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Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Aug. 25, 2013	Sep. 20, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	LANDEC CORP \CA\
Document Type	10-Q
Current Fiscal Year End Date	--05-25
Entity Common Stock, Shares Outstanding		26,488,209
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	Aug. 25, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands

Aug. 25, 2013

May 26, 2013

^[1]

Current Assets:

Cash and cash equivalents

$ 8,897

$ 13,718

Marketable securities

1,297

1,545

Accounts receivable, less allowance for doubtful accounts of $451 and $583 at August 25, 2013 and May 26, 2013, respectively

32,973

36,072

Accounts receivable, related party

205

671

Income taxes receivable

4,942

5,103

Inventories, net

24,589

24,113

Deferred taxes

2,006

1,582

Prepaid expenses and other current assets

2,816

2,856

Total Current Assets

77,725

85,660

Investment in non-public company, non-fair value

793

Investment in non-public company, fair value

35,000

29,600

Property and equipment, net

68,489

65,811

Goodwill, net

49,620

Trademarks/tradenames, net

48,428

Customer relationships, net

9,384

9,606

Other assets

1,394

1,424

Total Assets

290,833

290,942

Current Liabilities:

Accounts payable

29,083

31,470

Accounts payable, related party

297

786

Accrued compensation

3,929

4,984

Other accrued liabilities

3,219

2,332

Deferred revenue

628

1,248

Lines of credit

1,050

4,000

Current portion of long-term debt

5,961

5,933

Total Current Liabilities

44,167

50,753

Long-term debt, less current portion

32,961

34,372

Deferred taxes

26,781

24,054

Other non-current liabilities

1,455

1,349

Total Liabilities

105,364

110,528

Stockholders’ Equity:

Common stock, $0.001 par value; 50,000,000 shares authorized; 26,478,809 and 26,402,247 shares issued and outstanding at August 25, 2013 and May 26, 2013, respectively

Additional paid-in capital

126,502

126,258

Retained earnings

57,161

52,409

Total Stockholders’ Equity

183,689

178,693

Non-controlling interest

1,780

1,721

Total Equity

185,469

180,414

Total Liabilities and Stockholders’ Equity

$ 290,833

$ 290,942

[1]	Derived from audited financial statements.

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands

Aug. 25, 2013

May 26, 2013

^[1]

Allowance for doubtful accounts (in Dollars)

$ 451

$ 583

Common stock, par value (in Dollars per share)

$ 0.001

Common stock, shares authorized (in Shares)

50,000,000

Common stock, shares issued (in Shares)

26,478,809

26,402,247

Common stock, shares outstanding (in Shares)

26,478,809

26,402,247

[1]	Derived from audited financial statements.

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands	3 Months Ended
	Aug. 25, 2013	Aug. 26, 2012
Revenues:
Product sales	$ 108,929,000	$ 101,303,000
Services revenue, related party	550,000	771,000
Total revenues	109,479,000	102,074,000
Cost of revenue:
Cost of product sales	96,430,000	87,664,000
Cost of services revenue	517,000	647,000
Total cost of revenue	96,947,000	88,311,000
Gross profit	12,532,000	13,763,000
Operating costs and expenses:
Research and development	1,926,000	2,204,000
Selling, general and administrative	8,630,000	8,556,000
Total operating costs and expenses	10,556,000	10,760,000
Operating income	1,976,000	3,003,000
Dividend income	281,000	281,000
Interest income	60,000	26,000
Interest expense	(431,000)	(541,000)
Other income	5,400,000	4,259,000
Net income before taxes	7,286,000	7,028,000
Income tax expense	(2,475,000)	(2,565,000)
Consolidated net income	4,811,000	4,463,000
Non-controlling interest	(59,000)	(97,000)
Net income and comprehensive income applicable to common stockholders	$ 4,752,000	$ 4,366,000
Basic net income per share (in Dollars per share)	$ 0.18	$ 0.17
Diluted net income per share (in Dollars per share)	$ 0.18	$ 0.17
Shares used in per share computation
Basic (in Shares)	26,452	25,670
Diluted (in Shares)	27,081	26,212

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

3 Months Ended

Aug. 25, 2013

Aug. 26, 2012

Marketable Maturities [Member]

Cash flows from investing activities:

Proceeds from maturities of marketable securities

$ 1,665,000

Consolidated net income

4,811,000

$ 4,463,000

Depreciation and amortization

1,842,000

1,856,000

Stock-based compensation expense

278,000

348,000

Tax benefit from stock-based compensation expense

(505,000)

Net loss on disposal of property and equipment

46,000

180,000

Deferred taxes

2,303,000

1,942,000

Change in investment in non-public company (fair market value)

(5,400,000)

(4,296,000)

Accounts receivable, net

3,099,000

1,656,000

Accounts receivable, related party

466,000

55,000

Income taxes receivable

161,000

236,000

Inventories, net

(476,000)

(1,532,000)

Prepaid expenses and other current assets

40,000

(260,000)

Accounts payable

(2,387,000)

4,080,000

Accounts payable, related party

(489,000)

(243,000)

Accrued compensation

(129,000)

(1,824,000)

Other accrued liabilities

993,000

(1,435,000)

Deferred revenue

(620,000)

364,000

Net cash provided by operating activities

4,538,000

5,085,000

Purchases of property and equipment

(4,345,000)

(2,029,000)

Purchase of marketable securities

(1,417,000)

(756,000)

Net cash used in investing activities

(4,097,000)

(2,785,000)

Cash flows from financing activities:

Proceeds from sale of common stock

250,000

202,000

Taxes paid by Company for stock swaps and RSUs

(1,210,000)

(49,000)

Tax benefit from stock-based compensation expense

505,000

Earn out payment from Lifecore acquisition

(9,650,000)

Payments on long-term debt

(1,383,000)

(1,369,000)

Payments on lines of credit

(2,950,000)

(4,166,000)

Decrease in other assets

31,000

99,000

Net cash used in financing activities

(5,262,000)

(14,428,000)

Net decrease in cash and cash equivalents

(4,821,000)

(12,128,000)

Cash and cash equivalents at beginning of period

13,718,000

^[1]

22,177,000

Cash and cash equivalents at end of period

$ 8,897,000

$ 10,049,000

[1]	Derived from audited financial statements.

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

3 Months Ended

Aug. 25, 2013

Accounting Policies [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

1. Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

Landec Corporation and its subsidiaries (“Landec” or the “Company”) design, develop, manufacture and sell differentiated products for food and biomaterials markets and license technology applications to partners. The Company has two proprietary polymer technology platforms: 1) Intelimer® polymers, and 2) hyaluronan (“HA”) biopolymers. The Company sells specialty packaged branded Eat Smart® and GreenLine® and private label fresh-cut vegetables and whole produce to retailers, club stores and foodservice operators, primarily in the United States, Canada and Asia through its Apio, Inc. (“Apio”) subsidiary and sells HA-based biomaterials through its Lifecore Biomedical, Inc. (“Lifecore”) subsidiary. 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.

Basis of Presentation

The accompanying unaudited consolidated financial statements of Landec have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been made which are necessary to present fairly the financial position at August 25, 2013 and the results of operations and cash flows for all periods presented. Although Landec believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in financial statements and related footnotes prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission. The accompanying financial data should be reviewed in conjunction with the audited financial statements and accompanying notes included in Landec's Annual Report on Form 10-K for the fiscal year ended May 26, 2013.

The results of operations for the three months ended August 25, 2013 are not necessarily indicative of the results that may be expected for an entire fiscal year because there is some seasonality in Apio’s food business, particularly, Apio’s Food Export business and the order patterns of Lifecore’s customers which may lead to significant fluctuations in Landec’s quarterly results of operations.

Basis of Consolidation

The consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles and include the accounts of Landec Corporation and its subsidiaries, Apio and Lifecore. 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 its partnership interest in Apio Cooling and its equity investments in non-public companies are not VIEs.

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 is subject to change from period to period. The actual results may differ from management’s estimates.

Cash and Cash Equivalents

The Company records all highly liquid securities with three 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 corporate and municipal bonds with original maturities of more than three months at the date of purchase regardless of the maturity date. The Company classifies all debt securities with readily determined market values as “available for sale.” The aggregate amount of CDs included in marketable securities at August 25, 2013 and May 26, 2013 was $854,000 and $701,000, respectively. The contractual maturities of the Company’s marketable securities that are due in less than one year represented $1.0 million and $1.3 million of its marketable securities as of August 25, 2013 and May 26, 2013, respectively. The contractual maturities of the Company’s marketable securities that are due in one to two years represented $251,000 and $251,000 of its marketable securities as of August 25, 2013 and May 26, 2013, respectively. Investments in marketable securities are carried at fair market value with unrealized gains and losses reported as other income. 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. During the three months ended August 25, 2013 and August 26, 2012, the Company did not sell any marketable securities. The cost of securities sold is based on the specific identification method.

Financial Instruments

The Company’s financial instruments are primarily composed of marketable securities, commercial-term trade payables, grower advances, notes receivable and debt instruments. For short-term instruments, the historical carrying amount approximates the fair value of the instrument. The fair value of long-term debt and lines of credit approximates their carrying 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 August 25, 2013 and May 26, 2013.

Investments in Non-Public Companies

The Company’s investment in Aesthetic Sciences Corporation (“Aesthetic Sciences”), which is reported as an investment in non-public company, non-fair value, in the accompanying Consolidated Balance Sheets, 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 Sciences.

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 August 25, 2013 and May 26, 2013. The Company has elected to account for its investment in Windset under the fair value option (see Note 4).

Intangible Assets

The Company’s intangible assets are comprised of customer relationships with a finite estimated useful life of twelve to thirteen years and trademarks, trade names and goodwill with indefinite lives.

Finite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset group) may not be recoverable. Indefinite lived intangible assets are reviewed for impairment at least annually, in accordance with accounting guidance. For non-goodwill indefinite-lived intangible assets, the Company performs a qualitative analysis in accordance with ASC 350-30-35. For goodwill, the Company performs a quantitative analysis in accordance with ASC 350-20-35.

Partial Self-Insurance on Employee Health Plan

The Company provides health insurance benefits to eligible employees under a self-insured plan whereby the Company pays actual medical claims subject to certain stop loss limits. We record self-insurance liabilities based on actual claims filed and an estimate of those claims incurred but not reported. Any projection of losses concerning the Company's liability is subject to a high degree of variability. Among the causes of this variability are unpredictable external factors such as inflation rates, changes in severity, benefit level changes, medical costs, and claims settlement patterns. This self-insurance liability is included in accrued liabilities and represents management's best estimate of the amounts that have not been paid as of August 25, 2013. It is reasonably possible that the expense the Company ultimately incurs could differ and we may need to adjust our future reserves.

Fair Value Measurements

The Company uses fair value measurement accounting for financial assets and liabilities and for financial instruments and certain other items measured at fair value. The Company has elected the fair value option for its investment in a non-public company (see Note 4). 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 August 25, 2013, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis, including marketable securities, interest rate swap and a minority interest investment in Windset.

The fair value of the Company’s 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 marketable securities as a Level 1 measurement.

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

The Company has elected the fair value option of accounting for its investment in Windset. The calculation of fair value utilizes significant unobservable inputs in the discounted cash flow models, including projected cash flows, growth rates and discount rates. As a result, the Company’s investment in Windset is considered to be a Level 3 measurement investment. The change in the fair market value of the Company’s investment in Windset for the three months ended August 25, 2013 was due to the Company’s 20.1% minority interest in the change in the fair market value of Windset during the period. In determining the fair value of the investment in Windset, the Company utilizes the following significant unobservable inputs in the discounted cash flow models:

	At August 25, 2013				At May 26, 2013
Revenue growth rates		3%	to	6%		3%	to	9%
Expense growth rates		3%	to	25%		3%	to	8%
Income tax rates			15%				15%
Discount rates		16%	to	22%		18%	to	28%

The revenue growth, expense growth and income tax rate assumptions, consider the Company's best estimate of the trends in those items over the discount period. The discount rate assumption takes into account the risk-free rate of return, the market equity risk premium and the company’s specific risk premium and then applies an additional discount for lack of liquidity of the underlying securities. The discounted cash flow valuation model used by the Company has the following sensitivity to changes in inputs and assumptions (in thousands):

	Impact on value of Windset investment as of August 25, 2013
10% increase in revenue growth rates	$	1,700
10% increase in expense growth rates	$	(1,500	)
10% increase in income tax rates	$	(100	)
10% increase in discount rates	$	(1,500	)

Imprecision in estimating unobservable market inputs can affect the amount of gain or loss recorded for a particular position. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring basis, as of August 25, 2013 and May 26, 2013 (in thousands):

	Fair Value at August 25, 2013						Fair Value at May 26, 2013
Assets:	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Marketable securities	$	1,297	$	-	$	-	$	1,545	$	-	$	-
Investment in private company		-		-		35,000		-		-		29,600
Total	$	1,297	$	-	$	35,000	$	1,545	$	-	$	29,600

Liabilities:
Interest rate swap		-		123		-		-		163		-
Total	$	-	$	123	$	-	$	-	$	163	$	-

Revenue Recognition

The Company recognizes revenue when the earnings process is complete, as evidenced by an agreement with the customer, transfer of title, and acceptance, if applicable, as well as fixed pricing and probable collectibility. The Company records pricing allowances, including discounts based on arrangements with customers, as a reduction to both accounts receivable and net revenue.

When a sales arrangement contains multiple elements, the Company allocates revenue to each element based on a selling price hierarchy. The relative selling price for a deliverable is based on its vendor-specific objective evidence (VSOE), if available, third-party evidence (TPE), if VSOE is not available, or estimated selling price, if neither VSOE nor TPE is available. The Company then recognizes revenue on each deliverable in accordance with its policies for product and service revenue recognition. The Company is not typically able to determine VSOE or TPE, and therefore, uses estimated selling prices to allocate revenue between the elements of the arrangement.

The Company limits the amount of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of products or services or future performance obligations or subject to customer-specific cancellation rights. The Company evaluates each deliverable in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has stand-alone value, and for an arrangement that includes a general right of return relative to the delivered products or services, delivery or performance of the undelivered product or service is considered probable and is substantially controlled by the Company. The Company considers a deliverable to have stand-alone value if the product or service is sold separately by the Company or another vendor or could be resold by the customer. Further, the revenue arrangements generally do not include a general right of return relative to the delivered products. Where the aforementioned criteria for a separate unit of accounting are not met, the deliverable is combined with the undelivered element(s) and treated as a single unit of accounting for the purposes of allocation of the arrangement consideration and revenue recognition. The Company allocates the total arrangement consideration to each separable element of an arrangement based upon the relative selling price of each element. Allocation of the consideration is determined at arrangement inception on the basis of each unit’s relative selling price. In instances where the Company has not established fair value for any undelivered element, revenue for all elements is deferred until delivery of the final element is completed and all recognition criteria are met.

New Accounting Pronouncements

Unrecognized Tax Benefit

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"), which provides that a liability related to an unrecognized tax benefit would be offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented in the financial statements as a liability and will not be combined with deferred tax assets. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. ASU 2013-11 is effective for fiscal years and interim periods beginning after December 15, 2013, with early adoption permitted. The Company has early adopted this standard and such adoption did not have a significant impact on the Company’s financial position or results of operations.

Note 2 - Acquisitions

3 Months Ended

Aug. 25, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

2. Acquisition of GreenLine Holding Company

On April 23, 2012 (the “GreenLine Acquisition Date”), Apio acquired all of the outstanding equity of GreenLine Holding Company (“GreenLine”) pursuant to a Stock Purchase Agreement (the “GreenLine Purchase Agreement”) in order to expand its product offerings and enter into new markets such as foodservice. GreenLine, headquartered in Bowling Green, 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 until October 22, 2013 to secure Landec’s indemnification rights with respect to certain matters, including breaches of representations, warranties and covenants.

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		3,933
Total	$	66,833

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 GreenLine’s 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		(1,875	)
Total liabilities assumed		(10,266	)
Net identifiable assets acquired		53,675
Goodwill		13,158
Net assets acquired	$	66,833

The Company used a combination of the market and cost approaches to estimate the fair values of the GreenLine assets acquired and liabilities assumed.

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 assumed a 40% effective tax rate for each year. Management took 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 are considered to be indefinite life assets 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 on the closing date, 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 Apio’s 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.

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.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Note 3 - Sale of Landec Ag

3 Months Ended

Aug. 25, 2013

Disclosure Text Block Supplement [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

3. Sale of Landec Ag

On June 24, 2012, Landec entered into a stock purchase agreement and two licensing agreements (see Note 5) with INCOTEC^® Coating and Seed Technology Companies (“INCOTEC”), a leading provider of seed and coating technology products and services to the seed industry.

In the stock purchase agreement, Landec sold its equity interest in its seed subsidiary, Landec Ag LLC, to INCOTEC for $600,000, which resulted in a gain of $400,000. Under accounting guidance, because the stock purchase agreement was entered into at the same time the license agreements were consummated (a multiple element agreement), a portion of the gain, or $300,000, has been deferred and will be recognized as revenue monthly from the sale date over the seven year life of the Pollinator Plus® license agreement (see Note 5). The remaining $100,000 of the gain was recognized during the first quarter of fiscal year 2013.

Note 4 - Investments in Non-public Companies

3 Months Ended

Aug. 25, 2013

Investment Holdings [Abstract]

Investment Holdings [Text Block]

4. Investments in non-public companies

In December 2005, Landec entered into a licensing agreement with Aesthetic Sciences for the exclusive rights to use Landec's Intelimer® 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 August 25, 2013 and May 26, 2013. 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 Windset 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 Windset Purchase Agreement and the first two dividend payments of $1.1 million were made in May 2012 and May 2013. 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.

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, revenue/expense growth rates and discount rates (see Note 1) and is therefore considered a Level 3 investment for fair value measurement purposes. 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 both the three months ended August 25, 2013 and August 26, 2012, the Company recorded $281,000 in dividend income. The change in the fair market value of the Company’s investment in Windset for the three months ended August 25, 2013 and August 26, 2012 was $5.4 million and $4.3 million, respectively, and is included in other income in the Consolidated Statements of Comprehensive Income.

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 5).

Note 5 - Collaborative Agreements

3 Months Ended

Aug. 25, 2013

License Agreements [Abstract]

License Agreements [Text Block]

5. Collaborative Agreements

INCOTEC

In connection with the sale of Landec Ag to INCOTEC on June 24, 2012 (see Note 3), 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 was retained by Landec. Landec will be the exclusive supplier of Pollinator Plus polymer to INCOTEC during the term of the license agreement. 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.

On June 24, 2012, Landec also 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.

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

The agreement with Chiquita has been renewed through December 2016 and requires Chiquita to pay annual gross profit minimums to Landec in order for Chiquita to maintain its exclusive license for bananas. Under the terms of the agreement, Chiquita must notify Landec before December 1^st 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 in November 2012 of Chiquita’s desire to not maintain its exclusive license for calendar year 2013 and thus will not be required to pay the minimum gross profit for calendar year 2013. As a result, the agreement has reverted to a non-exclusive agreement in which Chiquita will pay the Company for membranes purchased and the Company is now entitled to sell its BreatheWay packaging technology for bananas to others.

Windset

In June 2010, Apio entered into an exclusive license agreement with Windset to allow for the use of 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 August 25, 2013, two products have been added to the agreement.

Note 6 - Stock-Based Compensation

3 Months Ended

Aug. 25, 2013

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

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

6. Stock-Based Compensation

In the three months ended August 25, 2013, the Company recognized stock-based compensation expense of $278,000 or $0.01 per basic and diluted share, which included $170,000 for restricted stock unit awards and $108,000 for stock option grants. In the three months ended August 26, 2012, the Company recognized stock-based compensation expense of $348,000 or $0.01 per basic and diluted share, which included $157,000 for restricted stock unit awards and $191,000 for stock option grants.

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

	Three Months Ended August 25, 2013		Three Months Ended August 26, 2012
Research and development	$	14,000	$	110,000
Sales, general and administrative		264,000		238,000
Total stock-based compensation	$	278,000	$	348,000

As of August 25, 2013, there was $3.1 million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Landec incentive stock plans. Total expense is expected to be recognized over the weighted-average period of 2.7 years for stock options and 2.3 years for restricted stock unit awards.

Note 7 - Diluted Net Income Per Share

3 Months Ended

Aug. 25, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

7. Diluted Net Income Per Share

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

	Three Months Ended August 25, 2013		Three Months Ended August 26, 2012
Numerator:
Net income applicable to Common Stockholders	$	4,752	$	4,366

Denominator:
Weighted average shares for basic net income per share		26,452		25,670
Effect of dilutive securities:
Stock options and restricted stock units		629		542
Weighted average shares for diluted net income per share		27,081		26,212

Diluted net income per share	$	0.18	$	0.17

For the three months ended August 25, 2013 and August 26, 2012, the computation of the diluted net income per share excludes the impact of options to purchase 256,264 shares and 277,489 shares of Common Stock, respectively, as such impacts would be antidilutive for these periods.

Note 8 - Income Taxes

3 Months Ended

Aug. 25, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8. Income Taxes

The provision for income taxes for the three months ended August 25, 2013 was $2.5 million. The effective tax rate for the three months ended August 25, 2013 was 34%, compared to 37% for the first quarter of fiscal year 2013. The effective tax rate for the three months ended August 25, 2013 differs from the statutory federal income tax rate of 35% as a result of several factors, including state taxes, domestic manufacturing deductions, non-deductible stock-based compensation expense and the benefit of federal and state research and development credits.

As of August 25, 2013 and May 26, 2013, the Company had unrecognized tax benefits of approximately $1.0 million. Included in the balance of unrecognized tax benefits as of August 25, 2013 and May 26, 2013 is approximately $819,000 and $807,000, respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next twelve months.

The Company has decided to classify interest and penalties related to uncertain tax positions as a component of its provision for income taxes. The Company has accrued an insignificant amount of interest and penalties relating to the income tax on the unrecognized tax benefits as of August 25, 2013 and May 26, 2013.

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

Note 9 - Inventories

3 Months Ended

Aug. 25, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

9. Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or market and consisted of the following (in thousands):

		August 25, 2013		May 26, 2013
Finished goods	$	12,825	$	11,297
Raw materials		8,778		9,290
Work in progress		2,986		3,526
Total	$	24,589	$	24,113

Note 10 - Debt

3 Months Ended

Aug. 25, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

10. Debt

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

	August 25, 2013			May 26, 2013
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	$	16,837		$	17,065
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		10,675			11,080
Term note with BMO Harris Bank N.A. (“BMO Harris”); due in monthly payments of $250,000 through May 23, 2016 with interest payable monthly at LIBOR plus 2% per annum		8,250			9,000
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 (0.26% and 0.38% at August 25, 2013 and May 26, 2013, respectively)		3,160			3,160
Total		38,922			40,305
Less current portion		(5,961	)		(5,933	)
Long-term portion	$	32,961		$	34,372

In addition to entering into the GE Capital 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 (availability was $14.4 million at August 25, 2013). Apio’s revolving line of credit has an unused fee of 0.375% per annum. At August 25, 2013 and May 26, 2013, Apio had $1.1 million and $4.0 million, respectively, outstanding under its revolving line of credit.

The GE Capital 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. The GE Debt Agreements contain customary covenants, such as limitations on the ability to (1) incur indebtedness or grant liens or negative pledges on Apio’s assets; (2) make loans or other investments; (3) pay dividends, sell stock or repurchase stock or other securities; (4) sell assets; (5) engage in mergers; (6) enter into sale and leaseback transactions; and (7) make changes in Apio’s corporate structure. In addition, Apio must maintain a minimum fixed charge coverage ratio of not less than 1.10 to 1.0. Apio was in compliance with all financial covenants as of August 25, 2013. Unamortized loan origination fees for the GE Debt Agreements were $1.1 million and $1.2 million at August 25, 2013 and May 26, 2013, respectively, and are included in other assets in the Consolidated Balance Sheets. Amortization of loan origination fees recorded to interest expense for the three months ended August 25, 2013 and August 26, 2012 were $47,000 and $46,000, respectively.

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

A Credit and Security Agreement (the “Credit Agreement”) which includes (a) a one-year, $10.0 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 (availability was $8.0 million at August 25, 2013) and with no unused fee (at August 25, 2013 and May 26, 2013, 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 26, 2013, and as of the end of each fiscal year thereafter. Lifecore was in compliance with all financial covenants as of August 25, 2013. Unamortized loan origination fees for the Lifecore Loan Agreements were $136,000 and $149,000 at August 25, 2013 and May 26, 2013, respectively, and are included in other assets in the Consolidated Balance Sheets. Amortization of loan origination fees recorded to interest expense for both three months ended August 25, 2013 and August 26, 2012 was $13,000.

The market value of the Company’s debt approximates its recorded value as the interest rate on each debt instrument approximates current market rates.

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”) which were assumed by Landec in the acquisition of Lifecore. 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 anannual 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 assets in the accompanying Consolidated Balance Sheets, and are paid out each year on September 1^st.

Note 11 - Derivative Financial Instruments

3 Months Ended

Aug. 25, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

11. Derivative Financial Instruments

In May 2010, the Company entered into a five-year interest rate swap agreement under its prior credit agreement with Wells Fargo, which expires on April 30, 2015. The interest rate swap was originally 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 its obligations under the credit agreement with Wells Fargo at the time the agreement was consummated. 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 during fiscal year 2012. The fair value of the swap arrangement as of August 25, 2013 and May 26, 2013 was $123,000 and $163,000, respectively, and is included in other accrued liabilities in the accompanying Consolidated Balance Sheets.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

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+ Details

Note 12 - Related Party

3 Months Ended

Aug. 25, 2013

12. Related Party

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 the three months ended August 25, 2013 and August 26, 2012, the Company recognized revenues of $580,000 and $953,000, respectively, which have been included in product sales and in service revenues in the accompanying Consolidated Statements of Comprehensive Income, from the sale of products and providing cooling services to these parties. The related receivable balances of $205,000 and $671,000 are included in accounts receivable in the accompanying Consolidated Balance Sheets as of August 25, 2013 and May 26, 2013, respectively.

Additionally, unrelated to the revenue transactions above, the Company purchases produce from Beachside, a farm in which the Chairman of Apio has an ownership interest, and Windset for sale to third parties. During the three months ended August 25, 2013 and August 26, 2012, the Company recognized cost of product sales of $1.9 million and $2.2 million, respectively, which have been included in cost of product sales in the accompanying Consolidated Statements of Comprehensive Income, from the sale of products purchased from these parties. The related accounts payable of $297,000 and $786,000 are included in related party accounts payable in the accompanying Consolidated Balance Sheets as of August 25, 2013 and May 26, 2013, respectively.

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

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

Note 13 - Stockholders' Equity

3 Months Ended

Aug. 25, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

13. Stockholders’ Equity

During the three months ended August 25, 2013, the Company granted options to purchase 291,500 shares of common stock and 128,631 of restricted stock unit awards.

As of August 25, 2013 the Company has reserved 1.7 million shares of Common Stock for future issuance under its current and former equity plans.

On July 14, 2010, the Company announced that the Board of Directors of the Company had approved the establishment of a stock repurchase plan authorizing the repurchase of up to $10 million of the Company’s Common Stock. The Company may repurchase its common stock from time to time in open market purchases or in privately negotiated transactions. The timing and actual number of shares repurchased is at the discretion of management of the Company and will depend on a variety of factors, including stock price, corporate and regulatory requirements, market conditions, the relative attractiveness of other capital deployment opportunities and other corporate priorities. The stock repurchase program does not obligate Landec to acquire any amount of its common stock and the program may be modified, suspended or terminated at any time at the Company's discretion without prior notice. During the three months ended August 25, 2013, the Company did not purchase any shares on the open market.

Consolidated Statements of Changes in Stockholders’ Equity (in thousands, except share amounts):

	August 25, 2013
Common Stock Shares
Balance at May 26, 2013		26,402,247
Stock options exercised, net of shares tendered		36,836
Vested restricted stock units, net of shares tendered		39,726
Balance at August 25, 2013		26,478,809

Common Stock
Balance at May 26, 2013	$	26
Stock options exercised, net of shares tendered		—
Vested restricted stock units, net of shares tendered		—
Balance at August 25, 2013	$	26

Additional Paid-in Capital
Balance at May 26, 2013	$	126,258
Stock options exercised, net of shares tendered		250
Vested restricted stock units, net of shares tendered		—
Taxes incurred by Company for RSUs vested		(284	)
Stock-based compensation expense		278
Tax-benefit from stock based compensation expense		—
Balance at August 25, 2013	$	126,502

Retained Earnings
Balance at May 26, 2013	$	52,409
Net income		4,752
Balance at August 25, 2013	$	57,161

Non controlling Interest
Balance at May 26, 2013	$	1,721
Non controlling interest in net income		59
Distributions to non controlling interest		—
Balance at August 25, 2013	$	1,780

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
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-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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-Number 210
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
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-Number 210
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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-Number 210
-Section 04
-Article 3

+ Details

Note 14 - Business Segment Reporting

3 Months Ended

Aug. 25, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

14. Business Segment Reporting

The Company manages its business operations through three strategic business units. Based upon the information reported to the chief operating decision maker, who is the Chief Executive Officer, the Company has the following reportable segments: the Food Products Technology segment, the Food Export segment and the Hyaluronan-based Biomaterials segment.

The Food Products Technology segment markets and packs specialty packaged whole and fresh-cut fruit and vegetables, the majority of which 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. Corporate 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. The Corporate segment also includes general and administrative expenses, non-Food Products Technology and non HA-based Biomaterials interest income and income tax expenses. Beginning in fiscal year 2013, the Food Products Technology, the Food Export and the Hyaluronan-based Biomaterials segments include charges for corporate services and tax sharing allocated from the Corporate segment. All of the assets of the Company are located within the United States of America. The Company’s international sales were as follows (in millions):

	Three Months Ended
	August 25, 2013		August 26, 2012
Taiwan	$	12.0	$	12.9
Canada	$	9.4	$	6.2
Japan	$	3.2	$	3.1
Indonesia	$	2.5	$	6.1
Belgium	$	1.2	$	3.0
All Other Countries	$	6.9	$	5.0

Operations and identifiable assets by business segment consisted of the following (in thousands):

Three Months Ended August 25, 2013	Food Products Technology		Food Export		HA-based Biomaterials			Corporate			TOTAL
Net sales	$	79,436	$	21,398	$	8,587		$	58		$	109,479
International sales	$	9,478	$	21,389	$	4,377		$	—		$	35,244
Gross profit	$	8,881	$	1,205	$	2,388		$	58		$	12,532
Net income (loss)	$	7,266	$	276	$	(376	)	$	(2,414	)	$	4,752
Depreciation and amortization	$	1,222	$	1	$	584		$	35		$	1,842
Dividend Income	$	281	$	—	$	—		$	—		$	281
Interest income	$	4	$	—	$	56		$	—		$	60
Interest expense	$	376	$	—	$	55		$	—		$	431
Income tax expense	$	505	$	78	$	(106	)	$	1,998		$	2,475

Three Months Ended August 26, 2012
Net sales	$	68,631	$	25,358	$	7,973		$	112		$	102,074
International sales	$	6,223	$	25,311	$	4,802		$	—		$	36,336
Gross profit	$	9,942	$	1,343	$	2,366		$	112		$	13,763
Net income (loss)	$	5,916	$	309	$	(312	)	$	(1,547	)	$	4,366
Depreciation and amortization	$	1,236	$	1	$	583		$	36		$	1,856
Dividend Income	$	281	$	—	$	—		$	—		$	281
Interest income	$	1	$	—	$	25		$	—		$	26
Interest expense	$	455	$	—	$	86		$	—		$	541
Income tax expense	$	1,972	$	103	$	(104	)	$	594		$	2,565

During the three months ended August 25, 2013 and August 26, 2012, sales to the Company’s top five customers accounted for 44% and 36%, respectively, of revenues with the Company’s top two customers from the Food Products Technology segment accounting for 20% and 12% for the three months ended August 25, 2013 and 12% and 12% for the three months ended August 26, 2012, respectively. The Company expects that, for the foreseeable future, a limited number of customers may continue to account for a significant portion of its net revenues.

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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+ Details

Accounting Policies, by Policy (Policies)

3 Months Ended

Aug. 25, 2013

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

Consolidation, Policy [Policy Text Block]

Basis of Consolidation

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Marketable Securities, Policy [Policy Text Block]

Marketable Securities

Financial Instruments Policy [Policy Text Block]

Financial Instruments

Investment In Non-Public Companies [Policy Text Block]

Investments in Non-Public Companies

Goodwill and Intangible Assets, Policy [Policy Text Block]

Intangible Assets

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

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.

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

	At August 25, 2013				At May 26, 2013
Revenue growth rates		3%	to	6%		3%	to	9%
Expense growth rates		3%	to	25%		3%	to	8%
Income tax rates			15%				15%
Discount rates		16%	to	22%		18%	to	28%

	Impact on value of Windset investment as of August 25, 2013
10% increase in revenue growth rates	$	1,700
10% increase in expense growth rates	$	(1,500	)
10% increase in income tax rates	$	(100	)
10% increase in discount rates	$	(1,500	)

The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring basis, as of August 25, 2013 and May 26, 2013 (in thousands):

	Fair Value at August 25, 2013						Fair Value at May 26, 2013
Assets:	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Marketable securities	$	1,297	$	-	$	-	$	1,545	$	-	$	-
Investment in private company		-		-		35,000		-		-		29,600
Total	$	1,297	$	-	$	35,000	$	1,545	$	-	$	29,600

Liabilities:

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

Unrecognized Tax Benefit

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

3 Months Ended

Aug. 25, 2013

Accounting Policies [Abstract]

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

	At August 25, 2013				At May 26, 2013
Revenue growth rates		3%	to	6%		3%	to	9%
Expense growth rates		3%	to	25%		3%	to	8%
Income tax rates			15%				15%
Discount rates		16%	to	22%		18%	to	28%

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

	Impact on value of Windset investment as of August 25, 2013
10% increase in revenue growth rates	$	1,700
10% increase in expense growth rates	$	(1,500	)
10% increase in income tax rates	$	(100	)
10% increase in discount rates	$	(1,500	)

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

	Fair Value at August 25, 2013						Fair Value at May 26, 2013
Assets:	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Marketable securities	$	1,297	$	-	$	-	$	1,545	$	-	$	-
Investment in private company		-		-		35,000		-		-		29,600
Total	$	1,297	$	-	$	35,000	$	1,545	$	-	$	29,600

Liabilities:
Interest rate swap		-		123		-		-		163		-
Total	$	-	$	123	$	-	$	-	$	163	$	-

Note 2 - Acquisitions (Tables)

3 Months Ended

Aug. 25, 2013

Business Combinations [Abstract]

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

Cash	$	62,900
Contingent consideration		3,933
Total	$	66,833

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

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		(1,875	)
Total liabilities assumed		(10,266	)
Net identifiable assets acquired		53,675
Goodwill		13,158
Net assets acquired	$	66,833

Note 6 - Stock-Based Compensation (Tables)

3 Months Ended

Aug. 25, 2013

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

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

	Three Months Ended August 25, 2013		Three Months Ended August 26, 2012
Research and development	$	14,000	$	110,000
Sales, general and administrative		264,000		238,000
Total stock-based compensation	$	278,000	$	348,000

Note 7 - Diluted Net Income Per Share (Tables)

3 Months Ended

Aug. 25, 2013

Earnings Per Share [Abstract]

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

	Three Months Ended August 25, 2013		Three Months Ended August 26, 2012
Numerator:
Net income applicable to Common Stockholders	$	4,752	$	4,366

Denominator:
Weighted average shares for basic net income per share		26,452		25,670
Effect of dilutive securities:
Stock options and restricted stock units		629		542