Note 5 - Leases

9 Months Ended

Dec. 01, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

5. LEASES

The Company has operating leases related to land, office space, warehouse space and equipment. All of the Company’s leases have been assessed to be operating leases. Renewal options are included in the lease term to the extent the Company is reasonably certain to exercise the option. The exercise of lease renewal options is at the Company’s sole discretion. The incremental borrowing rate represents the Company’s ability to borrow on a collateralized basis over a term similar to the lease term. The leases typically contain renewal options for periods ranging from one year to ten years and require the Company to pay real estate taxes and other operating costs. The latest land lease expiration is 2068 assuming exercise of all applicable renewal options by the Company. The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing or exercise its available renewal options.

Future minimum lease payments under non-cancellable operating leases as of December 1, 2024 are as follows:

Fiscal Year:
2025	$	14
2026		57
2027		59
2028		61
2029		65
Thereafter		202
Total undiscounted operating lease payments		458
Less imputed interest		(91	)
Present value of operating lease payments	$	367

The above payment schedule includes renewal options that the Company is reasonably likely to exercise. Leases with an initial term of 12 months or less are not recorded on the Company’s Condensed Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the terms of the leases.

For the 13 weeks and 39 weeks ended December 1, 2024, the Company’s operating lease expenses were $16 and $47, respectively. Cash payments of $40, pertaining to operating leases, are reflected in the Condensed Consolidated Statements of Cash Flows under cash flows from operating activities.

The following table sets forth the right-of-use assets and operating lease liabilities as of December 1, 2024:

Operating right-of-use assets	$	320
Operating lease liabilities	$	39
Long-term operating lease liabilities		328
Total operating lease liabilities	$	367

The Company’s weighted average remaining lease term for its operating leases is 6.5 years.

In the second quarter of fiscal year 2025, the Company entered into an extension of an expiring lease. The extension resulted in an additional right-of-use asset and lease liability of $267. An incremental borrowing rate of 4.90% was used to determine the right-of-use asset and related liability.