LEASES

6 Months Ended

Jun. 26, 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				Six Months Ended
	Financial Statement Classification	June 26, 2021		June 27, 2020		June 26, 2021		June 27, 2020
Finance leases:
Amortization expense	SG&A Expense	$	22	$	19	$	41	$	38
Interest expense	Interest expense, net		5		5		9		10
Total finance lease expense			27		24		50		48
Operating leases:
Operating costs	Operating costs		107		152		259		371
Selling, general and administrative expenses	SG&A Expense		416		467		865		905
Total operating lease expense			523		619		1,124		1,276
Total lease expense		$	550	$	643	$	1,174	$	1,324

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

	Financial Statement Classification	June 26, 2021		December 26, 2020
ROU Assets:
Operating leases	Right of Use asset	$	1,210	$	1,628
Finance leases	Property and equipment, net		382		442
Total ROU Assets:		$	1,592	$	2,070
Lease liabilities:
Current liabilities
Operating leases	Current portion of leases	$	1,058	$	1,421
Finance leases	Current portion of leases		122		120
Noncurrent Liabilities:
Operating leases	Long Term Leases		202		286
Finance leases	Long Term Leases		265		322
Total lease liabilities		$	1,647	$	2,149

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

	At June 26, 2021
Weighted average remaining lease term (years)
Operating leases		1.2
Finance leases		3.8
Weighted average discount rate
Operating leases		0.9	%
Finance leases		5.1	%

Maturities of operating lease liabilities as of June 26, 2021 are as follows (dollars in thousands):

Years ending:	Operating leases			Finance leases			Total
2021 (remaining months)		612			67			679
2022		658			114			772
2023		-			93			93
2024		-			73			73
2025 and thereafter					62			62
Total lease payments		1,270			409			1,679
Less: imputed interest		(12	)		(20	)		(32	)
Total lease liabilities	$	1,258		$	389		$	1,647