Note Q - Leases

3 Months Ended

Jun. 26, 2022

Notes to Financial Statements

Leases, Disclosure [Text Block]

NOTE Q – LEASES

The Company is party as lessee to various leases for its Company-owned restaurants and lessee/sublessor to one franchised location property, including land and buildings, as well as leases for its corporate office and certain office equipment.

Company as lessee

The components of the net lease cost for the thirteen week periods ended June 26, 2022 and June 27, 2021 were as follows (in thousands):

	Thirteen weeks ended
	June 26, 2022			June 27, 2021
Statement of Earnings
Operating lease cost	$	428		$	432
Variable lease cost		368			442
Less: Sublease income, net		(22	)		(16	)
Total net lease cost (a)	$	774		$	858

(a) Includes $607, net and $700, net for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively, recorded to “Restaurant operating expenses” for leases for Company-owned restaurants;

Includes $189 and $174 for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively, recorded to “General and administrative expenses” for leases for corporate offices and equipment;

Also includes $22 and $16 for the thirteen week periods ended June 26, 2022 and June 27, 2021, respectively, recorded to “Other income, net” for leased properties that are leased to franchisees.

Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):

	Thirteen weeks ended
	June 26, 2022		June 27, 2021
Operating cash flows from operating leases	$	364	$	174

The weighted average remaining lease term and weighted-average discount rate for operating leases as of June 26, 2022 were as follows:

Weighted average remaining lease term (years):
Operating leases	6.0
Weighted average discount rate:
Operating leases	8.873	%

Future lease commitments to be paid and received by the Company as of June 26, 2022 were as follows (in thousands):

	Payments		Receipts
	Operating Leases		Subleases		Net Leases
Fiscal year:
2023 (a)	$	1,305	$	186	$	1,119
2024		1,774		271		1,503
2025		1,678		274		1,404
2026		1,712		278		1,434
2027		1,726		281		1,445
Thereafter		2,036		624		1,412
Total lease commitments	$	10,231	$	1,914	$	8,317
Less: Amount representing interest		2,260
Present value of lease liabilities (b)	$	7,971

(a)	Represents future lease commitments to be paid and received by the Company for the remainder of the 2023 fiscal year. Amount does not include $453 of lease commitments paid and received by the Company for the thirteen week period ended June 26, 2022.
(b)	The present value of minimum operating lease payments of $1,849 and $6,122 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively on the Consolidated Balance Sheet.

Company as lessor

The components of lease income for the thirteen week periods ended June 26, 2022 and June 27, 2021 were as follows (in thousands):

	Thirteen weeks ended
	June 26, 2022		June 27, 2021
Operating lease income, net	$	22	$	16