Leases

3 Months Ended

Apr. 01, 2022

Note 7 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures. 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 (dollars in thousands):

	April 1, 2022			December 31, 2021
Machinery and equipment	$	33		$	35
Computer equipment and software		19			506
Furniture and fixtures		475			475
Finance lease right-of-use assets, gross		527			1,016
Less accumulated depreciation		(66	)		(510	)
Finance lease right-of-use assets, net	$	461		$	506

Total finance lease liability	$	489		$	509
Weighted-average remaining lease term (in years)		3.0			3.2
Weighted-average discount rate		4.06	%		4.02	%

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

	Three Months Ended
	April 1, 2022		April 2, 2021
Amortization of finance lease right-of-use asset	$	43	$	36
Interest on finance lease liabilities		3		4
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		3		4
Financing cash flows		18		235

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 does 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 (dollars in thousands):

	April 1, 2022			December 31, 2021
Machinery and equipment	$	808		$	760
Computer equipment and software		472			472
Real property		34,911			34,426
Operating lease right-of-use assets, gross		36,191			35,658
Less accumulated depreciation		(5,161	)		(4,348	)
Operating lease right-of-use assets, net	$	31,030		$	31,310

Total operating lease liability	$	31,370		$	31,552
Weighted-average remaining lease term (in years)		7.5			7.8
Weighted-average discount rate		3.59	%		3.56	%

Note 7 – Leases (Continued)

Operating Leases (Continued)

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

	Three Months Ended
	April 1, 2022		April 2, 2021
Operating lease cost	$	1,138	$	783
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		932		785
Right-of-use assets obtained in exchange for new operating lease liabilities		675		651

Maturities of Lease Liabilities

Maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of April 1, 2022 is as follows (in thousands):

As of April 1, 2022 12 Months Ended	Operating Leases			Finance Leases
March 2023	$	5,266		$	168
March 2024		5,521			183
March 2025		4,918			170
March 2026		3,703			—
March 2027		3,634			—
Thereafter		13,211			—
Total future minimum lease payments	$	36,253		$	521
Less amounts representing interest		(4,883	)		(32	)
Present value of future minimum lease payments	$	31,370		$	489
Current lease obligations		(3,608	)		(151	)
Long-term lease obligations	$	27,762		$	338