Note N - Lease Liabilities

6 Months Ended

Dec. 31, 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 components of lease expense were as follows:

	For the Quarter Ended						For the Two Quarters Ended
	December 31, 2021			December 25, 2020			December 31, 2021			December 25, 2020
Finance lease cost:
Amortization of right-of-use assets	$	168		$	148		$	331		$	267
Interest on lease liabilities		71			17			142			35
Operating lease cost		698			795			1,391			1,557
Short-term lease cost		37			3			40			12
Variable lease cost		42			15			81			31
Total lease cost		1,016			978			1,985			1,902
Less: Sublease income		(19	)		(56	)		(39	)		(112	)
Net lease cost	$	997		$	922		$	1,946		$	1,790

Other information related to leases was as follows:

	For the Quarter Ended				For the Two Quarters Ended
	December 31, 2021		December 25, 2020		December 31, 2021			December 25, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	737	$	758	$	1,479		$	1,528
Operating cash flows from finance leases		211		176		416			310
Financing cash flows from finance leases		71		17		142			35
Right-of-use-assets obtained in exchange for lease obligations:
Operating leases		232		105		396			105
Finance leases		133		55		307			4,671
Weighted average remaining lease term (years):
Operating leases						9.3			10.6
Finance lease						11.5			12.2
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 December 31, 2021 were as follows:         

	Operating Leases			Finance Leases
2022	$	1,597		$	438
2023		2,783			866
2024		2,510			866
2025		1,664			619
2026		1,532			530
Thereafter		9,972			4,550
Total future lease payments		20,058			7,869
Less: Amount representing interest		(6,243	)		(2,580	)
Present value of future payments	$	13,815		$	5,289

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

	Balance Sheet Location	December 31, 2021		June 30, 2021
Lease Assets
Operating lease right-of-use assets	Right-of-use assets operating leases	$	13,795	$	14,736
Finance lease right-of-use assets	Property, plant and equipment, net		5,113		5,244
Lease Liabilities
Operating lease liabilities	Accrued liabilities	$	1,910	$	1,870
Operating lease liabilities	Lease obligations		11,905		12,887
Finance lease liabilities	Accrued liabilities		579		541
Finance lease liabilities	Other long-term liabilities		4,711		4,836