| Leases |
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):
|
|
|
July 1, 2022 |
|
|
December 31, 2021 |
|
|
Machinery and equipment |
|
$ |
30 |
|
|
$ |
35 |
|
|
Computer equipment and software |
|
|
17 |
|
|
|
506 |
|
|
Furniture and fixtures |
|
|
475 |
|
|
|
475 |
|
|
Finance lease right-of-use assets, gross |
|
|
522 |
|
|
|
1,016 |
|
|
Less accumulated depreciation |
|
|
(102 |
) |
|
|
(510 |
) |
|
Finance lease right-of-use assets, net |
|
$ |
420 |
|
|
$ |
506 |
|
|
|
|
|
|
|
|
|
|
|
|
Total finance lease liability |
|
$ |
461 |
|
|
$ |
509 |
|
|
Weighted-average remaining lease term (in years) |
|
|
2.7 |
|
|
|
3.2 |
|
|
Weighted-average discount rate |
|
|
4.09 |
% |
|
|
4.02 |
% |
Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
|
July 1, 2022 |
|
|
July 2, 2021 |
|
|
July 1, 2022 |
|
|
July 2, 2021 |
|
|
Amortization of finance lease right-of-use asset |
|
$ |
39 |
|
|
$ |
20 |
|
|
$ |
82 |
|
|
$ |
56 |
|
|
Interest on finance lease liabilities |
|
|
5 |
|
|
|
1 |
|
|
|
8 |
|
|
|
5 |
|
|
Cash paid for amounts included in the measurement of finance lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows |
|
|
5 |
|
|
|
1 |
|
|
|
8 |
|
|
|
5 |
|
|
Financing cash flows |
|
|
27 |
|
|
|
43 |
|
|
|
45 |
|
|
|
278 |
|
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):
|
|
|
July 1, 2022 |
|
|
December 31, 2021 |
|
|
Machinery and equipment |
|
$ |
782 |
|
|
$ |
760 |
|
|
Computer equipment and software |
|
|
446 |
|
|
|
472 |
|
|
Real property |
|
|
34,108 |
|
|
|
34,426 |
|
|
Operating lease right-of-use assets, gross |
|
|
35,336 |
|
|
|
35,658 |
|
|
Less accumulated depreciation |
|
|
(4,973 |
) |
|
|
(4,348 |
) |
|
Operating lease right-of-use assets, net |
|
$ |
30,363 |
|
|
$ |
31,310 |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating lease liability |
|
$ |
30,588 |
|
|
$ |
31,552 |
|
|
Weighted-average remaining lease term (in years) |
|
|
7.4 |
|
|
|
7.8 |
|
|
Weighted-average discount rate |
|
|
3.66 |
% |
|
|
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 |
|
|
Six Months Ended |
|
|
|
|
July 1, 2022 |
|
|
July 2, 2021 |
|
|
July 1, 2022 |
|
|
July 2, 2021 |
|
|
Operating lease cost |
|
$ |
1,166 |
|
|
$ |
857 |
|
|
$ |
2,304 |
|
|
$ |
1,640 |
|
|
Cash paid for amounts included in the measurement of operating lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows |
|
|
1,034 |
|
|
|
801 |
|
|
|
1,966 |
|
|
|
1,586 |
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
|
2,081 |
|
|
|
3,356 |
|
|
|
2,756 |
|
|
|
4,007 |
|
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 July 1, 2022 is as follows (in thousands):
|
As of July 1, 2022
12 Months Ended |
|
Operating Leases |
|
|
Finance Leases |
|
|
June 2023 |
|
$ |
5,340 |
|
|
$ |
181 |
|
|
June 2024 |
|
|
5,392 |
|
|
|
179 |
|
|
June 2025 |
|
|
4,624 |
|
|
|
128 |
|
|
June 2026 |
|
|
3,700 |
|
|
|
— |
|
|
June 2027 |
|
|
3,655 |
|
|
|
— |
|
|
Thereafter |
|
|
12,613 |
|
|
|
— |
|
|
Total future minimum lease payments |
|
$ |
35,324 |
|
|
$ |
488 |
|
|
Less amounts representing interest |
|
|
(4,736 |
) |
|
|
(27 |
) |
|
Present value of future minimum lease payments |
|
$ |
30,588 |
|
|
$ |
461 |
|
|
Current lease obligations |
|
|
(3,708 |
) |
|
|
(166 |
) |
|
Long-term lease obligations |
|
$ |
26,880 |
|
|
$ |
295 |
|
|