Note N - Lease Liabilities

9 Months Ended

Mar. 26, 2021

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

N. Lease Liabilities

The Company leases certain office and warehouse space, as well as production and office equipment.

The Company determines if an arrangement is a lease at contract inception. The lease term begins upon lease commencement, which is when the Company takes possession of the asset, and may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. As its lease agreements typically do not provide an implicit rate, the Company primarily uses an incremental borrowing rate based upon the information available at lease commencement. In determining the incremental borrowing rate, the Company considers its current borrowing rate, the term of the lease, and the economic environments where the lease activity is concentrated.

The components of lease expense were as follows:

	For the Quarter Ended						For the Three Quarters Ended
	March 26, 2021			March 27, 2020			March 26, 2021			March 27, 2020
Finance lease cost:
Amortization of right-of-use assets	$	154		$	49		$	421		$	127
Interest on lease liabilities		73			14			201			40
Operating lease cost		717			789			2,097			2,384
Short-term lease cost		17			18			29			43
Variable lease cost		36			17			118			42
Total lease cost		997			887			2,866			2,636
Less: Sublease income		(23	)		(53	)		(135	)		(159	)
Net lease cost	$	974		$	834		$	2,731		$	2,477

Other information related to leases was as follows:

	For the Quarter Ended				For the Three Quarters Ended
	March 26, 2021		March 27, 2020		March 26, 2021			March 27, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	747	$	780	$	2,275		$	2,367
Operating cash flows from finance leases		125		45		343			112
Financing cash flows from finance leases		73		14		201			40
Right-of-use-assets obtained in exchange for lease obligations:
Operating leases		19		149		125			2,573
Finance leases		86		188		4,757			465
Weighted average remaining lease term (years):
Operating leases						10.5			10.9
Finance lease						12.2			4.3
Weighted average discount rate:
Operating leases						7.4	%		7.4	%
Finance leases						5.2	%		6.6	%

Approximate future minimum rental commitments under non-cancellable leases as of March 26, 2021 were as follows:         

	Operating Leases			Finance Leases
2021	$	626		$	197
2022		2,391			789
2023		2,119			780
2024		1,898			736
2025		1,663			496
Thereafter		11,535			4,313
Total future lease payments		20,232			7,311
Less: Amount representing interest		(6,331	)		(1,865	)
Present value of future payments	$	13,901		$	5,446

The following table provides a summary of leases recorded on the condensed consolidated balance sheet.

	Balance Sheet Location	March 26, 2021		June 30, 2020
Lease Assets
Operating lease right-of-use assets	Property, plant and equipment, net	$	13,880	$	14,448
Finance lease right-of-use assets	Property, plant and equipment, net		5,335		959
Lease Liabilities
Operating lease liabilities	Accrued liabilities	$	1,470	$	1,724
Operating lease liabilities	Lease obligations		12,431		12,738
Finance lease liabilities	Accrued liabilities		525		233
Finance lease liabilities	Lease obligations		4,921		757