LEASES

9 Months Ended

Sep. 25, 2021

LEASES

NOTE 9 - 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):

		Three Months Ended				Nine Months Ended
	Financial Statement Classification	September 25, 2021		September 26, 2020		September 25, 2021		September 26, 2020
Finance leases:
Amortization expense	SG&A Expense	$	19	$	26	$	61	$	64
Interest expense	Interest expense, net		4		5		13		15
Total finance lease expense			23		31		74		79
Operating leases:
Operating costs	Operating costs		131		135		391		506
Selling, general and administrative expenses	SG&A Expense		462		459		1,327		1,364
Total operating lease expense			593		594		1,718		1,870
Total lease expense		$	616	$	625	$	1,792	$	1,949

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

	Financial Statement Classification	September 25, 2021		December 26, 2020
ROU Assets:
Operating leases	Right of use asset	$	3,179	$	1,628
Finance leases	Property and equipment, net		352		442
Total ROU Assets:		$	3,531	$	2,070
Lease liabilities:
Current liabilities
Operating leases	Current portion of leases	$	1,013	$	1,421
Finance leases	Current portion of leases		113		120
Noncurrent Liabilities:
Operating leases	Long-term leases		2,267		286
Finance leases	Long-term leases		235		322
Total lease liabilities		$	3,628	$	2,149

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

	At September 25, 2021
Weighted average remaining lease term (years)
Operating leases		5.3
Finance leases		3.8
Weighted average discount rate
Operating leases		1.0	%
Finance leases		5.1	%

Maturities of operating lease liabilities as of September 25, 2021 are as follows (dollars in thousands):

Years ending:	Operating leases			Finance leases			Total
2021 (remaining months)		267			33			300
2022		931			114			1,045
2023		336			93			429
2024		232			73			305
2025 and thereafter		1,541			56			1,597
Total lease payments		3,307			369			3,676
Less: imputed interest		(27	)		(21	)		(48	)
Total lease liabilities	$	3,280		$	348		$	3,628