Leases

6 Months Ended

Jun. 27, 2020

Leases [Abstract]

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				Six Months Ended
	Financial Statement Classification	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Finance leases:
Amortization expense	SG&A Expense	$	19	$	—	$	38	$	—
Interest expense	Interest expense, net		5		—		10		—
Total finance lease expense			24		—		48
Operating leases:
Operating costs	Operating costs		152		205		371		418
Selling, general and administrative expenses	SG&A Expense		467		435		905		922
Total operating lease expense			619		640		1,276		1,340
Short-term leases:
Operating costs	Operating costs		—		—		—		—
Selling, general and administrative expenses	SG&A Expense		—		136		—		255
Total short-term lease expense			—		136		—		255
Total lease expense		$	643	$	776	$	1,324	$	1,595

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

	Financial Statement Classification	June 27, 2020		December 28, 2019
ROU Assets:
Operating leases	Right of Use asset	$	2,367	$	2,133
Finance leases	Property and equipment, net		494		318
Total ROU Assets:		$	2,861	$	2,451
Lease liabilities:
Current liabilities
Operating leases	Current portion of leases	$	1,487	$	961
Finance leases	Current portion of leases		118		80
Noncurrent Liabilities:
Operating leases	Long-term leases		947		1,220
Finance leases	Long-term leases		376		238
Total lease liabilities		$	2,928	$	2,499

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

	At June 27, 2020
Weighted average remaining lease term (years)
Operating leases		1.7
Finance leases		4.6
Weighted average discount rate
Operating leases		2.3	%
Finance leases		6.6	%

Maturities of lease liabilities as of June 27, 2020 are as follows (dollars in thousands):

Years ending:	Operating leases			Finance leases			Total
2020 (remaining months)		754			66			820
2021		1,448			133			1,581
2022		289			112			401
2023		—			92			92
2024		—			72			72
2025		—			37			37
2026		—			18			18
Total lease payments		2,491			530			3,021
Less: imputed interest		(57	)		(36	)		(93	)
Total lease liabilities	$	2,434		$	494		$	2,928