Leases

12 Months Ended

Jan. 01, 2021

Note 9 — Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing or computer-related equipment. These finance leases are two to five years in length and have fixed payment amounts for the term of the contract and have options to purchase the assets at the end of the lease term. Supplemental balance sheet information related to finance leases consisted of the following at January 1, 2021 and January 3, 2020 (dollars in thousands):

	2020			2019
Machinery and equipment	$	570		$	1,885
Computer equipment and software		806			912
Furniture and fixtures		—			102
Leasehold improvements		—			27
Finance lease ROU assets, gross		1,376			2,926
Less accumulated depreciation		780			1,059
Finance lease ROU assets, net	$	596		$	1,867

Total finance lease liability	$	398		$	926
Weighted-average remaining lease term (in years)		0.9			1.1
Weighted-average discount rate		3.46	%		6.17	%

Supplemental cash flow information related to finance leases consisted of the following (in thousands):

	Years Ended
	2020		2019
Amortization of finance lease ROU asset	$	259	$	584
Interest on finance lease liabilities		30		72
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		30		72
Financing cash flows		561		1,294
ROU assets obtained in exchange for new finance lease liabilities		22		679

Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are two to ten years in length with options to extend. The Company did not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease. Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator. For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term. Supplemental balance sheet information related to operating leases consisted of the following at January 1, 2021 and January 3, 2020 (dollars in thousands):

Note 9 — Leases (Continued)

Operating Leases (Continued)

	2020			2019
Machinery and equipment	$	860		$	765
Computer equipment and software		462			462
Real property		12,956			11,116
Operating lease ROU assets, gross		14,278			12,343
Less accumulated depreciation		5,514			5,659
Operating lease ROU assets, net	$	8,764		$	6,684

Total operating lease liability	$	9,022		$	6,786
Weighted-average remaining lease term (in years)		5.2			2.3
Weighted-average discount rate		2.61	%		1.82	%

Supplemental cash flow information related to operating leases was as follows (in thousands):

	Years Ended
	2020		2019
Operating lease cost	$	3,023	$	2,749
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		3,052		2,774
ROU assets obtained in exchange for new operating lease liabilities		4,938		3,495

ROU assets related to operating leases of $5,726,000 were recorded upon the adoption of Topic 842 at the beginning of fiscal year 2019.

Future Minimum Lease Commitments

Estimated future minimum lease payments under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of January 1, 2021 are as follows (in thousands):

Year Ended	Operating Leases		Finance Leases
2021	$	2,682	$	366
2022		2,219		20
2023		1,804		15
2024		837		4
2025		595		—
Thereafter		1,325		—
Total minimum lease payments, including interest	$	9,462	$	405
Less amounts representing interest		440		7
Total minimum lease payments	$	9,022	$	398