SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631

       DIVISION OF
CORPORATION FINANCE
Mail Stop 4631

February 24, 2011

via U.S. mail and facsimile

Gregory S. Skinner, CFO Landec Corporation 3603 Haven Avenue Menlo Park, California  94025
 RE: Landec Corporation
  Form 10-K for the Fiscal  Year Ended May 30, 2010
  Filed August 13, 2010
Forms 10-Q for the Fiscal Quarte rs Ended August 29, 2010 and
November 28, 2010
Form 8-K Filed Fe bruary 18, 2011
  File No. 0-27446

Dear Mr. Skinner:
We have limited our review to only y our financial statements and related
disclosures and do not intend to expand our revi ew to other portions of your documents.
In some of our comments, we may ask you to  provide us with information so we may
better understand your disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circumstan ces, please tell us why in
your response.
 After reviewing the information you provide  in response to these comments, we
may have additional comments.

Mr. Skinner
Landec Corporation February 24, 2011 Page 2   Form 10-K for the Fiscal Year Ended May 30, 2010

 Item 7.  Management’s Discussion and Analys is of Financial Condition and Results of
Operations, page 32
 Critical Accounting Policies and Use of Estimates, page 33

Goodwill and Other Intangibles, page 34
 1. We note that goodwill is approximately 20% of total assets and 31% of total equity as
of May 30, 2010.  Given the significance, please address the following in future
filings:

• Provide a discussion about the projections  you have made in preparing estimated
fair values using the discounted cash flow  as compared with your actual results.

• To the extent that any of your reporting un its have estimated fair values that are
not substantially in excess of the carryi ng values and to the extent that goodwill
for these reporting units, in the aggregate or individually, could materially impact
your operating results or total equity, pl ease provide the following disclosures for
each of these reporting units:
o The percentage by which fair value exceed s the carrying value as of the most
recent step one test.
o The amount of goodwill.
o A discussion of the uncertainty associ ated with the key assumptions.  For
example, to the extent that you have included assumptions in your discounted
cash flow model that materially deviates from your historical  results, please
include a discussion of these assumptions.
o A discussion of any potential events a nd/or circumstances that could have a
negative effect to the estimated fair value.
If you have determined that the estimated fair value substantially exceeds the carrying value for all of your  reporting units, please disc lose this determination.
 Please refer to Item 303 of Regulatio n S-K and Sections 216 and 501.14 of the
Financial Reporting Codification for guidance.
 Results of Operations, page 39

 2. We note that you attributed the increase in Apio’s value-added revenues to the
increase in unit sales volumes.  In future filings, please provide investors with an understanding as to why volumes increased.  To the extent that the increase in
volumes is attributed, in total or in pa rt, to the introduction of new products, please
state as such and quantify the impact the ne w product offerings had to revenues.  In
this regard, we note your disclosure on page 10 that Apio had ten new product

Mr. Skinner
Landec Corporation February 24, 2011 Page 3
offerings in the last 12-months.  Please refer to Item 303(A)(3 )(iii) and section 501.12
of the Financial Reporting Codification for guidance.
 3. In future filings, please provide a discussi on and analysis of the material components
of your effective tax rate for each period pr esented.  For example, we note that your
fiscal year 2010 effective ta x rate increased to 50% as compared to 42% for fiscal
year 2009 without any explanation as to why.  Based on the r econciliation provided
within Note 11, there appears to be a fe w factors impacting both fiscal years’
effective tax rates that should be expanded on to expl ain the increase.
 Liquidity and Capital Resources, page 46

 4. We note that inventories are 18% of tota l current assets as of May 30, 2010.  We
further note that you attribute the increase in inventories, in part, to an increase in
Apio’s inventory levels.  In future filings , please ensure that you provide investors
with an understanding of the material cause s for the increase in Apio’s inventory
levels, as applicable.
 5. We note that you amended your Credit Agreement with Wells Fargo on August 9,
2010 to amend certain financial covenants and that you further amended the Credit
Agreement as it relates to your financial covenants on September 14, 2010.  In future
filings, please explain to investors why you needed to obtain amendments to your
Credit Agreement as it relates to the financial covenants.  Please also disclose all of
the financial covenants required to be met to the extent that you have determined it is
reasonably likely you will not meet these fina ncial covenants.  This disclosure should
include the minimum/maximum ratios and amounts permitted under the financial covenants in addition to the actual rati os and amounts achieved for the current
reporting period.  This disclosure will allow investors to easily understand your
current status in meeting your financial covenants.  Please refer to Sections
501.13.b.2 and 501.13.c. of the Financial Repo rting Codification for guidance.
 6. In future filings, please include interest payments in your contractual obligations
table.  This disclosure will increase transp arency of your cash flows.  To the extent
that the interest rates are variable and unknown, pleas e use your judgment to
determine the amount to include in your tabl e for estimates of future variable rate
interest payments.  Please also provide  the disclosures with respect to your
assumptions for the variable interest paymen ts.  If you are in a position of paying cash
rather than receiving cash for your interest ra te swaps, please disclose estimates of the
amounts you will be obligated to pay.

Mr. Skinner
Landec Corporation February 24, 2011 Page 4   Item 9A.  Controls a nd Procedures, page 49

 7. We note your disclosure “[e]xcept as de scribed above, there were no changes in
[y]our internal control over financial reporting during the quarter ended May 30, 2010
that have materially affected, or are reas onably likely to materially affect, [y]our
internal control over financial reporting.”  In future filings, please revise to state
clearly, if correct, that ther e were changes in your intern al control over financial
reporting that occurred during this quarter that have materially affected, or are
reasonably likely to materially affect, your internal control over financial reporting.
Please also clearly state th e changes that were made.
 Consolidated Statements of Income, page 55

 8. We note that you have included acquisition-related costs within other expenses below
operating income.  Please provide us with  a detailed explanation as to how you
determined that these costs meet th e definition of non-operating expenses.
Otherwise, please reclassify this amount to be part of operating income in future
filings.  Please refer to ASC 805-10-55-41 and Rule 5-03.9 of Regulation S-X (ASC
225-10-S99-2) for guidance.

Consolidated Statements of Changes in Stockholders’ Equity, page 56

 9. In all future periodic reports, please separa tely present a reconciliation of total equity
attributable to the parent and total equity attributable to noncont rolling interests.
Please refer to ASC 810-10-50-1A for guidance.
 Consolidated Statements of Cash Flows, page 57

 10. In future filings, please revise your pres entation of operating activities using the
indirect method to arrive at cash flows fr om operating activities to begin with net
income instead of net income applicable to Common Stockholders.  Please refer to
ASC 230-10-45-28 (paragraph 28 of SFAS 95) fo r guidance.  In this regard, please
note that the definition of net income has been revised.  Please refer to ASC 810-10-
45-19 and 45-20 (paragraphs 29-30 of Appendix A to SFAS 160) for additional guidance.
 2.  Acquisition of Lifecore Biomedical, Inc., page 71

 11. We note that you acquired Lifecore Biomed ical, Inc. (Lifecore) on April 30, 2010 and
that you have recognized two intangible assets separately from goodwill – trade names valued at $4.2 million and customer base valued at $3.7 million.  We further note your discussion within Item 1 of the Fo rm 10-K that Lifeco re has a proprietary
fermentation process to manufacture prem ium, pharmaceutical-grade hyaluronan and

Mr. Skinner
Landec Corporation February 24, 2011 Page 5
a proprietary aseptic formulation and filling capability.  Also, Lifecore has a world-
wide exclusive license and development agreement to develop and commercialize
hyaluronan-based products and related products , and that you antic ipate sublicensing
the technology for certain app lications.  Finally, we note th at Lifecore had recognized
patents and license intangible assets on its balance sheet prior to the acquisition.  In
light of these facts, please provide us  with a detailed explanation of your
consideration for recognizi ng intangible assets for Li fecore’s technology, license
agreement, and in-process research and de velopment costs.  Please refer to ASC 805-
20-25-10, 805-20-35-5, 805-20-55-1 – 55- 13, and 805-20-55-31 – 55-51 for
guidance.
 12.  Commitments and Contingencies, page 82

 12. We note that you have not included any disc losures regarding lo ss contingencies in
accordance with ASC 450-20-50.  Please conf irm to us that you have no material
probable and/or reasonably po ssible loss contingencies that  require recognition and/or
disclosure for fiscal year 2010 a nd the subsequent interim periods.
 Form 10-Q for the Fiscal Quarter Ended November 28, 2010

2.  Acquisition of Lifecore Biomedical, Inc., page 8
 13. In future filings, please clearly  state, if correct, that th e initial measurement of the
assets acquired and liabilities assumed as part of the acquisition of Lifecore is
complete and whether any adjustments were  necessary from the provisional amounts
recognized as of May 30, 2010 and August 29, 2010.
 Exhibits 31.1 and 31.2

 14. In future filings, please refrain from repl acing the word “repor t” with “quarterly
report” in paragraphs 2, 3, and 4(a) of the Section 302 certifications.  Please refer to
Item 601(b)(31)(i) of Regulation S-K for guidance.

Form 8-K Filed February 18, 2011

 15. We note that you have entered into an ag reement with Windset Holdings 2010 Ltd.
(Windset) such that you are acquiring a 20.1% equity interest in Windset, a company that you have an existing exclusive li cense agreement for your Breathe Way
packaging technology.  We further note that th e agreement includes a put/call feature.
Please provide us with a comprehensive e xplanation as to how you intend to account
for this transaction in your consolidated fi nancial statements based on the terms of the
agreement and your involvement with Winds et.  Your explana tion should include
specific references to the FASB Codi fication that supports your accounting.

Mr. Skinner
Landec Corporation February 24, 2011 Page 6
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes the information the Securities
Exchange Act of 1934 and all applicable Exch ange Act rules require.  Since the company
and its management are in possession of all f acts relating to a company’s disclosure, they
are responsible for the accuracy and adequacy  of the disclosures they have made.

 In responding to our comments, please provide a written statement from the
company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

You may contact Tracey Hous er, Staff Accountant, at  (202) 551-3736, or in her
absence, Jeanne Baker, Assistant Chie f Accountant, at (202) 551-3691, if you have
questions regarding comments on the financia l statements and related matters.

Sincerely,

Rufus Decker Accounting Branch Chief