Note K - Leases

3 Months Ended

Mar. 20, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our commenced leases have remaining lease terms of 1 year to 5 years. As of March 20, 2021, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases.

ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information as follows:

	Three Months Ended
All Amounts in Thousands	March 20, 2021			March 21, 2020
Lease Expense
Operating Lease Cost	$	311		$	207
Short-term Lease Cost		376			23
Variable Lease Cost		86			36
Total Operating Lease Cost	$	773		$	266
Operating Lease – Operating Cash Flows	$	255		$	187
New ROU Assets – Operating Leases (non-cash)	$	827		$	688
Weighted Average Remaining Lease Term – Operating Leases (in years)		1.90			2.61
Weighted Average Discount Rate – Operating Leases		5.00	%		5.00	%

Future minimum lease payments under non-cancellable leases as of March 20, 2021 were as follows:

All Amounts in Thousands
Year 1	$	1,074
Year 2		863
Year 3		227
Year 4		61
Year 5		29
Thereafter		-
Total future minimum lease payments		2,254
Less imputed interest		(100	)
Total	$	2,154
Reported as of March 20, 2021
Current operating lease liabilities		1,310
Long-term operating lease liabilities		844
Total	$	2,154

As of March 20, 2021, we have entered into two leases for additional warehouse and operations which have not yet commenced. Although one of the locations is currently under construction, we do not control the building during construction, and are thus not deemed to be the owner during construction. Amounts in the table above exclude legally binding minimum lease payments for leases signed but not yet commenced of $10.2 million.