notes receivable are reviewed at least quarterly for collectability. A reserve is established for any note or advance deemed to not be fully collectible based upon an estimate of the crop value or the fair value of the security for the note or advance.

Related Party Transactions

The Company provides cooling and distribution services to both a farm and Beachside Produce LLC ("Beachside"), a commodity produce distributor, in which the Chairman of Apio has a farming and ownership interest, respectively. During fiscal years 2012, 2011 and 2010, the Company recognized revenues of $3.8 million, $4.1 million, and $4.6 million, respectively, which have been included in product sales and in service revenues in the accompanying Consolidated Statements of Income, from the sale of products and providing cooling services to these parties. The related receivable balances of $323,000 and $453,000 are included in accounts receivable in the accompanying Consolidated Balance Sheets as of May 27, 2012 and May 29, 2011, respectively.

Additionally, unrelated to the revenue transactions above, the Company purchases produce from the farm in which the Chairman of Apio has an ownership interest, Beachside, and Windset (see Note 3) for sale to third parties. During fiscal years 2012, 2011 and 2010, the Company recognized cost of product sales of $5.6 million, $3.6 million and $3.4 million, respectively, which have been included in product sales and in service revenues in the accompanying Consolidated Statements of Income, from the sale of products purchased from these parties. The related accounts payable of $776,000 and $300,000 are included in accounts payable, related party in the accompanying Consolidated Balance Sheets as of May 27, 2012 and May 29, 2011, respectively.

All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors.

Property and Equipment

Property and equipment are stated at cost. Expenditures for major improvements are capitalized while repairs and maintenance are charged to expense. Depreciation is expensed on a straight-line basis over the estimated useful lives of the respective assets, generally three to thirty years for buildings and leasehold improvements and three to seven years for furniture and fixtures, computers, capitalized software, capitalized leases, machinery, equipment and autos. Leasehold improvements are amortized on a straight-line basis over the lesser of the economic life of the improvement or the life of the lease.

The Company capitalizes software development costs for internal use in accordance with accounting guidance. Capitalization of software development costs begins in the application development stage and ends when the asset is placed into service. The Company amortizes such costs using the straight-line basis over estimated useful lives of three to seven years. During fiscal years 2012 and 2011, the Company did not capitalize any software development costs.

Intangible Assets

Property, plant and equipment and 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 group) may not be recoverable. The Company’s impairment review requires significant management judgment including estimating the future success of product lines, future sales volumes, revenue and expense growth rates, alternative uses

for the assets and estimated proceeds from the disposal of the assets. The Company conducts quarterly reviews of idle and underutilized equipment, and reviews business plans for possible impairment indicators. Impairment occurs when the carrying amount of the asset (or asset group) exceeds its estimated future undiscounted cash flows and the impairment is viewed as other than temporary. When impairment is indicated, an impairment charge is recorded for the difference between the asset’s book value and its estimated fair value. Depending on the asset, estimated fair value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in similar condition. The use of different assumptions would increase or decrease the estimated fair value of assets and would increase or decrease any impairment measurement.

The Company’s intangible assets are comprised of customer relationships with an estimated useful life of twelve to thirteen years and trademarks/trade names and goodwill with indefinite lives (collectively, “intangible assets”). Accounting guidance defines goodwill as “the excess of the cost of an acquired entity over the net of the estimated fair values of the assets acquired and the liabilities assumed at date of acquisition.” All intangible assets, including goodwill, associated with the acquisitions of Lifecore, Apio and GreenLine, were allocated to our HA-based Biomaterials reporting unit and our Food Products Technology reporting unit, respectively, based upon the allocation of assets and liabilities acquired and consideration paid for each reporting unit. As of May 27, 2012, the HA-based Biomaterials reporting unit had $13.9 million of goodwill and the Food Products Technology reporting unit had $35.7 million of goodwill.

The Company tests its indefinite-lived intangible assets for impairment at least annually. When evaluating indefinite-lived intangible assets for impairment the Company compares the fair value of the asset to its carrying value to determine if there is an impairment loss. When evaluating goodwill for impairment the Company first compares the fair value of the reporting unit to its carrying value to determine if there is an impairment loss. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired; thus application of the second step of the two-step approach under accounting guidance is not required. Application of the intangible assets impairment tests requires significant judgment by management, including identification of reporting units, assignment of assets and liabilities to reporting units, assignment of intangible assets to reporting units, and the determination of the fair value of each indefinite-lived intangible asset and reporting unit based upon projections of future net cash flows, discount rates and market multiples, which require significant judgments and estimates.

The Company tested its indefinite-lived intangible assets and goodwill for impairment as of July 22, 2012 and determined that no adjustments to the carrying values of the intangible assets were necessary as of that date. On a quarterly basis, the Company considers the need to update its most recent annual tests for possible impairment of its intangible assets, based on management’s assessment of changes in its business and other economic factors since the most recent annual evaluation. Such changes, if significant or material, could indicate a need to update the most recent annual tests for impairment of the intangible assets during the current period. The results of these tests could lead to write-downs of the carrying values of the intangible assets in the current period.

The Company uses the discounted cash flow (“DCF”) approach to develop an estimate of fair value. The DCF approach recognizes that current value is premised on the expected receipt of future economic benefits. Indications of value are developed by discounting projected future net cash flows to their present value at a rate that reflects both the current return requirements of the market and the risks inherent in the specific investment. The market approach is not used to value the Food Products Technology and the HA-based Biomaterials reporting units (the “reporting units”) because insufficient market comparables exist to enable the Company to develop a reasonable fair value of its intangible assets due to the unique nature of each of the Company’s Reporting Units.

The DCF approach requires the Company to exercise judgment in determining future business and financial forecasts and the related estimates of future net cash flows. Future net cash flows depend primarily on future product sales, which are inherently difficult to predict. These net cash flows are discounted at a rate that reflects both the current return requirements of the market and the risks inherent in the specific investment.

The DCF associated with the Food Products Technology reporting unit is based on management’s five-year projection of revenues, gross profits and operating profits by fiscal year and assumes a 37% effective tax rate for each

year. Management takes into account the historical trends of Apio and the industry categories in which Apio operates along with inflationary factors, current economic conditions, new product introductions, cost of sales, operating expenses, capital requirements and other relevant data when developing its projection. The estimated fair value of the Food Products Technology reporting units as of July 22, 2012 exceeded its net book value by 118% and therefore, no intangible asset impairment was deemed to exist. For the test performed as of July 24, 2011, the projected cash flow from operations for determining the DCF for fiscal year 2012 was $21.7 million for the Food Products Technology reporting unit. The actual cash flow from operations for fiscal year 2012 was $19.4 million. The difference of $2.3 million was primarily due to the timing of working capital changes.

The DCF associated with the HA-based Biomaterials reporting unit is based on management’s five-year projections of revenues, gross profits and operating profits by fiscal year and assumes a 37% effective tax rate for each year. Management takes into account the historical trends of Lifecore and the industry categories in which Lifecore operates along with inflationary factors, current economic conditions, new product introductions, cost of sales, operating expenses, capital requirements and other relevant data when developing its projection. The trade name intangible asset was valued using the relief from royalty valuation method and the customer relationship intangible asset was valued using the multi-period excess earnings method. The fair value of goodwill was calculated as the excess of consideration paid, including the fair value of contingent consideration under the terms of the purchase agreement, over the fair value of the tangible and intangible assets acquired less liabilities assumed. The Company updated its analysis of the fair value of the indefinite-lived intangible assets and goodwill as of its annual impairment analysis date, concluding that the fair value of the Hyaluronan-based Biomaterials reporting unit, as determined by the DCF approach, exceeded its net book value by 143%, and therefore, no intangible asset impairment was deemed to exist. For the test performed as of July 24, 2011, the projected cash flow from operations for determining the DCF for fiscal year 2012 was a negative $5.0 million (due to the projected earn out payment, see Note 2) for the HA-based Biomaterials reporting unit. The actual cash flow from operations for fiscal year 2012 was a positive $5.6 million. The difference of $10.6 million is primarily due to Lifecore paying the $10 million earn out payment in June 2012 rather than in May 2012, as originally forecasted.

Investment in Non-Public Company

The Company’s investment in Aesthetic Science is carried at cost and adjusted for impairment losses. Since there is no readily available market value information, the Company periodically reviews this investment to determine if any other than temporary declines in value have occurred based on the financial stability and viability of Aesthetic Science.

Aesthetic Science sold the rights to its Smartfil™ Injector System on July 16, 2010. As a result, Landec evaluated its cost method investment for impairment, utilizing a discounted cash flow analysis. Based on the terms of the agreement, the Company determined that its investment was other than temporarily impaired and therefore, recorded an impairment loss of $1.0 million as of May 30, 2010, which is classified as part of other operating expenses in the Consolidated Statements of Income. The Company’s carrying value of its investment in Aesthetic Sciences, net of the impairment loss, is $793,000 at May 27, 2012 and May 29, 2011.

On February 15, 2011, the Company made an investment in Windset Holdings 2010 Ltd., a Canadian corporation (“Windset”), which is reported as an investment in non-public company, fair value, in the accompanying Consolidated Balance Sheets as of May 27, 2012 and May 29, 2011. The Company has elected to account for its investment in Windset under the fair value option (see Note 3).

Deferred Revenue

Cash received in advance of services performed (principally related to upfront license fees) are recorded as deferred revenue. At May 27, 2012, $162,000 was recognized as advances from customers. At May 29, 2011, $2.3 million was recognized as deferred license fee revenues and $357,000 as advances from customers.

Comprehensive Loss

Comprehensive loss consists of net income and other comprehensive loss and is reported as a component of stockholders’ equity.

Prior to May 23, 2012, the Company accounted for its interest rate swap as a cash flow hedge and included the fair market value of the swap in comprehensive loss. As discussed in Note 9, on May 23, 2012, the Company extinguished its debt with Wells Fargo but did not terminate the swap. As a result of extinguishing the debt, the swap was no longer an effective hedge and therefore, the fair value of the swap at the time the debt was extinguished of $347,000 was reversed from other comprehensive income and recorded in other expense. For the fiscal year ended May 29, 2011, the comprehensive loss from the unrealized loss on the interest rate swap, net of $159,000 of income taxes, was $267,000. For the fiscal year ended May 30, 2010, the comprehensive loss from the unrealized loss on the interest rate swap, net of $105,000 of income taxes, was $179,000.

Non Controlling Interest

The Company reports all non controlling interests as a separate component of stockholders’ equity, the reporting of consolidated net income (loss) as the amount attributable to both the parent and the non controlling interests and the separate disclosure of net income (loss) attributable to the parent and to the non controlling interests.

In connection with the acquisition of Apio, Landec acquired Apio’s 60% general partner interest in Apio Cooling, a California limited partnership. Apio Cooling is included in the consolidated financial statements of Landec for all periods presented. The non-controlling interest balance of $1.8 million at May 27, 2012 and $1.7 million at May 29, 2011 is comprised of the limited partners’ interest in Apio Cooling.

Income Taxes

The Company accounts for income taxes in accordance with accounting guidance which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company takes into account such factors as prior earnings history, expected future earnings, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of a deferred tax asset, carryback and carryforward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. At May 27, 2012, the Company had $419,000 valuation allowance against deferred tax assets.

In addition to valuation allowances, the Company establishes accruals for uncertain tax positions. The tax-contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company’s effective tax rate includes the impact of tax-contingency accruals as considered appropriate by management.

A number of years may elapse before a particular matter, for which the Company has accrued, is audited and finally resolved. The number of years with open tax audits varies by jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes its tax-contingency accruals are adequate to address known tax contingencies. Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution. Unfavorable settlement of any particular issue could increase the effective tax rate. Any resolution of a tax issue may require the use of cash in the year of resolution. The Company’s tax-contingency accruals are presented in the balance sheet within accrued liabilities.

Per Share Information

Accounting guidance requires the presentation of basic and diluted earnings per share. Basic earnings per share excludes any dilutive effects of options, warrants and convertible securities and is computed using the weighted average number of common share outstanding. Diluted earnings per share reflects the potential dilution if securities or other contracts to issue common stock were exercised or converted into common stock. Diluted common equivalent shares consist of stock options using the treasury stock method.

The following table sets forth the computation of diluted net income per share (in thousands, except per share amounts):

	Fiscal Year Ended May 27, 2012		Fiscal Year Ended May 29, 2011		Fiscal Year Ended May 30, 2010
Numerator:
Net income applicable to Common Stockholders	$	12,696	$	3,920	$	3,984
Denominator:
Weighted average shares for basic net income per share		25,849		26,397		26,382
Effect of dilutive securities:
Stock options and restricted stock units		277		229		251
Weighted average shares for diluted net income per share		26,126		26,626		26,633

Diluted net income per share	$	0.49	$	0.15	$	0.15

Options to purchase 1,855,167, 2,032,867 and 1,016,239 shares of Common Stock at a weighted average exercise price of $6.72, $6.67 and $7.62 per share were outstanding during fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010, respectively, but were not included in the computation of diluted net income per share because the options’ exercise price were greater than the average market price of the Common Stock and, therefore, their inclusion would be antidilutive.

Cost of Sales

The Company includes in cost of sales all the costs related to the sale of products in accordance with generally accepted accounting principles. These costs include the following: raw materials (including produce, seeds, packaging, syringes and fermentation and purification supplies), direct labor, overhead (including indirect labor, depreciation, and facility related costs) and shipping and shipping related costs.

Research and Development Expenses

Costs related to both research contracts and Company-funded research is included in research and development expenses. Costs to fulfill research contracts generally approximate the corresponding revenue. Research and development costs are primarily comprised of salaries and related benefits, supplies, travel expenses, consulting expenses and corporate allocations.

Accounting for Stock-Based Compensation

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. The cash flows resulting from the tax benefit due to tax deductions in excess of the compensation expense recognized for those options (excess tax benefit) are classified as financing activities with the statement of cash flows. The Company’s stock-based awards include stock option grants and restricted stock unit awards (RSUs).

During the fiscal year ended May 27, 2012, the Company recognized stock-based compensation expense of $1,872,000 which included $826,000 for restricted stock unit awards and $1,046,000 for stock option grants. During

the fiscal year ended May 29, 2011, the Company recognized stock-based compensation expense of $1,951,000 which included $857,000 for restricted stock unit awards and $1,094,000 for stock option grants. During the fiscal year ended May 30, 2010, the Company recognized stock-based compensation expense of $1,016,000 which included $474,000 for restricted stock unit awards and $542,000 for stock option grants.

The following table summarizes the stock-based compensation by income statement line item:

	Fiscal Year Ended May 27, 2012		Fiscal Year Ended May 29, 2011		Fiscal Year Ended May 30, 2010
Research and development	$	530,000	$	565,000	$	185,000
Sales, general and administrative		1,342,000		1,386,000		831,000
Total stock-based compensation expense	$	1,872,000	$	1,951,000	$	1,016,000

The estimated fair value for stock options, which determines the Company’s calculation of compensation expense, is based on the Black-Scholes option pricing model. The Company uses the straight line single option method to calculate and recognize the fair value of stock-based compensation arrangements. In addition, the Company uses historical data to estimate pre-vesting forfeitures and records stock-based compensation expense only for those awards that are expected to vest and revises those estimates in subsequent periods if the actual forfeitures differ from the prior estimates.

As of May 27, 2012, May 29, 2011 and May 30, 2010, the fair value of stock option grants was estimated using the Black-Scholes option pricing model. The following weighted average assumptions were used:

	Fiscal Year Ended May 27, 2012		Fiscal Year Ended May 29, 2011		Fiscal Year Ended May 30, 2010
Expected life (in years)		3.76		3.76		3.56
Risk-free interest rate		0.59%		1.16%		1.47%
Volatility		0.53		0.52		0.52
Dividend yield		0%		0%		0%

The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility.

The weighted average estimated fair value of Landec employee stock options granted at grant date market prices during the fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010 was $2.65, $2.42 and $2.52 per share, respectively. No stock options were granted above or below grant date market prices during the fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010.

Fair Value Measurements

The Company uses fair value measurement accounting for financial assets and liabilities and for financial instruments and certain other items at fair value. The Company has elected the fair value option for its investment in a non-public company (see Note 3). 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 value measurements, which prioritizes the inputs used in measuring fair value as follows:

Level 1

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

Level 2

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

Level 3

– unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.

As of May 27, 2012, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis, including cash equivalents, marketable securities, interest rate swap and liability for contingent consideration in connection with the acquisition of GreenLine and its minority interest investment in Windset.

The fair value of the Company’s cash equivalents and marketable securities is determined based on observable inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized its cash equivalents and marketable securities as Level 1.

The fair value of the Company’s interest rate swap is determined based on model inputs that can be observed in a liquid market and key inputs include yield curves and are categorized as Level 2 inputs.

The fair value of the Company’s liability for contingent consideration is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The Company determined the fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis, as further discussed in Note 2 to the Consolidated Financial Statements.

The Company has elected the fair value option of accounting for its investment in Windset. The fair value of the Company’s investment in Windset utilizes significant unobservable inputs in the discounted cash flow models, including projected cash flows, growth rates and the discount rate, and is therefore, considered Level 3, as further discussed in Note 3.

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.

Recent Accounting Pronouncements

Intangibles-Goodwill and Other

In September 2011, the FASB issued new guidance that will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this amendment, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendment includes a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The guidance is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company does not expect that the adoption of this update will have a material impact on its consolidated financial statements.

Presentation of Comprehensive Income

In December 2011, the FASB issued new guidance that improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this standard require that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, adjustments must be displayed for items that are reclassified from other comprehensive income ("OCI") to net income, in both net income and OCI. The standard does not change the current option for presenting components of OCI gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and are to be applied retrospectively, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Fair Value Measurement

In May 2011, the FASB issued new guidance which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. The new guidance will become effective for the Company on December 1, 2012. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements, however, presentation of disclosures around fair value measurements will be expanded to conform to the requirements of the new guidance for all periods presented.

Disclosures about Offsetting Assets and Liabilities

In November 2011, the FSB issued new guidance which is effective for annual reporting periods beginning January 1, 2013. This guidance amends the disclosure requirements around offsetting to enable users of the financial statements to understand the effect of those arrangements on its financial position. Entities are required to disclose both gross and net information about the instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
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-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Note 2 - Acquisitions

12 Months Ended

May 27, 2012

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

2. Acquisitions

GreenLine Holding Company

On April 23, 2012 (the “GreenLine Acquisition Date”), Apio acquired all of the outstanding equity of GreenLine Holding Company (“GreenLine”) under a Stock Purchase Agreement (the “GreenLine Purchase Agreement”) in order to expand its product offerings and enter into new markets such a foodservice. GreenLine, headquartered in Perrysburg, Ohio, was a privately-held company and is the leading processor and marketer of value-added, fresh-cut green beans in North America. GreenLine has four processing plants one each in Ohio, Pennsylvania, Florida and California and distribution centers in New York and South Carolina.

Under the GreenLine Purchase Agreement, the aggregate consideration paid at closing consisted of $62.9 million in cash, including $4.7 million that is held in an escrow account to secure the indemnification rights of Landec with respect to certain matters, including breaches of representations, warranties and covenants. In addition, the Company may be required to pay in cash up to an additional $7.0 million in earn out payments in the event that GreenLine achieves certain revenue targets during calendar year 2012. The earn out is comprised of $4.0 million for achieving a certain revenue target during calendar year 2012, and up to an additional $3.0 million for exceeding the revenue target by $3.0 million or more. The Company has performed an analysis of projected revenues for GreenLine and has concluded that there is a more likely than not probability that GreenLine will meet, but not exceed, the initial revenue target and therefore, the Company has recorded $3.9 million, representing the present value of the fair market value of the expected earn out payment.

The operating results of GreenLine are included in the Company’s financial statements beginning April 23, 2012, in the Food Products Technology operating segment. Included in the Company’s results for the fiscal year 2012 was $9.1 million of GreenLine's net sales.

The following table provides unaudited pro forma results of operations of the Company for fiscal years 2012 and 2011 as if the acquisition of GreenLine had occurred as of the beginning of each of the fiscal periods presented.

The unaudited pro forma results include certain recurring purchase accounting adjustments such as depreciation and amortization expense on acquired tangible and intangible assets and assumed interest costs. However, unaudited pro forma results do not include certain transaction-related costs including the effect of a step-up of the value of acquired inventory, cost savings or other effects of potential integration of GreenLine. Accordingly, such results of operations are not necessarily indicative of the actual results as if the acquisition had occurred at the beginning of the dates indicated or that may result in the future.

	Year ended May 27, 2012		Year ended May 29, 2011
(in thousands)
Pro forma revenues	$	401,766	$	368,831
Pro forma net income	$	14,324	$	6,766
Basic net income per share	$	0.55	$	0.26
Diluted net income per share	$	0.55	$	0.25

These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of GreenLine to reflect the adjustments to depreciation expense and amortization expense assuming the fair value adjustments to property and equipment and intangible assets had been applied on May 31, 2010 and the adjustments to interest expense on long-term debt entered into in conjunction with the acquisition as if the debt had been borrowed on May 31, 2010. The proforma adjustments were tax affected at the Company’s effective tax rate for the periods presented. For the fiscal year ended May 27, 2012, the proforma net income includes actual expenses at GreenLine incurred prior to the close of the acquisition of $2.7 million for writing-off a related party receivable and for direct acquisition related expenses, primarily professional services and legal expenses.

The acquisition date fair value of the total consideration transferred was $66.8 million, which consisted of the following (in thousands):

Cash	$	62,900
Contingent consideration		3,926
Total	$	66,826

The assets and liabilities of GreenLine were recorded at their respective estimated fair values as of the date of the acquisition using generally accepted accounting principles for business combinations. The excess of the purchase price over the fair value of the net identifiable assets acquired has been allocated to goodwill. Goodwill represents a substantial portion of the acquisition proceeds because of the workforce in-place at acquisition and because of GreenLine’s long history and future prospects. Management believes that there is further growth potential by extending GreenLine’s product lines into new channels, such as club stores.

The following table summarizes the estimated fair values of GreenLines assets acquired and liabilities assumed and related deferred income taxes, effective April 23, 2012, the date the Company obtained control of GreenLine (in thousands).

Accounts receivable, net	$	7,057
Inventories, net		1,409
Property and equipment		11,669
Other tangible assets		306
Intangible assets		43,500
Total identifiable assets acquired		63,941
Accounts payable and other liabilities		(8,391	)
Deferred taxes		(1,882	)
Total liabilities assumed		(10,273	)
Net identifiable assets acquired		53,668
Goodwill		13,158
Net assets acquired	$	66,826

The Company used a combination of the market and cost approaches to estimate the fair values of the GreenLine assets acquired and liabilities assumed. During the measurement period (which is not to exceed one year from the acquisition date), the Company is required to retrospectively adjust the provisional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date.

Inventory

Inventory of $86,000 was recorded in the allocation of the purchase price based on the market value of the inventories less the estimated costs to sell the inventories. During fiscal year 2012, all of the step up was charged to cost of product sales as the inventories were sold before fiscal year ended May 27, 2012.

Intangible Assets

The fair value of indefinite and finite-lived intangible assets was determined using a DCF model, under an income valuation methodology, based on management’s five-year projections of revenues, gross profits and operating profits by fiscal year and assumes a 40% effective tax rate for each year. Management takes into account the historical trends of GreenLine and the industry categories in which GreenLine operates along with inflationary factors, current economic conditions, new product introductions, cost of sales, operating expenses, capital requirements and other relevant data when developing its projection. The Company believes that the level and timing of cash flows appropriately reflect market participant assumptions. The projected cash flows from these intangibles were based on key assumptions such as estimates of revenues and operating profits related to the intangibles over their respective forecast periods. The resultant cash flows were then discounted using a rate the Company believes is appropriate given the inherent risks associated with each intangible asset and reflect market participant assumptions.

The Company identified two intangible assets in connection with the GreenLine acquisition: trade names and trademarks valued at $36.0 million, which is considered to be an indefinite life asset and therefore, will not be amortized; and customer base valued at $7.5 million with a thirteen year useful life. The trade name/trademark intangible asset was valued using the relief from royalty valuation method and the customer relationship intangible asset was valued using the distributor method.

Goodwill

The excess of the consideration transferred over the fair values assigned to the assets acquired and liabilities assumed was $13.2 million, which represents the goodwill amount resulting from the acquisition which can be attributable to GreenLine’s long history, future prospects and the expected operating synergies from combining GreenLine with our Apio fresh-cut, value-added vegetable business. None of the goodwill is expected to be deductible for income tax purposes. The Company will test goodwill for impairment on an annual basis or sooner, if indicators of impairment are present. As of May 27, 2012, there have been no changes to the amount of goodwill initially recognized upon the acquisition of GreenLine.

Liability for Contingent Consideration

In addition to the cash consideration paid to the former shareholder of GreenLine, the Company may be required to pay up to an additional $7.0 million in earn out payments based on GreenLine achieving certain revenue targets in calendar year 2012. The fair value of the liability for the contingent consideration recognized on the acquisition date was $3.9 million and is classified as a non-current liability in the Consolidated Balance Sheets as of May 27, 2012. The Company determined the fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The Company expects to pay $4.0 million of the potential earn out during the third quarter of fiscal year 2013.

Deferred Tax Liabilities

The $1.9 million of net deferred tax liabilities resulting from the acquisition was primarily related to the difference between the book basis and tax basis of the intangible assets and net operating losses that were assumed by the Company in the acquisition.

‘Acquisition-Related Transaction Costs

The Company recognized $1.4 million of acquisition-related expenses that were expensed in the year ended May 27, 2012 and are included in other operating expenses in the Consolidated Statements of Income for the year ended May 27, 2012. These expenses included investment banker fees, legal, accounting and tax service fees and appraisals fees.

Lifecore Biomedical, Inc.

On April 30, 2010, the Company acquired all of the common stock of Lifecore Biomedical, Inc. (“Lifecore”) under a Stock Purchase Agreement (“Lifecore Purchase Agreement”) in order to expand its product offerings and enter into new markets. Lifecore was a privately-held hyaluronan-based biomaterials company located in Chaska, Minnesota. Lifecore is principally involved in the development and manufacture of products utilizing hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellular matrix of connective tissues in both animals and humans.

Under the Lifecore Purchase Agreement, the Company paid to the former Lifecore stockholder at closing $40.0 million in cash, which included $6.6 million held in an escrow account. Half of the escrow or $3.3 million was released and paid to the former Lifecore shareholder in May 2011, the other half was released and paid to the former Lifecore shareholder in May 2012. In addition to the cash consideration paid to the former shareholder of Lifecore, the Lifecore Purchase Agreement included an earn out payment of up to an additional $10.0 million based on Lifecore achieving certain revenue targets in calendar years 2011 and 2012. These revenue targets where achieved in calendar year 2011 and the $10.0 million earn out payment was paid by the Company to the former shareholder of Lifecore on May 29, 2012.

Note 3 - Investments in Non-Public Companies

12 Months Ended

May 27, 2012

Investment Holdings [Text Block]

3. Investments in non-public companies

In December 2005, Landec entered into an exclusive licensing agreement with Aesthetic Sciences for the exclusive rights to use Landec's IntelimerÒ materials technology for the development of dermal fillers worldwide under the agreement. The Company received shares of preferred stock in exchange for the license with a valuation of $1.8 million. Aesthetic Sciences sold the rights to its Smartfil™ Injector System on July 16, 2010. Landec has evaluated its investment in Aesthetic Sciences for impairment, utilizing a discounted cash flow analysis under the terms of the purchase agreement. Based on the terms of the sale, the Company determined that its investment was other than temporarily impaired and therefore recorded an impairment charge of $1.0 million as of May 30, 2010. The Company’s carrying value of its investment in Aesthetic Sciences is $793,000 as of May 27, 2012 and May 29, 2011. No additional impairment has been determined for the Company’s investment in Aesthetic Sciences.

On February 15, 2011, Apio entered into a share purchase agreement (the “Windset Purchase Agreement”) with Windset. Pursuant to the Purchase Agreement, Apio purchased 150,000 senior preferred shares for $15 million and 201 common shares for $201 that were issued by Windset (the “Purchased Shares”). The Company’s common shares represent a 20.1% interest in Windset. The non-voting senior preferred shares yield a cash dividend of 7.5% annually. The dividend is payable within 90 days of each anniversary of the execution of the Purchase Agreement, the first dividend payment of $1.1 million was made in May 2012. The Windset Purchase Agreement includes a put and call option, which can be exercised on the sixth anniversary of the Windset Purchase Agreement whereby Apio can exercise the put to sell its Purchased Shares to Windset, or Windset can exercise the call to purchase the Purchased Shares from Apio, in either case, at a price equal to 20.1% of the appreciation in the fair market value of Windset from the date of the Company’s investment through the put and call date, plus the purchase

price of the Purchased Shares. Under the terms of the arrangement with Windset, the Company is entitled to designate one of five members on the Board of Directors of Windset.

In accordance with accounting guidance, 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 available to the common stock holders. As the put and call options require the Purchased 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 Company has adopted fair value option in the accounting for its investment in Windset effective on the acquisition date. The fair value of the Company’s investment in Windset utilizes significant unobservable inputs in the discounted cash flow models, including projected cash flows, growth rates and the discount rate, and is therefore considered a Level 3 for fair value measurement purposes (see Note 1). The Company believes that reporting its investment at fair value provides its investors with useful information on the performance of the Company’s investment and the anticipated appreciation in value as Windset expands its business.

The fair value of the Company’s investment in Windset was determined utilizing 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 flow utilized to derive the estimated fair value of the investment. Assumptions included in the discounted cash flow model will be evaluated quarterly based on Windset’s actual and projected operating results to determine the change in fair value.

During fiscal year 2012, the Company recorded and received in cash $1.1 million in dividend income and the Company recorded $5.8 million of income, which is included in other income in the Consolidated Statements of Income, from the increase in the fair market value of the Company’s investment in Windset for the twelve months ended May 27, 2012. From the close of the Windset Purchase Agreement on February 15, 2011 to May 29, 2011, the Company recorded $328,000 in dividend income and $662,000 from the increase in the fair market value of the Company’s investment in Windset.

The Company also entered into an exclusive license agreement with Windset, which was executed in June 2010, prior to contemplation of Apio’s investment in Windset (see Note 4).

Note 4 - License Agreements

12 Months Ended

May 28, 2012

License Agreements [Text Block]

4. License Agreements

Monsanto

On December 1, 2006, Landec entered into a five-year co-exclusive technology license and polymer supply agreement (“the Monsanto Agreement”) with Monsanto Company (“Monsanto”) for the use of Landec’s Intellicoat polymer seed coating technology. Under the terms of the Monsanto Agreement, Monsanto agreed to pay Landec Ag $2.6 million per year. The Monsanto Agreement was amended in November 2009. Under the terms of the amended Monsanto Agreement, Monsanto continued to have an exclusive license to use Landec’s Intellicoat polymer technology for specific seed treatment applications. Along with regaining the use of the Intellicoat technology outside of the specific applications licensed to Monsanto under the amended Monsanto Agreement, Landec also assumed responsibility for Landec Ag’s operating expenses and realizes all the revenues and profits from the sales of existing and new Intellicoat seed coating products.

Prior to the expiration of the Monsanto Agreement, Monsanto informed the Company that it intended to allow the Monsanto Agreement to expire in accordance with its terms on December 1, 2011 and therefore, Monsanto did not exercise its purchase option. Upon termination, Monsanto paid Landec Ag a $4.0 million termination fee and all rights to the Intellicoat seed coating technology reverted to Landec.

For fiscal years 2012, 2011 and 2010, Landec recognized license revenues from the Monsanto Agreement of $2.7 million, $5.4 million and $5.4 million, respectively.

Air Products

In March 2006, Landec entered into an exclusive license and research and development agreement with Air Products and Chemicals, Inc. (“Air Products”). In accordance with the agreement, Landec receives 40% of the direct profit generated from the sale of products by Air Products occurring after April 1, 2007, that incorporate Landec’s Intelimer materials.

Chiquita

In September 2007, the Company amended its licensing and supply agreement with Chiquita Brands International, Inc. (“Chiquita”). Under the terms of the amendment, the license for bananas was expanded to include additional exclusive fields using Landec’s BreatheWay® packaging technology, and a new exclusive license was added for the sale and marketing of avocados and mangos using Landec’s BreatheWay packaging technology. The agreement with Chiquita, which Chiquita has elected to renew for another five years through December 2016, requires Chiquita to pay annual gross profit minimums to Landec in order for Chiquita to maintain its exclusive license for bananas, avocados and mangos. Under the terms of the agreement, Chiquita must notify Landec before December 1st of each year whether it is going to maintain its exclusive license for the following calendar year and thus agree to pay the minimums for that year. Landec was notified by Chiquita in November 2011 that Chiquita had chosen to maintain its exclusive license for calendar year 2012 and thus agreed at that time to pay the minimum gross profit for calendar year 2012.

Windset

In June 2010, Apio entered into an exclusive license agreement with Windset for Windset to utilize Landec’s proprietary breathable packaging to extend the shelf life of greenhouse grown cucumbers, peppers and tomatoes (“Exclusive Products”). In accordance with the agreement, Apio received and recorded a one-time upfront research and development fee of $100,000 and will receive license fees equal to 3% of net revenue of the Exclusive Products utilizing the proprietary breathable packaging technology, with or without the BreatheWay® trademark. The ongoing license fees are subject to annual minimums of $150,000 for each of the three types of exclusive product as each is added to the agreement. As of May 27, 2012, one product has been added to the agreement and the minimum payment of $150,000 for that product was received by the Company in April 2012.

Note 5 - Property and Equipment

12 Months Ended

May 27, 2012

Property, Plant and Equipment Disclosure [Text Block]

5. Property and Equipment

Property and equipment consists of the following (in thousands):

	Years of
	Useful Life			May 27, 2012			May 29, 2011
Land and building	15	-	30	$	51,993		$	43,885
Leasehold improvements	3	-	20		1,103			1,082
Computer, capitalized software, machinery, equipment and auto	3	-	7		43,094			35,024
Furniture and fixtures	5	-	7		551			513
Construction in process					727			6
Gross property and equipment					97,468			80,510
Less accumulated depreciation and amortization					(33,973	)		(28,731	)
Net property and equipment				$	63,495		$	51,779

Depreciation and amortization expense for property and equipment for the fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010 was $5.3 million, $5.0 million and $3.4 million, respectively. Equipment under capital leases totaled $158,000 at May 27, 2012 and the related accumulated amortization as of May 27, 2012 was zero as these leases were assumed in the acquisition of GreenLine on April 23, 2012. There were no capital leases as of May 29, 2011. Amortization related to capitalized software was $136,000, $136,000 and $39,000 for fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010, respectively. The unamortized computer software costs at May 27, 2012 and May 29, 2011 were $468,000 and $491,000, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Note 6 - Intangible Assets

12 Months Ended

May 27, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

6. Intangible Assets

Changes in the carrying amount of goodwill for the fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010 by reportable segment, are as follows (in thousands):

	Food Products Technology		Technology Licensing			Hyaluronan-based Biomaterials		Total

Balance as of May 31, 2009	$	22,581	$	4,780		$	—	$	27,361
Goodwill acquired during the period		—		—			13,793		13,793
Balance as of May 30, 2010		22,581		4,780			13,793		41,154
Goodwill acquired/reclassified during the period		—		—			88		88
Goodwill impaired during the period		—		(4,780	)		—		(4,780	)
Balance as of May 29, 2011		22,581		—			13,881		36,462
Goodwill acquired during the period		13,158		—			—		13,158
Balance as of May 27, 2012	$	35,739	$	—		$	13,881	$	49,620

Information regarding Landec’s other intangible assets is as follows (in thousands):

	Trademarks & Trade names		Customer Relationships			Total
Balance as of May 31, 2009	$	8,228	$	—		$	8,228
Acquired during the period		4,200		3,700			7,900
Amortization expense		—		(26	)		(26	)
Balance as of May 30, 2010		12,428		3,674			16,102
Amortization expense		—		(308	)		(308	)
Balance as of May 29, 2011		12,428		3,366			15,794
Acquired during the period		36,000		7,500			43,500
Amortization expense		—		(309	)		(309	)
Balance as of May 27, 2012	$	48,428	$	10,557		$	58,985

Accumulated amortization as of May 27, 2012, May 29, 2011 and May 30, 2010 was $4.1 million, $3.8 million and $3.4 million, respectively. Accumulated impairment losses through May 27, 2012 were $4.8 million. Lifecore’s customer relationships amount of $3.7 million is being amortized over 12 years and GreenLine’s customer relationships amount of $7.5 million is being amortized over 13 years. The amortization expense for the next five fiscal years will be $885,000 per year.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Note 7 - Stockholders' Equity

12 Months Ended

May 27, 2012

Stockholders' Equity Note Disclosure [Text Block]

7. Stockholders’ Equity

Holders of Common Stock are entitled to one vote per share.

Convertible Preferred Stock

The Company has authorized two million shares of preferred stock, and as of May 27, 2012 has no outstanding preferred stock.

Common Stock and Stock Option Plans

At May 27, 2012, the Company had 2.8 million common shares reserved for future issuance under Landec equity incentive plans.

On October 15, 2009, following stockholder approval at the Annual Meeting of Stockholders of the Company, the 2009 Stock Incentive Plan (the “Plan”) became effective and replaced the Company’s 2005 Stock Incentive Plan. Employees (including officers), consultants and directors of the Company and its subsidiaries and affiliates are eligible to participate in the Plan.

The Plan provides for the grant of stock options (both nonstatutory and incentive stock options), stock grants, stock units and stock appreciation rights. Awards under the Plan will be evidenced by an agreement with the Plan participants and 1.9 million shares of the Company’s Common Stock (“Shares”) were initially available for award under the Plan. Under the Plan, no recipient may receive awards during any fiscal year that exceeds the following amounts: (i) stock options covering in excess of 500,000 Shares; (ii) stock grants and stock units covering in excess of 250,000 Shares in the aggregate; or (iii) stock appreciation rights covering more than 500,000 Shares. In addition, awards to non-employee directors are discretionary. However, a non-employee director may not be granted awards in excess of 30,000 Shares in the aggregate during any fiscal year. The exercise price of the options was the fair market value of the Company’s Common Stock on the date the options were granted.

On October 14, 2005, following stockholder approval at the Annual Meeting of Stockholders of the Company, the 2005 Stock Incentive Plan (“2005 Plan”) became effective. The 2005 Plan replaced the Company’s four then existing equity plans and no shares remain available for grant under those plans. Employees (including officers), consultants and directors of the Company and its subsidiaries and affiliates were eligible to participate in the 2005 Plan. The 2005 Plan provided for the grant of stock options (both nonstatutory and incentive stock options), stock grants, stock units and stock appreciation rights. Under the 2005 Plan, 861,038 Shares were initially available for awards, and as of May 27, 2012, 591,333 shares and options to purchase shares remain outstanding. The exercise price of the options was the fair market value of the Company’s Common Stock on the date the options were granted.

The 1995 Directors’ Stock Option Plan (the “Directors’ Plan”) provided that each person who became a non- employee director of the Company, who had not received a previous grant, be granted a nonstatutory stock option to purchase 20,000 shares of Common Stock on the date on which the optionee first became a non-employee director of the Company. Thereafter, on the date of each annual meeting of the stockholders each non-employee director was granted an additional option to purchase 10,000 shares of Common Stock if, on such date, he or she had served on the Company’s Board of Directors for at least six months prior to the date of such annual meeting. The exercise price of the options was the fair market value of the Company’s Common Stock on the date the options were granted. Options granted under this plan were exercisable and vested upon grant.

The 1996 Non-Executive Stock Option Plan authorized the Board of Directors to grant non-qualified stock options to employees, including executive officers, and outside consultants of the Company. The exercise price of the options was equal to the fair market value of the Company’s Common Stock on the date the options were granted. Options were generally exercisable upon vesting and generally vested ratably over four years and were subject to repurchase if exercised before being vested.

The 1996 Stock Option Plan authorized the Board of Directors to grant stock purchase rights, incentive stock options or non-statutory stock options to Landec executives. The exercise price of the stock purchase rights, incentive stock options and non-statutory stock options could be no less than 100% of the fair market value of Landec’s Common Stock on the date the options were granted. Options generally were exercisable upon vesting, generally vested ratably over four years and were subject to repurchase if exercised before being vested.

On July 14, 2010, the Board of Directors of the Company approved the establishment of a stock repurchase plan which allows for 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 fiscal year 2012, the Company repurchased on the open market 917,244 shares of its Common Stock for $5.0 million and retired those shares. During fiscal year 2011, the Company repurchased on the open market 215,684 shares of its Common Stock for $1.2 million and retired those shares.

Activity under all Landec equity incentive plans is as follows:

Stock-Based Compensation Activity

				Restricted Stock Outstanding					Stock Options Outstanding
	RSU’s and Options Available for Grant			Number of Restricted Shares			Weighted Average Grant Date Fair Value		Number of Stock Options			Weighted Average Exercise Price
Balance at May 31, 2009		75,808			177,004		$	7.88		1,932,541		$	6.19
Additional shares reserved		1,900,000			―
Granted		(1,193,022	)		307,272		$	5.80		885,750		$	5.78
Awarded/Exercised		—			(51,671	)	$	8.11		(190,962	)	$	4.32
Forfeited		—			(1,000	)	$	13.32		(1,000	)	$	13.32
Plan shares expired		―			—			—		(169,500	)	$	7.01
Terminated plan		(12,475	)		―			―		―			―
Balance at May 30, 2010		770,311			431,605		$	6.35		2,456,829		$	6.13
Granted		(129,335	)		32,335		$	6.00		97,000		$	6.00
Awarded/Exercised		—			(48,855	)	$	9.48		(217,076	)	$	3.46
Forfeited		—			—			—		(18,000	)	$	10.63
Balance at May 29, 2011		640,976			415,085		$	5.96		2,318,753		$	6.34
Granted		(191,333	)		47,833		$	6.67		143,500		$	6.67
Awarded/Exercised		—			(111,252	)	$	6.36		(371,727	)	$	5.40
Forfeited		—			(3,500	)	$	5.84		(5,657	)	$	5.76
Plan shares expired		—			—			—		(38,437	)	$	8.23
Balance at May 27, 2012		449,643			348,166		$	5.93		2,046,432		$	6.50

Upon vesting of certain RSUs and the exercise of certain options during fiscal years 2012, 2011 and 2010, certain RSUs and exercised options were net share-settled to cover the required exercise price and withholding tax and the remaining amounts were converted into an equivalent number of shares of Common Stock. The Company withheld shares with value equivalent to the exercise price for options and the employees' minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld for fiscal years 2012, 2011 and 2010 were 326,954, 136,374 and 79,263 RSUs and options, respectively, which was based on the value of the option and/or RSUs on their exercise or vesting date as determined by the Company's closing stock price. Total payments for the employees' tax obligations to the taxing authorities were approximately $290,000. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise have been issued as a result of the vesting and did not represent an expense to the Company.

The following table summarizes information concerning stock options outstanding and exercisable at May 27, 2012:

			Options Outstanding								Options Exercisable
Range of Exercise Prices			Number of Shares Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value		Number of Shares Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value
					(in years)
1.66	-	2.55		15,000		0.66	$	2.25	$	72,250		15,000	$	2.25	$	72,250
2.82	-	4.67		72,082		1.03	$	3.49	$	258,288		72,082	$	3.49	$	258,288
5.63	-	5.63		667,406		4.99	$	5.63	$	961,065		445,257	$	5.63	$	641,170
5.65	-	6.22		514,944		4.48	$	6.16	$	471,065		437,730	$	6.17	$	395,032
6.35	-	8.86		694,000		3.44	$	7.17	$	195,875		567,493	$	7.29	$	139,673
13.32	-	13.32		83,000		2.09	$	13.32	$	—		83,000	$	13.32	$	—
1.66	-	13.32		2,046,432		4.05	$	6.50	$	1,958,543		1,620,562	$	6.62	$	1,506,413

The weighted average remaining contractual life of options exercisable as of May 27, 2012 was 3.65 years.

At May 27, 2012 and May 29, 2011 options to purchase 1,620,562 and 1,588,187 shares of Landec’s Common Stock were vested, respectively. No options have been exercised prior to being vested. The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on the Company’s closing stock price of $7.07 on May 25, 2012, which would have been received by holders of stock options had all holders of stock options exercised their stock options that were in-the-money as of that date. The total number of in-the-money stock options exercisable as of May 27, 2012, was 1,311,156 shares. The aggregate intrinsic value of stock options exercised during the fiscal year 2012 was $438,000.

Shares Subject to Vesting

The following table summarizes the activity relating to unvested stock option grants and RSUs during the fiscal year ended May 27, 2012:

	Stock Options					Restricted Stock
	Shares			Weighted Average Fair Value		Shares			Weighted Average Fair Value
Unvested at May 29, 2011		730,566		$	2.69		415,085		$	5.96
Granted		143,500		$	2.65		47,833		$	6.67
Vested/Awarded		(442,539	)	$	2.89		(111,252	)	$	6.36
Forfeited		(5,657	)	$	5.76		(3,500	)	$	5.84
Unvested at May 27, 2012		425,870		$	2.43		348,166		$	5.93

As of May 27, 2012, there was $1.9 million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Company’s incentive stock plans. Total expense is expected to be recognized over the weighted-average period of 1.8 years for stock options and 1.6 years for restricted stock awards.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Number 210
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+ Details

Note 8 - Debt

12 Months Ended

May 27, 2012

Debt Disclosure [Text Block]

8. Debt

Long-term debt consists of the following (in thousands):

	May 27, 2012			May 29, 2011
Real estate loan agreement with General Electric Capital Corporation (“GE Capital”); due in monthly principal and interest payments of $133,060 through May 1, 2022 with interest based on a fixed rate of 4.02% per annum	$	17,957		$	—
Real estate bridge loan agreement with GE Capital; due in monthly principal and interest payments of $8,902 with a lump sum final principal payment due on May 1, 2013 with interest based on a fixed rate of 4.02% per annum		1,200			—
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $175,356 through May 1, 2019 with interest based on a fixed rate of 4.39% per annum		12,660			—
Term note with BMO Harris; due in monthly payments of $250,000 through May 23, 2016 with interest payable monthly at LIBOR plus 2% per annum		12,000			—
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 (0.42% and 0.40% at May 27, 2012 and May 29, 2011, respectively)		3,500			3,830
Credit agreement with Wells Fargo; due in monthly payments of $333,333 through April 30, 2015 with interest payable monthly at Libor plus 2% per annum		—			16,000
Total		47,317			19,830
Less current portion		(7,012	)		(4,330	)
Long-term portion	$	40,305		$	15,500

The future minimum principal payments of the Company’s debt for each year presented are as follows (in thousands):

	GE RE Loans		GE Equipment		BMO Harris		IRB		Total
FY 2013	$	2,091	$	1,581	$	3,000	$	340	$	7,012
FY 2014		928		1,651		3,000		355		5,934
FY 2015		966		1,725		3,000		365		6,056
FY 2016		1,005		1,801		3,000		375		6,181
FY 2017		1,047		1,882		—		390		3,319
Thereafter		13,120		4,020		—		1,675		18,815
Total	$	19,157	$	12,660	$	12,000	$	3,500	$	47,317

In addition to entering into the GE real estate and equipment loans mentioned above, on April 23, 2012 in connection with the acquisition of GreenLine, Apio also entered into a five-year, $25.0 million asset-based working capital revolving line of credit, with an interest rate of LIBOR plus 2%, with availability based on the combination of the eligible accounts receivable and eligible inventory. Apio’s revolving line of credit has an unused fee of 0.375% per annum. At May 27, 2012, Apio had $11.7 million outstanding under its revolving line of credit.

The GE real estate, equipment and line of credit agreements (collectively the “GE Debt Agreements”) are secured by liens on all of the property of Apio and its subsidiaries. The GE Debt Agreements contain customary events of default under which obligations could be accelerated or increased. The GE Debt Agreements are guaranteed by Landec and Landec has pledged its equity interest in Apio as collateral under the agreements. Apio was in compliance with all financial covenants as of May 27, 2012. Loan origination fees for the GE Debt Agreements were $1.3 million at May 27, 2012 and are included in other assets in the Consolidated Balance Sheets.

On May 23, 2012, Lifecore entered into two financing agreements with BMO Harris Bank N.A. and/or its affiliates (“BMO Harris”), collectively (the “Lifecore Loan Agreements”):

A Credit and Security Agreement (the “Credit Agreement”) which includes (a) a one-year, $8.0 million asset-based working capital revolving line of credit, with an interest rate of LIBOR plus 1.85%, with availability based on the combination of Lifecore’s eligible accounts receivable and inventory balances and with no unused fee (at May 27, 2012, no amounts were outstanding under the line of credit) and (b) a $12.0 million term loan which matures in four years due in monthly payments of $250,000 with interest payable monthly based on a variable interest rate of LIBOR plus 2% (the “Term Loan”).

A Reimbursement Agreement pursuant to which BMO Harris caused its affiliate Bank of Montreal to issue an irrevocable letter of credit in the amount of $3.5 million (the “Letter of Credit”) which is securing the IRB described below.

The obligations of Lifecore under the Lifecore Loan Agreements are secured by liens on all of the property of Lifecore. The Lifecore Loan Agreements contain customary covenants, such as limitations on the ability to (1) incur indebtedness or grant liens or negative pledges on Lifecore’s assets; (2) make loans or other investments; (3) pay dividends or repurchase stock or other securities; (4) sell assets; (5) engage in mergers; (6) enter into sale and leaseback transactions; (7) adopt certain benefit plans; and (8) make changes in Lifecore’s corporate structure. In addition, under the Credit Agreement, Lifecore must maintain (a) a minimum fixed charge coverage ratio of 1.10 to 1.0 and a minimum quick ratio of 1.25 to 1.00, both of which must be satisfied as of the end of each fiscal quarter commencing with the fiscal quarter ending August 26, 2012 and (b) a minimum tangible net worth of $29,000,000, measured as of May 28, 2013, and as of the end of each fiscal year thereafter. Loan origination fees for the Lifecore Loan Agreements were $139,000 as of May 27, 2012 and are included in other assets in the Consolidated Balance Sheets.

The Term Loan was used to repay Lifecore’s former credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”). The Letter of Credit (which replaces a letter of credit previously provided by Wells Fargo) provides liquidity

and credit support for the IRBs.

On August 19, 2004, Lifecore issued variable rate industrial revenue bonds (“IRBs”). These IRBs were assumed by Landec in the acquisition of Lifecore (see Note 2). The IRBs are collateralized by a bank letter of credit which is secured by a first mortgage on the Company’s facility in Chaska, Minnesota. In addition, the Company pays an annual remarketing fee equal to 0.125% and an annual letter of credit fee of 0.75%. The maturities on the IRBs are held in a sinking fund account, recorded in Other Current Assets in the accompanying Consolidated Balance Sheets, and are paid out each year on September 1st.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Note 9 - Derivative Financial Instruments

12 Months Ended

May 27, 2012

Derivative Instruments and Hedging Activities Disclosure [Text Block]

9. Derivative Financial Instruments

In May 2010, the Company entered into a five-year interest rate swap agreement under the credit agreement with Wells Fargo which expires on April 30, 2015. The interest rate swap was designated as a cash flow hedge of future interest payments of LIBOR and had a notional amount of $20 million. As a result of the interest rate swap transaction, the Company fixed for a five-year period the interest rate at 4.24% subject to market based interest rate risk on $20 million of borrowings under the credit agreement with Wells Fargo. The Company’s obligations under the interest rate swap transaction as to the scheduled payments were guaranteed and secured on the same basis as is its obligations under the credit agreement with Wells Fargo at the time the agreement was consummated. As mentioned in Note 8, upon entering into the new Term Loan with BMO Harris the Company used the proceeds from that loan to

pay off the Wells Fargo credit facility. The swap with Wells Fargo was not terminated upon the extinguishment of the debt with Wells Fargo. As a result of extinguishing the debt with Wells Fargo as of May 23, 2012, the swap was no longer an effective hedge and therefore, the fair value of the swap at the time the debt was extinguished of $347,000 was reversed from other comprehensive income and recorded in other expense. The fair value of the swap arrangement at May 27, 2012 of $347,000 is included in other accrued liabilities in the accompanying balance sheet.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

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+ Details

Note 10 - Income Taxes

12 Months Ended

May 27, 2012

Income Tax Disclosure [Text Block]

10. Income Taxes

The provision for income taxes consisted of the following (in thousands):

	Year ended			Year ended			Year ended
	May 27, 2012			May 29, 2011			May 30, 2010
Current:
Federal	$	4,597		$	881		$	844
State		(586	)		176			170
Foreign		56			—			—
Total		4,067			1,057			1,014
Deferred:
Federal		2,641			3,140			3,186
State		477			(16	)		62
Total		3,118			3,124			3,248
Income tax expense	$	7,185		$	4,181		$	4,262

The actual provision for income taxes differs from the statutory U.S. federal income tax rate as follows (in thousands):

	Year Ended May 27, 2012			Year Ended May 29, 2011			Year Ended May 30, 2010
Provision at U.S. statutory rate (1)	$	6,958		$	2,835		$	2,886
State income taxes, net of federal benefit		451			213			217
Goodwill impairment charge		—			1,849			—
Change in valuation allowance		1			(7	)		390
Tax-exempt interest		(40	)		(115	)		(209	)
Tax credit carryforwards		(368	)		(637	)		(102	)
Transaction Costs		322			—			982
Domestic Manufacturing Deduction		(208	)		—			—
Other		69			43			98
Total	$	7,185		$	4,181		$	4,262

(1) Statutory rate was 35% for fiscal years 2012, 2011 and 2010.

The increase in the income tax expense in fiscal year 2012 compared to fiscal year 2011 is due to a 187% increase in taxable income partially offset by a decrease in the Company’s effective tax rate to 36% down from 52% in fiscal year 2011, the increase in taxable income over prior year is attributable to a 140% increase in net income before taxes. The decrease in the income tax expense in fiscal year 2011 compared to fiscal year 2010 is due to a 2% decrease in taxable income partially offset by an increase in the Company’s effective tax rate to 52% in fiscal year 2011 up from 51% in fiscal year 2010.

The effective tax rates for fiscal year 2012 differ from the statutory federal income tax rate of 35 percent as a result of several factors, including state taxes, non-deductible stock-based compensation expense, tax exempt interest, domestic manufacturing deduction and the benefit of federal and state research and development credits and accounting for transaction costs associated with the GreenLine acquisition in fiscal year 2012. The effective tax rates for fiscal year 2011 differ from the statutory federal income tax rate of 35 percent as a result of several factors, including state taxes, non-deductible stock-based compensation expense, tax exempt interest and the goodwill impairment charge. In addition to the above, the Company was able to further reduce the effective tax rate for fiscal

year 2011 as a result of being a recipient of a therapeutic drug credit award and the extension of the federal research and development credit. The effective tax rates for the fiscal year 2010 differ from the statutory federal income tax rate of 35 percent as a result of several factors, including state taxes, non-deductible stock-based compensation expense, tax exempt interest and accounting for transaction costs associated with the Lifecore acquisition in fiscal year 2010.

Significant components of deferred tax assets and liabilities consisted of the following (in thousands):

	May 27, 2012			May 29, 2011
Deferred tax assets:
Net operating loss carryforwards	$	3,954		$	6
Research and AMT credit carryforwards		328			892
Accruals and reserves, not currently deductible for tax		2,191			627
Stock-based compensation		981			837
Other		428			396
Gross deferred tax assets		7,882			2,758
Valuation allowance		(419	)		(383	)
Net deferred tax assets		7,463			2,375

Deferred tax liabilities:
Basis difference in trading securities		(2,510	)		(253	)
Depreciation and amortization		(5,575	)		(4,293	)
Goodwill and other indefinite life intangibles		(15,339	)		(8,625	)
Deferred tax liabilities		(23,424	)		(13,171	)

Net deferred tax (liabilities) assets	$	(15,961	)	$	(10,796	)

Valuation allowances are reviewed each period on a tax jurisdiction by jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets. Based on this analysis and considering all positive and negative evidence, we determined that a valuation allowance of $419,000 and $383,000 as of May 27, 2012 and May 29, 2011, respectively, should be recorded as a result of a book impairment loss on the Company’s investment in Aesthetic Sciences as it is more likely than not that a portion of the deferred tax asset will not be realized in the foreseeable future. The valuation allowance increase of $36,000 from the prior year was due to a change in the Company’s apportionment.

As of May 27, 2012, the Company had federal, California and other state net operating loss carryforwards of approximately $9.3 million, $6.1 million and $12.2 million, respectively. These losses expire in different periods through 2031, if not utilized. Such net operating losses consist of excess tax benefits from employee stock option exercises and have not been recorded in the Company’s deferred tax assets. The Company will record approximately $6.1 million of the gross California net operating loss as a credit to additional paid in capital as and when such excess tax benefits are ultimately realized. The Company acquired additional net operating losses through the acquisition of GreenLine. Utilization of these acquired net operating losses in a specific year is limited due to the “change in ownership” provision of the Internal Revenue Code of 1986 and similar state provisions. The net operating losses presented above for federal and state purposes is net of any such limitation.

The Company also had federal and state research and development tax credits carryforwards of approximately $2.2 million and $800,000, respectively. The research and development tax credit carryforwards expire in different periods through 2032 for federal purposes and have an unlimited carryforward period for state purposes. The Company also has a federal therapeutic drug tax credit carryforward of $244,000 that will expire in 2030. Furthermore, the Company has federal alternative minimum tax credits of approximately $900,000 that can be carried forward indefinitely. Certain tax credit carryovers are attributable to excess tax benefits from employee stock option exercises and have not been recorded in the Company’s deferred tax assets. The Company will record $3.3 million of the above Federal credit and $188,000 of the gross California credit will be recorded to additional paid in capital as and when such excess tax benefits are ultimately realized.

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and the derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	As of
	May 27, 2012			May 29, 2011			May 30, 2010
Unrecognized tax benefits – beginning of the period	$	760		$	868		$	619
Gross increases – tax positions in prior period		1			280			138
Gross decreases – tax positions in prior period		(1	)		(310	)		(203	)
Gross increases – current-period tax positions		246			75			332
Settlements		—			—			(18	)
Lapse of statute of limitations		(240	)		(153	)		—
Unrecognized tax benefits – end of the period	$	766		$	760		$	868

The unrecognized tax benefits at May 27, 2012, May 29, 2011 and May 30, 2010 were $766,000, $760,000 and $868,000, of which $593,000, $601,000 and $708,000, respectively, will impact the effective tax rate. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties and interest is not significant as of May 27, 2012. Additionally, the Company expects its unrecognized tax benefits related to the expiration of tax attributes to change by $8,000 within the next 12 months.

Due to tax attribute carryforwards, the Company is subject to examination for tax years 1997 and later for U.S. tax purposes. The Company was also subject to examination in various state jurisdictions for tax years 1998 and later, none of which were individually material.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

+ Details

Note 11 - Commitments and Contingencies

12 Months Ended

May 27, 2012

Commitments and Contingencies Disclosure [Text Block]

11. Commitments and Contingencies

Operating Leases

Landec leases facilities and equipment under operating lease agreements with various terms and conditions, which expire at various dates through fiscal year 2019.

The approximate future minimum lease payments under these operating leases, excluding land leases, at May 27, 2012 are as follows (in thousands):

	Amount
FY2013	$	1,543
FY2014		1,210
FY2015		892
FY2016		717
FY2017		508
Thereafter		371
	$	5,241

Rent expense for operating leases, including month to month arrangements was $1.5 million for the fiscal year ended May 27, 2012, $1.2 million for the fiscal year ended May 29, 2011 and $1.5 million for the fiscal year ended May 30, 2010.

Capital Leases

Landec leases equipment under capital lease agreements with various terms and conditions, which expire at various dates through fiscal year 2013 and the minimum lease payment for 2013 is $158,000.

Employment Agreements

Landec has entered into employment agreements with certain key employees. These agreements provide for these employees to receive incentive bonuses based on the financial performance of certain divisions in addition to their annual base salaries. The accrued incentive bonuses amounted to $1.6 million at May 27, 2012 and $347,000 at May 29, 2011.

Purchase Commitments

At May 27, 2012, the Company was committed to purchase $1.9 million of produce during fiscal year 2013 in accordance with contractual terms at market rates. Payments of $8.7 million were made in fiscal year 2012 under these arrangements.

Loss Contingencies

As of May 27, 2012, the Company is not a party to any legal proceedings.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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+ Details

Note 12 - Employee Savings and Investment Plans

12 Months Ended

May 27, 2012

Compensation and Employee Benefit Plans [Text Block]

12. Employee Savings and Investment Plans

The Company sponsors a 401(k) plan which is available to substantially all of the Company’s employees. Landec’s Corporate Plan, which is available to all Landec employees (“Landec Plan”), allows participants to contribute from 1% to 50% of their salaries, up to the Internal Revenue Service (IRS) limitation into designated investment funds. In June 2006, the Company amended the plan to increase the company match from 50% on the first 6% contributed by an employee to 67% on the first 6% contributed. Participants are at all times fully vested in their contributions. The Company's contribution vests annually over a four-year period at a rate of 25% per year. The Company retains the right, by action of the Board of Directors, to amend, modify, or terminate the plan. For the fiscal years ended May 27, 2012, May 29, 2011 and May 30, 2010, the Company contributed $789,000, $720,000 and $368,000, respectively, to the Landec Plan.

Note 13 - Business Segment Reporting

12 Months Ended

May 27, 2012

Segment Reporting Disclosure [Text Block]

13. Business Segment Reporting

The Company manages its business operations through four 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 Food Products Technology segment, the Food Export segment, the Hyaluronan-based Biomaterials segment and the Technology Licensing segment.

The Food Products Technology segment markets and packs specialty packaged whole and fresh-cut vegetables that incorporate the BreatheWay specialty packaging for the retail grocery, club store and food services industry. In addition, the Food Products Technology segment sells BreatheWay packaging to partners for non-vegetable products. The Food Export segment consists of revenues generated from the purchase and sale of primarily whole commodity fruit and vegetable products to Asia and domestically. The HA-based 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 for medical use primarily in the Ophthalmic, Orthopedic and Veterinary markets. The Technology Licensing segment licenses Landec’s patented Intellicoat seed coatings to the farming industry and licenses the Company’s Intelimer polymers for personal care products and other industrial products. Corporate includes corporate general and administrative expenses, non Food Products Technology and non HA-based Biomaterials interest income and Company-wide 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):

	May 27, 2012		May 29, 2011		May 30, 2010
Taiwan	$	22.7	$	21.3	$	20.3
Indonesia	$	23.0	$	20.2	$	13.7
Canada	$	20.8	$	18.4	$	15.5
Belgium	$	15.6	$	16.7	$	0.3
Japan	$	11.1	$	8.4	$	8.8
All Other Countries	$	21.3	$	18.8	$	10.0

Operations by segment consisted of the following (in thousands):

Fiscal Year Ended May 27, 2012	Food Products Technology		Food Export		Hyaluronan-based Biomaterials		Technology Licensing			Corporate			TOTAL
Net sales	$	207,582	$	71,485	$	34,283	$	4,202		$	—		$	317,552
International sales	$	20,528	$	71,054	$	22,904	$	—		$	—		$	114,486
Gross profit	$	25,237	$	4,900	$	17,994	$	4,007		$	—		$	52,138
Net income (loss)	$	17,527	$	2,269	$	7,672	$	(269	)	$	(14,503	)	$	12,696
Identifiable assets	$	169,541	$	18,425	$	81,927	$	7,713		$	86		$	277,692
Depreciation and amortization	$	3,191	$	7	$	2,242	$	181		$	—		$	5,621
Capital expenditures	$	2,498	$	—	$	2,798	$	75		$	—		$	5,371
Dividend income	$	1,125	$	—	$	—	$	—		$	—		$	1,125
Interest income	$	30	$	—	$	129	$	—		$	21		$	180
Interest expense	$	178	$	—	$	751	$	—		$	—		$	929
Income tax expense	$	—	$	—	$	—	$	—		$	7,185		$	7,185

Fiscal Year Ended May 29, 2011
Net sales	$	175,664	$	61,663	$	32,505	$	6,897		$	—		$	276,729
International sales	$	18,580	$	61,214	$	24,024	$	—		$	—		$	103,818
Gross profit	$	18,888	$	3,901	$	17,231	$	6,675		$	—		$	46,695
Net income (loss)	$	8,200	$	1,617	$	7,278	$	(2,504	)	$	(10,671	)	$	3,920
Identifiable assets	$	88,241	$	16,320	$	83,954	$	7,527		$	10,270		$	206,312
Depreciation and amortization	$	3,174	$	8	$	1,972	$	159		$	—		$	5,313
Capital expenditures	$	3,620	$	—	$	2,817	$	247		$	—		$	6,684
Dividend income	$	328	$	—	$	—	$	—		$	—		$	328
Interest income	$	129	$	—	$	164	$	—		$	137		$	430
Interest expense	$	2	$	—	$	818	$	—		$	—		$	820
Income tax expense	$	—	$	—	$	—	$	—		$	4,181		$	4,181
Impairment charges	$	—	$	—	$	—	$	4,780		$	—		$	4,780

Fiscal Year Ended May 30, 2010
Net sales	$	175,046	$	54,926	$	1,457	$	6,795	$	—		$	238,224
International sales	$	15,714	$	52,319	$	603	$	—	$	—		$	68,636
Gross profit	$	22,514	$	3,906	$	815	$	6,531	$	—		$	33,766
Net income (loss)	$	11,051	$	1,789	$	13	$	2,647	$	(11,516	)	$	3,984
Identifiable assets	$	75,280	$	13,979	$	79,604	$	11,848	$	19,486		$	200,197
Depreciation and amortization	$	3,055	$	8	$	141	$	160	$	—		$	3,364
Capital expenditures	$	4,212	$	—	$	739	$	241	$	—		$	5,192
Interest income	$	223	$	—	$	8	$	—	$	603		$	834
Interest expense	$	12	$	—	$	76	$	—	$	—		$	88
Income tax expense	$	—	$	—	$	—	$	—	$	4,262		$	4,262
Impairment charges	$	—	$	—	$	—	$	1,000	$	—		$	1,000

- Definition

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.

+ References

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+ Details

Note 14 - Quarterly Consolidated Financial Information (unaudited)

12 Months Ended

May 27, 2012

Quarterly Financial Information [Text Block]

14. Quarterly Consolidated Financial Information (unaudited)

The following is a summary of the unaudited quarterly results of operations for fiscal years 2012, 2011 and 2010 (in thousands, except for per share amounts):

FY 2012	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter			FY 2012
Revenues	$	73,301	$	81,570	$	80,064	$	82,617		$	317,552
Gross profit	$	11,250	$	13,010	$	13,172	$	14,706		$	52,138
Net income	$	1,812	$	3,340	$	4,765	$	2,779		$	12,696
Net income per basic share	$	0.07	$	0.13	$	0.19	$	0.11		$	0.49
Net income per diluted share	$	0.07	$	0.13	$	0.18	$	0.11		$	0.49

FY 2011	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter			FY 2011
Revenues	$	64,953	$	70,168	$	73,508	$	68,100		$	276,729
Gross profit	$	11,817	$	11,855	$	12,477	$	10,546		$	46,695
Net income (loss)	$	2,304	$	2,055	$	2,298	$	(2,737	)	$	3,920
Net income (loss) per basic share	$	0.09	$	0.08	$	0.09	$	(0.10	)	$	0.15
Net income (loss) per diluted share	$	0.09	$	0.08	$	0.09	$	(0.10	)	$	0.15

FY 2010	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter			FY 2010
Revenues	$	60,943	$	60,933	$	58,133	$	58,215		$	238,224
Gross profit	$	8,870	$	7,417	$	8,127	$	9,352		$	33,766
Net income (loss)	$	2,184	$	1,534	$	1,734	$	(1,468	)	$	3,984
Net income (loss) per basic share	$	0.08	$	0.06	$	0.07	$	(0.06	)	$	0.15
Net income (loss) per diluted share	$	0.08	$	0.06	$	0.07	$	(0.06	)	$	0.15

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Note 15 - Subsequent Events

12 Months Ended

May 27, 2012

Subsequent Events [Text Block]

15. Subsequent Events

Lifecore earn out payment

The Lifecore Purchase Agreement included an earn out payment of up to an additional $10.0 million based on Lifecore achieving certain revenue targets in calendar years 2011 and 2012. These revenue targets where achieved in calendar year 2011 and the $10.0 million earn out payment was paid by the Company to the former shareholder of Lifecore on May 29, 2012 (see Note 2).

Sale of Landec Ag

On June 24, 2012, Landec entered into three agreements with INCOTEC® Coating and Seed Technology Companies, a leading provider of seed and coating technology products and services to the seed industry.

In the first agreement, Landec sold its seed subsidiary, Landec Ag LLC, to INCOTEC Holding North America, Inc. for $600,000, which will result in a gain of approximately $90,000, a majority of which will be recognized over the life of the Pollinator Plus® license agreement.

In the second agreement, Landec entered into a seven-year exclusive technology license and polymer supply agreement with INCOTEC for the use of Landec’s Intellicoat® polymer seed coating technology for male inbred corn which is sold under the Pollinator Plus® label. This license does not include the use of Intellicoat for the controlled release of an active ingredient for agricultural applications which will be retained by Landec. Landec will be the exclusive supplier of Pollinator Plus polymer to INCOTEC during the term of the license agreement and Landec will receive a royalty equal to 20% of the revenues realized by INCOTEC from the sale of or sublicense of Pollinator Plus coatings during the first four years of the agreement and 10% for the last three years of the agreement.

In the third agreement, Landec entered into a five-year exclusive technology license and polymer supply agreement with INCOTEC for the joint development of new polymer and unique coatings for use in seed treatment formulations. In this agreement, Landec will receive a value share which will be mutually agreed to by both parties prior to each application being developed.

Label	Element	Value
Accumulated Other Comprehensive Income (Loss) [Member]
NetIncomeAndComprehensiveIncome	lndc_NetIncomeAndComprehensiveIncome	$ (88,000)
Parent [Member]
Common stock repurchased on the open market	us-gaap_PaymentsForRepurchaseOfCommonStock	(1,184,000)
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	us-gaap_AdjustmentsToAdditionalPaidInCapitalTaxEffectFromShareBasedCompensation	764,000
Stock based compensation	us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue	1,951,000
NetIncomeAndComprehensiveIncome	lndc_NetIncomeAndComprehensiveIncome	3,832,000
Taxes paid by Company for stock swaps and RSUs	lndc_TaxesPaidByCompanyForStockSwapsAndRSUs	(218,000)
IssuanceOfCommonStockNetOfTaxesOnBehalfOfEmployee	lndc_IssuanceOfCommonStockNetOfTaxesOnBehalfOfEmployee	126,000
Retained Earnings [Member]
NetIncomeAndComprehensiveIncome	lndc_NetIncomeAndComprehensiveIncome	$ 3,920,000
Common Stock [Member]
Issuance of common stock for vested restricted stock units (in Shares)	us-gaap_StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures	40,133
Stock Repurchased During Period, Shares	us-gaap_StockRepurchasedDuringPeriodShares	(215,684)
Issuance of common stock (in Shares)	us-gaap_StockIssuedDuringPeriodSharesNewIssues	91,091
Noncontrolling Interest [Member]
Payments to Noncontrolling Interests	us-gaap_PaymentsToMinorityShareholders	$ (361,000)
Non-controlling interest	us-gaap_NetIncomeLossAttributableToNoncontrollingInterest	341,000
Additional Paid-in Capital [Member]
Common stock repurchased on the open market	us-gaap_PaymentsForRepurchaseOfCommonStock	(1,184,000)
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	us-gaap_AdjustmentsToAdditionalPaidInCapitalTaxEffectFromShareBasedCompensation	764,000
Stock based compensation	us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue	1,951,000
Taxes paid by Company for stock swaps and RSUs	lndc_TaxesPaidByCompanyForStockSwapsAndRSUs	(218,000)
IssuanceOfCommonStockNetOfTaxesOnBehalfOfEmployee	lndc_IssuanceOfCommonStockNetOfTaxesOnBehalfOfEmployee	$ 126,000