Leases

3 Months Ended

Apr. 02, 2021

Note 8 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing or computer-related equipment. 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):

	April 2, 2021			January 1, 2021
Machinery and equipment	$	36		$	570
Computer equipment and software		659			806
Finance lease right-of-use assets, gross		695			1,376
Less accumulated depreciation		(615	)		(780	)
Finance lease right-of-use assets, net	$	80		$	596

Total finance lease liability	$	152		$	398
Weighted-average remaining lease term (in years)		1.4			0.9
Weighted-average discount rate		2.62	%		3.46	%

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

	Three Months Ended
	April 2, 2021		April 3, 2020
Amortization of finance lease right-of-use asset	$	36	$	117
Interest on finance lease liabilities		4		10
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		4		10
Financing cash flows		235		236

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 did 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):

	April 2, 2021			January 1, 2021
Machinery and equipment	$	879		$	860
Computer equipment and software		168			462
Real property		13,460			12,956
Operating lease right-of-use assets, gross		14,507			14,278
Less accumulated depreciation		(5,841	)		(5,514	)
Operating lease right-of-use assets, net	$	8,666		$	8,764

Total operating lease liability	$	8,689		$	9,022
Weighted-average remaining lease term (in years)		5.0			5.2
Weighted-average discount rate		2.73	%		2.61	%

Note 8 – Leases (Continued)

Operating Leases

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

	Three Months Ended
	April 2, 2021		April 3, 2020
Operating lease cost	$	783	$	740
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		785		738
Right-of-use assets obtained in exchange for new operating lease liabilities		651		69

Future Minimum Lease Commitments

Estimated future minimum lease payments under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of April 2, 2021 is as follows (in thousands):

As of April 2, 2021 12 Months Ended	Operating Leases			Finance Leases
March 2022	$	2,573		$	127
March 2023		2,395			14
March 2024		1,681			14
March 2025		826			—
March 2026		455			—
Thereafter		1,184			—
Total minimum lease payments, including interest	$	9,114		$	155
Less amounts representing interest		(425	)		(3	)
Total minimum lease payments	$	8,689		$	152