Leases

9 Months Ended

Sep. 28, 2019

Leases [Abstract]

Leases

NOTE 9 – LEASES

The Company leases land, office space and equipment. Arrangements are assessed at inception to determine if a lease exists and, with the adoption of ASC 842, “Leases,” right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Because the Company’s leases do not provide an implicit rate of return, the Company uses its incremental borrowing rate at the inception of a lease to calculate the present value of lease payments. The Company has elected to apply the short-term lease exception for all asset classes, excluding lease liabilities from the balance sheet and recognizing the lease payments in the period they are incurred.

The components of lease expense were as follows (dollars in thousands):

	Financial Statement Classification	Three months ended September 28, 2019		Nine months ended September 28, 2019
Finance leases:
Amortization expense	SG&A Expense	$	4	$	4
Interest expense	Interest expense, net		2		2
			6		6
Operating leases:
Operating costs	Operating costs		427		845
Selling, general and administrative expenses	SG&A Expense		476		1,398
			903		2,243
Total lease expense		$	909	$	2,249

Supplemental balance sheet information related to leases was as follows (dollars in thousands):

	Financial Statement Classification	September 28, 2019
ROU Assets:
Operating leases	Right of Use asset	$	2,377
Finance leases	Property and equipment, net		232
Total ROU Assets:		$	2,609
Lease liabilities:
Current liabilities
Operating leases	Current portion of leases	$	947
Finance leases	Current portion of leases		47
Noncurrent Liabilities:
Operating leases	Long Term Leases		1,467
Finance leases	Long Term Leases		185
Total lease liabilities		$	2,646

The weighted average remaining lease term and weighted average discount rate were as follows:

	At September 28, 2019
Weighted average remaining lease term (years)
Operating leases		2.4
Finance leases		4.9
Weighted average discount rate
Operating leases		3.7	%
Finance leases		14.5	%

Maturities of operating lease liabilities as of September 28, 2019 are as follows (dollars in thousands):

Year ending:	Operating leases			Finance leases			Total
2019 (remaining months)	$	249		$	14		$	263
2020		1,012			55			1,067
2021		957			55			1,012
2022		289			55			344
2023		-			55			55
2024		-			36			36
Total lease payments		2,507			270			2,777
Less: imputed interest		(92	)		(39	)		(131	)
Total lease liabilities	$	2,415		$	231		$	2,646