LEASES

3 Months Ended

Mar. 30, 2024

LEASES

LEASES

NOTE 9 – LEASES

The Company leases land, office space and equipment. Arrangements are assessed at inception to determine if a lease exists and right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Because the Company’s leases do not provide an implicit rate of return, the Company uses its incremental borrowing rate at the inception of a lease to calculate the present value of lease payments. The Company has elected to apply the short-term lease exception for all asset classes, excluding lease liabilities from the balance sheet and recognizing the lease payments in the period they are incurred.

The components of lease expense are as follows (amounts in thousands):

		Three Months Ended
	Financial Statement Classification	March 30, 2024		April 1, 2023
Finance leases:
Amortization expense	SG&A Expense	$	31	$	54
Interest expense	Interest expense, net		10		13
Total finance lease expense			41		67
Operating leases:
Operating costs	Operating costs		11		435
Selling, general and administrative expenses	SG&A Expense		453		590
Total operating lease expense			464		1,025
Total lease expense		$	505	$	1,092

Supplemental balance sheet information related to leases was as follows (dollars in thousands):

	Financial Statement Classification	March 30, 2024		December 30, 2023
ROU Assets:
Operating leases	Right of use asset	$	4,762	$	5,079
Finance leases	Property and equipment, net		495		795
Total ROU Assets:		$	5,557	$	5,874
Lease liabilities:
Current liabilities
Operating leases	Current portion of operating leases	$	1,889	$	1,726
Finance leases	Current portion of finance leases		149		263
Noncurrent Liabilities:
Operating leases	Long-term operating leases		5,383		5,761
Finance leases	Long-term finance leases		305		548
Total lease liabilities		$	7,726	$	8,298

The weighted average remaining lease term and weighted average discount rate were as follows:

	At March 30, 2024
Weighted average remaining lease term (years)
Operating leases		6.4
Finance leases		3.1
Weighted average discount rate
Operating leases		9.9	%
Finance leases		13.4	%

Maturities of operating lease liabilities as of March 30, 2024 are as follows (dollars in thousands):

Years ending:	Operating leases			Finance leases			Total
2024 (remaining months)		1,653			140			1,793
2025		1,395			155			1,550
2026		920			151			1,071
2027		951			64			1,015
2028 and thereafter		3,157			13			3,170
Total lease payments		8,076			523			8,599
Less: imputed interest		(804	)		(69	)		(873	)
Total lease liabilities		7,272		$	454		$	7,726