Investment in Leasing Operations:

3 Months Ended

Apr. 01, 2017

Investment in Leasing Operations:

Investment in Leasing Operations:

5.  Investment in Leasing Operations:

Investment in leasing operations consists of the following:

	April 1, 2017		December 31, 2016
Direct financing and sales-type leases:
Minimum lease payments receivable	$	37,318,700	$	37,839,800
Estimated residual value of equipment		5,034,800		4,754,200
Unearned lease income net of initial direct costs deferred		(5,799,100)		(5,844,500)
Security deposits		(4,335,900)		(4,424,400)
Equipment installed on leases not yet commenced		10,353,900		9,961,600
Total investment in direct financing and sales-type leases		42,572,400		42,286,700
Allowance for credit losses		(902,300)		(896,000)
Net investment in direct financing and sales-type leases		41,670,100		41,390,700
Operating leases:
Operating lease assets		639,400		800,700
Less accumulated depreciation and amortization		(593,900)		(775,900)
Net investment in operating leases		45,500		24,800
Total net investment in leasing operations	$	41,715,600	$	41,415,500

As of April 1, 2017, the $41.7 million total net investment in leases consists of $16.4 million classified as current and $25.3 million classified as long-term.  As of December 31, 2016, the $41.4 million total net investment in leases consists of $17.0 million classified as current and $24.4 million classified as long-term.

As of April 1, 2017, leased assets with two customers approximated 21%  and  15%, respectively, of the Company’s total assets.

As of April 1, 2017, the Company had no future minimum lease payments receivable for operating leases.  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 2017 and the full fiscal years thereafter as of April 1, 2017:

	Direct Financing and Sales-Type Leases
	Minimum Lease		Income
Fiscal Year	Payments Receivable		Amortization
2017	$	17,651,800	$	3,452,600
2018		13,477,100		1,988,100
2019		6,116,800		355,100
2020		53,300		1,800
2021		8,400		1,000
Thereafter		11,300		500
	$	37,318,700	$	5,799,100

The activity in the allowance for credit losses for leasing operations during the first three months of 2017 and 2016, respectively, is as follows:

	April 1, 2017		March 26, 2016
Balance at beginning of period	$	896,000	$	859,100
Provisions charged to expense		(1,400)		(14,400)
Recoveries		7,700		700
Deductions for amounts written-off		—		(3,800)
Balance at end of period	$	902,300	$	841,600

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:

	April 1, 2017				December 31, 2016
	Investment		Allowance for		Investment		Allowance for
	In Leases		Credit Losses		In Leases		Credit Losses
Collectively evaluated for loss potential	$	42,572,400	$	902,300	$	42,286,700	$	896,000
Individually evaluated for loss potential		—		—		—		—
Total	$	42,572,400	$	902,300	$	42,286,700	$	896,000

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.

	April 1, 2017
	0-60 Days		61-90 Days		Over 90 Days
	Delinquent		Delinquent		Delinquent and
	and Accruing		and Accruing		Accruing		Non-Accrual		Total
Middle-Market	$	41,581,800	$	—	$	—	$	—	$	41,581,800
Small-Ticket		990,600		—		—		—		990,600
Total Investment in Leases	$	42,572,400	$	—	$	—	$	—	$	42,572,400

	December 31, 2016
	0-60 Days		61-90 Days		Over 90 Days
	Delinquent		Delinquent		Delinquent and
	and Accruing		and Accruing		Accruing		Non-Accrual		Total
Middle-Market	$	41,299,600	$	—	$	—	$	—	$	41,299,600
Small-Ticket		987,100		—		—		—		987,100
Total Investment in Leases	$	42,286,700	$	—	$	—	$	—	$	42,286,700