LEASES

Effective

September 30, 2019,

the

first

day of fiscal year

2020,

we adopted FASB ASU

2016

02,

“Leases (Topic

842

)” using the modified retrospective method as of the adoption date. As a result of utilizing the modified retrospective approach, we have

not

restated prior year financial statements to conform with the new guidance. Our operating lease portfolio primarily includes real estate, office equipment, and vehicles.

Total lease expense consists of the following:

	13 Weeks Ended
(Thousands of Dollars)	December 29, 2019
Operating lease costs		969
Variable lease costs		280
Short-term lease costs		53
Total Operating Lease Expense		1,302

Supplemental cash flow information related to our operating leases was as follows:

(Thousands of Dollars)	December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases		891

As a result of the adoption of Topic

842,

September 30, 2019,

we recorded operating lease right-of-use assets of

$10,709,000,

current portion of lease liabilities of

$2,281,000,

and long-term operating lease liabilities of

$8,353,000

in a non-cash operating activity.

As of

December 30, 2019,

maturities of lease liabilities were as follows:


	13 Weeks Ended
(Thousands of Dollars)		December 29, 2019
2020 (nine months remaining)		2,902
2021		3,183
2022		2,149
2023		1,809
2024		1,480
Thereafter		5,019
Total lease payments		16,542
Less: interest		(6,414	)
Present value of lease liabilities		10,128

As of the year ended

September 29, 2019,

minimum lease payments during the

five

years ending

September 2024

and thereafter were

$3,403,000,

$2,290,000,

$2,238,000,

$1,637,000,

$1,367,000

and

$4,991,000,

respectively.

Our lease contracts are discounted using the incremental borrowing rate for the Company. We will assess this rate annually to determine whether it needs to be updated. The weighted average revolving lease terms and discount rates for all of our operating leases were as follows.

	13 Weeks Ended
	December 29, 2019
Weighted average remaining lease term (years)		7.19
Weighted Average discount rate		10.22	%

As of year ended