(4) Commitments & Contingencies

3 Months Ended

Mar. 28, 2020

Commitments (note 4)

(4) Commitments & Contingencies

(4)        Commitments & Contingencies

Commitments

Leases

The Company has two real estate leases—one expiring in February 2021 and one with an 11 month duration with options to extend additional years. Since the latter is not reasonably certain that any options will be exercised, it has not been recorded on the balance sheet. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these have been capitalized.

The lease expiring in 2021 is included as a right-of-use lease asset and corresponding lease liability on the balance sheet. This asset and liability was recognized on December 30, 2018 based on the present value of remaining lease payments over the remaining lease term using the Company’s incremental borrowing rate at commencement dates. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating Leases

Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense is included in rents on the statements of operations and is reported net of lease income. Lease income is not material to the results of operations for the quarter ended March 28, 2020.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating leases as of March 28, 2020

(Dollars in Thousands)		March 28, 2020
Maturity of capitalized lease liabilities		Lease payments
2020		117
2021		26
Total undiscounted operating lease payments	$	143
Less: Imputed interest		(7)
Present value of operating lease liability	$	136

Balance Sheet Classification
Current lease liability	$	136
Long-term lease liability		0
Total operating lease liability	$	136
Other Information
Weighted-average remaining lease term for capitalized operating leases		11 months
Weighted-average discount rate for capitalized operating leases		6.5%

Operating Lease Costs and Cash Flows

Operating lease cost and cash paid was $38 thousand during the first quarter of 2020. This cost is related to its long-term operating lease. All other short-term leases were immaterial.

Finance Leases

The company does not have any finance leases.