Investment in Leasing Operations:

6 Months Ended

Jun. 27, 2015

Investment in Leasing Operations:

Investment in Leasing Operations:

5.Investment in Leasing Operations:

Investment in leasing operations consists of the following:

	June 27, 2015			December 27, 2014
Direct financing and sales-type leases:
Minimum lease payments receivable	$	39,912,800		$	40,739,900
Estimated residual value of equipment	4,475,300			4,347,100
Unearned lease income net of initial direct costs deferred	(5,357,100		)	(6,061,100		)
Security deposits	(3,298,000		)	(3,253,200		)
Equipment installed on leases not yet commenced	3,685,500			8,364,100
Total investment in direct financing and sales-type leases	39,418,500			44,136,800
Allowance for credit losses	(844,800		)	(386,000		)
Net investment in direct financing and sales-type leases	38,573,700			43,750,800
Operating leases:
Operating lease assets	1,204,700			806,100
Less accumulated depreciation and amortization	(1,067,900		)	(536,400		)
Net investment in operating leases	136,800			269,700
Total net investment in leasing operations	$	38,710,500		$	44,020,500

As of June 27, 2015, the $38.7 million total net investment in leases consists of $18.7 million classified as current and $20.0 million classified as long-term.  As of December 27, 2014, the $44.0 million total net investment in leases consists of $19.8 million classified as current and $24.2 million classified as long-term.

As of June 27, 2015, leased assets with three customers approximated 17%, 15% and 13%, respectively, of the Company’s total assets.

Future minimum lease payments receivable under lease contracts and the amortization of unearned lease income, net of initial direct costs deferred, is as follows for the remainder of fiscal 2015 and the full fiscal years thereafter as of June 27, 2015:

	Direct Financing and Sales-Type Leases				Operating Leases
	Minimum Lease Payments Receivable		Income Amortization		Minimum Lease Payments Receivable
2015	$	12,289,800	$	2,310,300	$	18,900
2016	17,926,500		2,419,800		—
2017	8,765,100		610,700		—
2018	929,300		16,300		—
2019	2,100		—		—
Thereafter	—		—		—
	$	39,912,800	$	5,357,100	$	18,900

The activity in the allowance for credit losses for leasing operations during the first six months of 2015 and 2014, respectively, is as follows:

	June 27, 2015			June 28, 2014
Balance at beginning of period	$	386,000		$	822,700
Provisions charged to expense	(162,200		)	27,800
Recoveries	630,300			88,800
Deductions for amounts written-off	(9,300		)	—
Balance at end of period	$	844,800		$	939,300

The Company’s investment in direct financing and sales-type leases (“Investment In Leases”) and allowance for credit losses by loss evaluation methodology are as follows:

	June 27, 2015				December 27, 2014
	Investment In Leases		Allowance for Credit Losses		Investment In Leases		Allowance for Credit Losses
Collectively evaluated for loss potential	$	39,418,500	$	844,800	$	44,136,800	$	386,000
Individually evaluated for loss potential	—		—		—		—
Total	$	39,418,500	$	844,800	$	44,136,800	$	386,000

The Company’s key credit quality indicator for its investment in direct financing and sales-type leases is the status of the lease, defined as accruing or non-accrual.  Leases that are accruing income are considered to have a lower risk of loss.  Non-accrual leases are those that the Company believes have a higher risk of loss.  The following table sets forth information regarding the Company’s accruing and non-accrual leases.  Delinquent balances are determined based on the contractual terms of the lease.

	June 27, 2015
	0-60 Days Delinquent and Accruing		61-90 Days Delinquent and Accruing		Over 90 Days Delinquent and Accruing		Non-Accrual		Total
Middle-Market	$	38,340,500	$	—	$	—	$	—	$	38,340,500
Small-Ticket	1,078,000		—		—		—		1,078,000
Total Investment in Leases	$	39,418,500	$	—	$	—	$	—	$	39,418,500

	December 27, 2014
	0-60 Days Delinquent and Accruing		61-90 Days Delinquent and Accruing		Over 90 Days Delinquent and Accruing		Non-Accrual		Total
Middle-Market	$	42,948,000	$	—	$	—	$	—	$	42,948,000
Small-Ticket	1,188,800		—		—		—		1,188,800
Total Investment in Leases	$	44,136,800	$	—	$	—	$	—	$	44,136,800