Leases

6 Months Ended

Jun. 29, 2019

Leases [Abstract]

Leases

Note 12: Leases

Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases primarily consisting of facilities with remaining lease terms of approximately two to four years. The Company does not have the option to terminate the leases early.

The Company’s facilities are located in a one-story facility in Cranford, New Jersey. The 6,200 square foot facility houses the Company’s administrative offices, a warehouse, walk-in freezer and refrigerator, and a product development laboratory and test kitchen. The lease agreement expired in 1999, but the Company continues to occupy the premises under the terms of that agreement, subject to a six-month notification period from the Company and the landlord with respect to any changes. The Company currently has no plans to enter into a long-term lease agreement for the facility. Rent expense was $40 and $40 for the six months ended June 29, 2019 and June 30, 2018, respectively. Management believes that the Cranford facility will continue to satisfy the Company’s space requirements for the foreseeable future. The Company rents warehouse storage space at various outside facilities. Outside warehouse expenses amounted to $210 and $231 for the three months ended June 29, 2019 and June 30, 2018, respectively.

Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company has combined the lease and non-lease components in determining the lease liabilities and ROU assets.

The Company’s lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The Company used the incremental borrowing rate on December 29, 2018 of 5.5% for all leases that commenced prior to that date.

ROU lease assets and lease liabilities for our operating leases were recorded in the condensed balance sheet as follows:

	As of
	June 29, 2019
Other assets	$	301
Total ROU lease assets		301
Accounts payable		103
Other liabilities		210
Total lease liability	$	313
Weighted average remaining lease term (in years)		3.0
Weighted average discount rate		5.5	%

Future lease payments included in the measurement of lease liabilities on the condensed balance sheet as of June 29, 2019, for the following five fiscal years and thereafter are as follows:

	As of
	June 29, 2019
2019 - Remaining	$	61
2020		118
2021		118
2022		36
2023		6
Total future minimum lease payments		339
Present value adjustment		26
Total	$	313