Note K - Leases

6 Months Ended

Jul. 09, 2022

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 leases have remaining lease terms of 1 year to 10 years. As of July 9, 2022, 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 is as follows:

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Lease Expense
Operating Lease Cost	$	342	$	407	$	680	$	718
Short-term Lease Cost		723		655		1,224		1,031
Variable Lease Cost		130		117		312		203
Total Operating Lease Cost	$	1,195	$	1,179	$	2,216	$	1,952
Operating Lease – Operating Cash Flows	$	309	$	361	$	612	$	616
New ROU Assets – Operating Leases	$	7,743	$	313	$	7,743	$	1,140

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	Six Months Ended
All Amounts in Thousands	July 9, 2022			July 10, 2021
Weighted Average Remaining Lease Term – Operating Leases (in years)		9.47			1.66
Weighted Average Discount Rate – Operating Leases		5.00	%		5.00	%

Future minimum lease payments under non-cancellable leases as of July 9, 2022 were as follows:

All Amounts in Thousands
Year 1	$	253
Year 2		1,358
Year 3		1,306
Year 4		1,287
Year 5		1,276
Thereafter		6,464
Total future minimum lease payments		11,944
Less imputed interest		(2,608	)
Total	$	9,336
Reported as of July 9, 2022
Current operating lease liabilities		676
Long-term operating lease liabilities		8,660
Total	$	9,336