LEASES

Components of Lease Expense and Supplemental Cash Flow Information

The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest expense in the condensed consolidated statements of operations, during the three and nine months ended July 2, 2021 and June 26, 2020 were as follows:


		Three Months Ended				Nine Months Ended
		July 2,		June 26,		July 2,		June 26,
Lease Expense	Classification	2021		2020		2021		2020
(in thousands)
Operating lease expense
Fixed payment operating lease expense ⁽¹⁾	Cost of sales	$	31	$	62	$	161	$	155
Fixed payment operating lease expense	Selling and administrative expenses		6		1		25		31
Finance lease expense
Depreciation of ROU assets	Cost of sales		557		131		1,383		404
Depreciation of ROU assets	Selling and administrative expenses		33		—		89		—
Interest	Interest expense		250		87		718		261
Total lease expense		$	877	$	281	$	2,376	$	851

⁽¹⁾ Includes short-term leases which are not material.

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company’s leases during the three and nine months ended July 2, 2021 and June 26, 2020 were as follows:


	Nine Months Ended
	July 2,		June 26,
Supplemental Cash Flow	2021		2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating lease ROU assets	$	55	$	65
Interest paid on finance leases		718		261

Lease liabilities arising from obtaining ROU assets:
Operating leases		—		33
Finance leases	$	19,142	$	—

Summary of Finance Lease Payments

A summary of finance lease payments for the next five years follows:


	Contractual
	Lease
Finance Lease Payment Schedule	Payments
(in thousands)
Twelve months ending fiscal third quarter
2022	$	3,162
2023		3,260
2024		3,273
2025		3,351
2026 and thereafter		26,389
Total finance lease payments		39,435
Less: amounts representing interest		(7,665)
Total finance lease obligation	$	31,770