Note 17 - Leases

9 Months Ended

Oct. 02, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

17. Leases

Leases are recorded in accordance with FASB ASC 842, Leases which requires lessees to recognize a right-of-use (“ROU”) asset and an operating right of use liability for all leases with terms greater than 12 months and requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases.

The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The right of use asset also consists of any lease incentives received. The lease terms used to calculate the right of use asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. The Company has lease agreements which require payments for lease and non-lease components. The Company has elected to account for these as a single lease component with the exception of its real estate leases.

The components of lease expense were as follows:

	Thirteen Week Periods Ended				Thirty-Nine Week Periods Ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Operating lease cost	$	341	$	640	$	1,413	$	1,943
Finance lease cost
Amortization of right of use assets	$	110	$	120	$	292	$	275
Interest on lease liabilities		3		4		6		8
Total finance lease cost	$	113	$	124	$	298	$	283

Supplemental Cash Flow information related to leases was as follows:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	360	$	659	$	1,467	$	1,986
Operating cash flows from finance leases	$	5	$	2	$	7	$	6
Financing cash flows from finance leases	$	174	$	167	$	322	$	321
Right of use assets obtained in exchange for lease obligations
Operating leases	$	363	$	318	$	534	$	600
Finance leases	$	1,002	$	258	$	1,002	$	258

Supplemental Balance Sheet information as of October 2, 2021 and January 2, 2021 related to leases was as follows:

	October 2, 2021			January 2, 2021
Operating leases
Operating lease right of use assets	$	1,844		$	2,409
Operating right of use liability - current	$	(1,539	)	$	(1,886	)
Operating right of use liability - non-current		(1,759	)		(2,641	)
Total operating lease liabilities	$	(3,298	)	$	(4,527	)
Property and equipment - (right of use assets)	$	1,367		$	1,140
Accumulated depreciation		(265	)		(746	)
Property and equipment, net	$	1,102		$	394
Finance lease liability - current	$	(445	)	$	(247	)
Finance lease liability - non-current		(585	)		(106	)
Total finance lease liabilities	$	(1,030	)	$	(353	)
Weighted average remaining lease term
Operating leases	1.42 Years			2.03 Years
Finance leases	2.58 Years			1.45 Years
Weighted average discount rate
Operating leases		3.20	%		4.06	%
Finance leases		1.15	%		2.63	%

Maturities of lease liabilities are as follows:

Fiscal Year	Operating Leases			Finance Leases
2021 (after October 2, 2021)	$	462		$	94
2022		1,458			446
2023		1,020			337
2024		317			168
2025		133			-
Thereafter		50			-
Total lease payments		3,440			1,045
Less: imputed interest		(142	)		(15	)
Total	$	3,298		$	1,030