XML 24 R10.htm IDEA: XBRL DOCUMENT

Investment in Leasing Operations:

12 Months Ended

Dec. 30, 2023

3. Investment in Leasing Operations:

In May 2021, the Company made the decision to no longer solicit new leasing customers in its middle-market leasing business and will pursue an orderly run-off of this leasing portfolio.

Investment in leasing operations consists of the following:


	December 30, 2023		December 31, 2022
Direct financing and sales-type leases:
Minimum lease payments receivable	$	77,100	$	294,100
Estimated unguaranteed residual value of equipment		17,700		461,700
Unearned lease income, net of initial direct costs deferred		(6,700)		(103,800)
Security deposits		(28,100)		(303,300)
Total investment in direct financing and sales-type leases		60,000		348,700
Allowance for credit losses		(1,500)		(7,100)
Net investment in direct financing and sales-type leases		58,500		341,600
Operating leases:
Operating lease assets		876,500		716,100
Less accumulated depreciation and amortization		(859,900)		(707,400)
Net investment in operating leases		16,600		8,700
Total net investment in leasing operations	$	75,100	$	350,300

As of December 30, 2023, the $75,100 total net investment in leases consisted of $75,100 classified as current and $0 classified as long-term. As of December 31, 2022, the $350,300 total net investment in leases consisted of $344,900 classified as current and $5,400 classified as long-term.

As of December 30, 2023 and December 31, 2022, no customers had leased assets totaling more than 10% of the Company’s total assets.

Future minimum lease payments receivable under lease contracts and the amortization of unearned lease income, net of initial direct costs deferred, is as follows as of December 30, 2023:


	Direct Financing and Sales-Type Leases
	Minimum Lease		Income
Fiscal Year	Payments Receivable		Amortization
2024	$	77,100	$	6,700
Thereafter		—		—
	$	77,100	$	6,700

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 Company experienced no credit losses in its lease portfolio during the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021. At December 30, 2023 and December 31, 2022, no leases in the Company’s lease portfolio were past due, and all were on accrual status.

The Company leases high-technology and other business-essential equipment to its leasing customers. Upon expiration of the initial term or extended lease term, depending on the structure of the lease, the customer may return the equipment, renew the lease for an additional term, or purchase the equipment. Due to the uncertainty of such outcome at the end of the lease term, the lease as recorded at commencement represents only the current terms of the agreement. As a lessor, the Company’s leases do not contain non-lease components. The residual values reflect the estimated amounts to be received at lease termination from sales or other dispositions of leased equipment to unrelated parties. The leased equipment residual values are based on the Company’s best estimate. The Company’s risk management strategy for its residual value includes the contractual obligations of its customers to maintain, service, and insure the leased equipment, the use of third party remarketers as well as the analytical review of historical asset dispositions.

Leasing income as presented on the Consolidated Statements of Operations consists of the following:


	Year Ended		Year Ended			Year Ended
	December 30, 2023		December 31, 2022			December 25, 2021
Interest income on direct financing and sales-type leases	$	246,200	$	760,500	-	$	1,755,200
Selling profit (loss) at commencement of sales-type leases		94,900		1,326,900			1,829,800
Operating lease income		2,999,400		2,243,300			2,017,300
Income on sales of equipment under lease		834,500		1,798,000			4,799,400
Other		591,200		809,000			746,600
Leasing income	$	4,766,200	$	6,937,700		$	11,148,300