(4) Leases

12 Months Ended

Dec. 26, 2020

Commitments & Contingencies

(4) Leases

(4) Leases

The Company had two real estate leases in 2020—one expiring in February 2021 and one expiring December 2020. The latter lease was not renewed.  CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these equipment leases have been capitalized as the Company elected an accounting policy for short-term leases, which allows lessees to avoid recognizing right-of-use assets and liabilities for leases with terms of 12 months or fewer.

The real estate lease expiring in 2021 (the “Norton facility lease’) is included as a right-of-use lease asset and corresponding lease liability on the balance sheet. This asset and liability are based on the present value of remaining lease payments over the remaining lease term using the Company’s incremental borrowing rate at date of adoption of the lease guidance. The Company does not separate lease components from non-lease components.  The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Norton facility lease comprises approximately 38 thousand square feet. The lease is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities.  The Company also has an option to buy the property and a first right of refusal during the term of the lease.  Annual rental payments are $152 thousand through maturity.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating leases as of December 26, 2020

(Dollars in Thousands)		December 26, 2020
Maturity of capitalized lease payments		Lease payments
2021		25
Total undiscounted operating lease payments	$	25
Less: Imputed interest		—
Present value of operating lease liability	$	25

Balance Sheet Classification
Current lease liability	$	25
Long-term lease liability		—
Total operating lease liability	$	25
Other Information
Weighted-average remaining lease term for capitalized operating leases		2 months
Weighted-average discount rate for capitalized operating leases		6.5%

Cash Flows

Cash paid for the amounts included in the present value of operating lease liabilities was $152 thousand during 2020 and is included in operating cash flows.

Operating Lease Costs

Operating lease cost was $152 thousand during 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 that qualify for capitalization.

Subsequent to year end, the Company renewed the Norton facility lease for an additional 5 years.  Estimated monthly payments under the terms of the renewed lease, which is not reflected in the 2020 lease asset or liability escalate from approximately $12 thousand to $16 thousand over the lease term