Investment in Leasing Operations:

9 Months Ended

Sep. 24, 2016

Investment in Leasing Operations:

Investment in Leasing Operations:

5.  Investment in Leasing Operations:

Investment in leasing operations consists of the following:

	September 24, 2016		December 26, 2015
Direct financing and sales-type leases:
Minimum lease payments receivable	$	35,780,200	$	37,181,600
Estimated residual value of equipment		4,442,900		4,511,000
Unearned lease income net of initial direct costs deferred		(5,351,700)		(4,999,700)
Security deposits		(4,054,300)		(3,640,500)
Equipment installed on leases not yet commenced		7,312,600		6,754,200
Total investment in direct financing and sales-type leases		38,129,700		39,806,600
Allowance for credit losses		(817,700)		(859,100)
Net investment in direct financing and sales-type leases		37,312,000		38,947,500
Operating leases:
Operating lease assets		1,001,700		1,083,300
Less accumulated depreciation and amortization		(979,300)		(1,043,300)
Net investment in operating leases		22,400		40,000
Total net investment in leasing operations	$	37,334,400	$	38,987,500

As of September 24, 2016, the $37.3 million total net investment in leases consists of $16.2 million classified as current and $21.1 million classified as long-term.  As of December 26, 2015, the $39.0 million total net investment in leases consists of $17.7 million classified as current and $21.3 million classified as long-term.

As of September 24, 2016, leased assets with two customers approximated 18% and 15%, respectively, of the Company’s total assets.

Future minimum lease payments receivable under lease contracts and the amortization of unearned lease income, net of initial direct costs deferred, is as follows for the remainder of fiscal 2016 and the full fiscal years thereafter as of September 24, 2016:

	Direct Financing and Sales-Type Leases				Operating Leases
	Minimum Lease		Income		Minimum Lease
Fiscal Year	Payments Receivable		Amortization		Payments Receivable
2016	$	6,594,500	$	1,297,400	$	14,200
2017		19,031,000		3,152,900		18,000
2018		8,444,600		843,600		—
2019		1,682,100		54,800		—
2020		8,400		1,500		—
Thereafter		19,600		1,500		—
	$	35,780,200	$	5,351,700	$	32,200

The activity in the allowance for credit losses for leasing operations during the first nine months of 2016 and 2015, respectively, is as follows:

	September 24, 2016		September 26, 2015
Balance at beginning of period	$	859,100	$	386,000
Provisions charged to expense		(52,000)		(123,400)
Recoveries		39,800		628,700
Deductions for amounts written-off		(29,200)		(9,300)
Balance at end of period	$	817,700	$	882,000

The Company’s investment in direct financing and sales-type leases (“Investment In Leases”) and allowance for credit losses by loss evaluation methodology are as follows:

	September 24, 2016				December 26, 2015
	Investment		Allowance for		Investment		Allowance for
	In Leases		Credit Losses		In Leases		Credit Losses
Collectively evaluated for loss potential	$	38,129,700	$	817,700	$	39,806,600	$	859,100
Individually evaluated for loss potential		—		—		—		—
Total	$	38,129,700	$	817,700	$	39,806,600	$	859,100

The Company’s key credit quality indicator for its investment in direct financing and sales-type leases is the status of the lease, defined as accruing or non-accrual. Leases that are accruing income are considered to have a lower risk of loss. Non-accrual leases are those that the Company believes have a higher risk of loss.  The following table sets forth information regarding the Company’s accruing and non-accrual leases.  Delinquent balances are determined based on the contractual terms of the lease.

	September 24, 2016
	0-60 Days		61-90 Days		Over 90 Days
	Delinquent		Delinquent		Delinquent and
	and Accruing		and Accruing		Accruing		Non-Accrual		Total
Middle-Market	$	37,052,300	$	—	$	—	$	—	$	37,052,300
Small-Ticket		1,077,400		—		—		—		1,077,400
Total Investment in Leases	$	38,129,700	$	—	$	—	$	—	$	38,129,700

	December 26, 2015
	0-60 Days		61-90 Days		Over 90 Days
	Delinquent		Delinquent		Delinquent and
	and Accruing		and Accruing		Accruing		Non-Accrual		Total
Middle-Market	$	38,616,600	$	—	$	—	$	—	$	38,616,600
Small-Ticket		1,185,800		4,200		—		—		1,190,000
Total Investment in Leases	$	39,802,400	$	4,200	$	—	$	—	$	39,806,600