Leases

3 Months Ended

Mar. 29, 2024

Note 7 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures. These finance leases are two to five years in length and have fixed payment amounts for the term of the contract and have options to purchase the assets at the end of the lease term. Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):


	March 29, 2024			December 29, 2023
Computer equipment and software	$	6		$	6
Furniture and fixtures		475			475
Finance lease right-of-use assets, gross		481			481
Less accumulated depreciation		(335	)		(298	)
Finance lease right-of-use assets, net	$	146		$	183

Current finance lease obligations	$	166		$	165
Long-term finance lease obligations		—			42
Total finance lease liability	$	166		$	207
Weighted-average remaining lease term (in years)		1.0			1.3
Weighted-average discount rate		4.25	%		4.24	%

Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):


	Three Months Ended
	March 29, 2024		March 31, 2023
Amortization of finance lease right-of-use asset	$	37	$	39
Interest on finance lease liabilities		2		4
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		2		4
Financing cash flows		40		42

Note 7 – Leases (Continued)

Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are two to ten years in length with options to extend. The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease. Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator. For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term. Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):


	March 29, 2024			December 29, 2023
Machinery and equipment	$	701		$	735
Computer equipment and software		445			446
Real property		42,291			40,869
Operating lease right-of-use assets, gross		43,437			42,050
Less accumulated depreciation		(8,837	)		(7,663	)
Operating lease right-of-use assets, net	$	34,600		$	34,387

Current operating lease obligations	$	4,403		$	4,202
Long-term operating lease obligations		31,126			31,425
Total operating lease liability	$	35,529		$	35,627
Weighted-average remaining lease term (in years)		7.2			7.3
Weighted-average discount rate		5.51	%		5.48	%

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):


	Three Months Ended
	March 29, 2024		March 31, 2023
Operating lease cost	$	2,223	$	1,107
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,384		1,173
Right-of-use assets obtained in exchange for new operating lease liabilities		1,495		1,909

Future Maturities of Lease Liabilities

Estimated future maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of March 29, 2024 is as follows (in thousands):


As of March 29, 2024 12 Months Ended	Operating Leases			Finance Leases
March 2025	$	6,433		$	170
March 2026		5,379			—
March 2027		5,508			—
March 2028		5,633			—
March 2029		5,743			—
Thereafter		16,733			—
Total future minimum lease payments	$	45,429		$	170
Less amounts representing interest		(9,900	)		(4	)
Total lease liability	$	35,529		$	166