Note N - Lease Liabilities

3 Months Ended

Sep. 24, 2021

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

N. Lease Liabilities

The Company leases certain office and warehouse space, as well as production and office equipment.

The Company determines if an arrangement is a lease at contract inception. The lease term begins upon lease commencement, which is when the Company takes possession of the asset, and may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. As its lease agreements typically do not provide an implicit rate, the Company primarily uses an incremental borrowing rate based upon the information available at lease commencement. In determining the incremental borrowing rate, the Company considers its current borrowing rate, the term of the lease, and the economic environments where the lease activity is concentrated.

The following table provides a summary of leases recorded on the condensed consolidated balance sheet.

	Balance Sheet Location	September 24, 2021		June 30, 2021
Lease Assets
Operating lease right-of-use assets	Right-of-use assets operating leases	$	14,216	$	14,736
Finance lease right-of-use assets	Property, plant and equipment, net		5,201		5,244
Lease Liabilities
Operating lease liabilities	Accrued liabilities	$	1,864	$	1,870
Operating lease liabilities	Lease obligations		12,373		12,887
Finance lease liabilities	Accrued liabilities		566		541
Finance lease liabilities	Other long-term liabilities		4,790		4,836

The components of lease expense were as follows:

	For the Quarter Ended
	September 24, 2021			September 25, 2020
Finance lease cost:
Amortization of right-of-use assets	$	163		$	119
Interest on lease liabilities		72			17
Operating lease cost		693			762
Short-term lease cost		2			9
Variable lease cost		39			16
Total lease cost		969			923
Less: Sublease income		(20	)		(56	)
Net lease cost	$	949		$	867

Other information related to leases was as follows:

	For the Quarter Ended
	September 24, 2021			September 25, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	742		$	762
Operating cash flows from finance leases		136			135
Financing cash flows from finance leases		72			17
Right-of-use-assets obtained in exchange for lease obligations:
Operating leases		165			-
Finance leases		174			4,616
Weighted average remaining lease term (years):
Operating leases		9.6			10.7
Finance lease		11.7			12.8
Weighted average discount rate:
Operating leases		7.2	%		7.4	%
Finance leases		5.2	%		5.2	%

Approximate future minimum rental commitments under non-cancellable leases as of September 24, 2021 were as follows:     

	Operating Leases			Finance Leases
2022	$	2,169		$	621
2023		2,625			819
2024		2,283			776
2025		1,643			534
2026		1,551			465
Thereafter		9,855			3,895
Total future lease payments		20,126			7,110
Less: Amount representing interest		(5,889	)		(1,754	)
Present value of future payments	$	14,237		$	5,356