COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 29, 2019

Commitments and Contingencies Disclosure [Abstract]

Leases: As of June 29, 2019, June 30, 2018 and July 1, 2017, the Company did not have any property and equipment financed under capital leases. As of June 29, 2019, the Company has operating leases for certain equipment and production facilities, which expire at various dates during the next ten years.

Future minimum payments under non-cancelable operating leases at June 29, 2019, are summarized as follows (in thousands):



Fiscal Years Ending	Operating Leases
2020	$	4,777
2021	3,563
2022	2,641
2023	1,866
2024	1,271
Thereafter	4,121
Total minimum lease payments	$	18,239

Rental expense under operating leases was approximately $5.0 million, $7.1 million, and $7.8 million during fiscal years 2019, 2018 and 2017, respectively.

Warranty Costs: The Company provides warranties on certain product sales, and allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. The Company establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior twelve months’ sales activities. As of June 29, 2019 and June 30, 2018, the reserve for warranty costs was approximately $22,000 and $20,000, respectively.

If actual return rates and/or repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods. Warranty expense for fiscal years 2019, 2018 and 2017 was related to workmanship claims on certain EMS products.

Litigation: The Company is party to certain lawsuits or claims in the ordinary course of business. The Company does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the financial position, results of operations or cash flow of the Company.

Indemnification Rights: Under the Company’s bylaws, the Company’s directors and officers have certain rights to indemnification by the Company against certain liabilities that may arise by reason of their status or service as directors or officers. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and officers and former directors in certain circumstances.