Leases

12 Months Ended

Apr. 03, 2021

Leases [Abstract]

Operating Leases

Leases

We lease certain production and retail locations, office space and equipment. We determine if a contract or arrangement is, or contains, a lease at inception. Lease agreements with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheet. Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease term by one to three years or more. Generally, the exercise of lease renewal options is at our discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option that we are reasonably certain to exercise.

 Certain of our lease agreements include rental payments adjusted periodically for inflation. These lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 Right Of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments in accordance with the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since our leases do not provide a readily determinable implicit interest rate, we estimate an incremental borrowing rate. In determining the estimated incremental borrowing rate, we consider the lease period and comparable market interest rates, as well as any other information available at the lease commencement date. The lease term includes options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheet as of April 3, 2021 and March 28, 2020 (in thousands):

	Classification	April 3, 2021		March 28, 2020
ROU assets
Operating lease assets	Operating lease right-of-use assets	$	16,252	$	13,894
Finance lease assets	Property, plant and equipment, net (1)	986		1,025
Total lease assets		$	17,238	$	14,919
Lease Liabilities
Current:
Operating lease liabilities	Accrued expenses and other current liabilities	$	4,184	$	4,170
Finance lease liabilities	Current portion of secured credit facilities and other	71		77
Non-current:
Operating lease liabilities	Operating lease liabilities	13,361		10,743
Finance lease liabilities	Secured credit facilities and other	233		289
Total lease liabilities		$	17,849	$	15,279

(1) Recorded net of accumulated amortization of $143,000 and $103,000 as of April 3, 2021 and March 28, 2020, respectively.

The following table provides information about the financial statement classification of our lease expenses reported within the Consolidated Statement of Comprehensive Income for the years ended April 3, 2021 and March 28, 2020 (in thousands):

		Year Ended
Lease Expense Category	Classification	April 3, 2021		March 28, 2020
Operating lease expense (2)
	Cost of sales	$	1,105	$	834
	Selling, general and administrative expenses	3,327		3,119
Finance lease expense:
Amortization of leased assets	Cost of sales	39		39
Interest on lease liabilities	Interest expense	17		52
Total lease expense		$	4,488	$	4,044

(2) Excludes short-term and variable lease expenses, which are immaterial.

Cash payments for operating and finance leases for the year ended April 3, 2021 were $4.2 million and $79,000, respectively. Cash payments for operating and finance leases for year ended March 28, 2020 were $3.4 million and $142,000, respectively. Rent expense for third-party operating leases was $5.2 million for the fiscal year ended March 30, 2019 and is included in Cost of sales and Selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income.

The present value minimum payments for future fiscal years under non-cancelable leases as of April 3, 2021 was as follows (in thousands):

	Operating Leases		Finance Leases		Total
2022	$	4,292	$	73	$	4,365
2023	3,973		73		4,046
2024	3,591		73		3,664
2025	2,799		73		2,872
2026	2,855		49		2,904
Thereafter	2,266		—		2,266
	19,776		341		20,117
Less: Amount representing interest	(2,231)		(37)		(2,268)
	$	17,545	$	304	$	17,849

The following table provides information about the weighted average remaining lease terms and weighted average discount rates as of April 3, 2021:

	Remaining Lease Term (Years)	Discount Rate
Operating leases	5.2	4.5	%
Finance leases	4.6	5.0	%

Finance Leases

Leases

We lease certain production and retail locations, office space and equipment. We determine if a contract or arrangement is, or contains, a lease at inception. Lease agreements with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheet. Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease term by one to three years or more. Generally, the exercise of lease renewal options is at our discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option that we are reasonably certain to exercise.

 Certain of our lease agreements include rental payments adjusted periodically for inflation. These lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 Right Of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments in accordance with the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since our leases do not provide a readily determinable implicit interest rate, we estimate an incremental borrowing rate. In determining the estimated incremental borrowing rate, we consider the lease period and comparable market interest rates, as well as any other information available at the lease commencement date. The lease term includes options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheet as of April 3, 2021 and March 28, 2020 (in thousands):

	Classification	April 3, 2021		March 28, 2020
ROU assets
Operating lease assets	Operating lease right-of-use assets	$	16,252	$	13,894
Finance lease assets	Property, plant and equipment, net (1)	986		1,025
Total lease assets		$	17,238	$	14,919
Lease Liabilities
Current:
Operating lease liabilities	Accrued expenses and other current liabilities	$	4,184	$	4,170
Finance lease liabilities	Current portion of secured credit facilities and other	71		77
Non-current:
Operating lease liabilities	Operating lease liabilities	13,361		10,743
Finance lease liabilities	Secured credit facilities and other	233		289
Total lease liabilities		$	17,849	$	15,279

(1) Recorded net of accumulated amortization of $143,000 and $103,000 as of April 3, 2021 and March 28, 2020, respectively.

The following table provides information about the financial statement classification of our lease expenses reported within the Consolidated Statement of Comprehensive Income for the years ended April 3, 2021 and March 28, 2020 (in thousands):

		Year Ended
Lease Expense Category	Classification	April 3, 2021		March 28, 2020
Operating lease expense (2)
	Cost of sales	$	1,105	$	834
	Selling, general and administrative expenses	3,327		3,119
Finance lease expense:
Amortization of leased assets	Cost of sales	39		39
Interest on lease liabilities	Interest expense	17		52
Total lease expense		$	4,488	$	4,044

(2) Excludes short-term and variable lease expenses, which are immaterial.

Cash payments for operating and finance leases for the year ended April 3, 2021 were $4.2 million and $79,000, respectively. Cash payments for operating and finance leases for year ended March 28, 2020 were $3.4 million and $142,000, respectively. Rent expense for third-party operating leases was $5.2 million for the fiscal year ended March 30, 2019 and is included in Cost of sales and Selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income.

The present value minimum payments for future fiscal years under non-cancelable leases as of April 3, 2021 was as follows (in thousands):

	Operating Leases		Finance Leases		Total
2022	$	4,292	$	73	$	4,365
2023	3,973		73		4,046
2024	3,591		73		3,664
2025	2,799		73		2,872
2026	2,855		49		2,904
Thereafter	2,266		—		2,266
	19,776		341		20,117
Less: Amount representing interest	(2,231)		(37)		(2,268)
	$	17,545	$	304	$	17,849

The following table provides information about the weighted average remaining lease terms and weighted average discount rates as of April 3, 2021:

	Remaining Lease Term (Years)	Discount Rate
Operating leases	5.2	4.5	%
Finance leases	4.6	5.0	%