Leases

9 Months Ended

Sep. 30, 2022

Note 8 – Leases

Finance Leases

The Company entered into finance leases primarily related to purchases of equipment used for manufacturing, computer-related equipment or furniture and fixtures. These finance leases are two to five years in length and have fixed payment amounts for the term of the contract and have options to purchase the assets at the end of the lease term. Supplemental balance sheet information related to finance leases consisted of the following (dollars in thousands):

	September 30, 2022			December 31, 2021
Machinery and equipment	$	28		$	35
Computer equipment and software		16			506
Furniture and fixtures		475			475
Finance lease right-of-use assets, gross		519			1,016
Less accumulated depreciation		(139	)		(510	)
Finance lease right-of-use assets, net	$	380		$	506

Current finance lease obligations	$	167		$	127
Long-term finance lease obligations		252			382
Total finance lease liability	$	419		$	509
Weighted-average remaining lease term (in years)		2.5			3.2
Weighted-average discount rate		4.11	%		4.02	%

Note 8 – Leases (Continued)

Finance Leases (Continued)

Supplemental cash flow information related to finance leases consisted of the following (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2022		October 1, 2021		September 30, 2022		October 1, 2021
Amortization of finance lease right-of-use asset	$	39	$	15	$	121	$	71
Interest on finance lease liabilities		5		1		13		6
Cash paid for amounts included in the measurement of finance lease liabilities:
Operating cash flows		5		1		13		6
Financing cash flows		40		36		85		314

Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are two to ten years in length with options to extend. The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease. Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator. For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term. Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):

	September 30, 2022			December 31, 2021
Machinery and equipment	$	762		$	760
Computer equipment and software		446			472
Real property		33,751			34,426
Operating lease right-of-use assets, gross		34,959			35,658
Less accumulated depreciation		(5,456	)		(4,348	)
Operating lease right-of-use assets, net	$	29,503		$	31,310

Current operating lease obligations	$	3,474		$	3,283
Long-term operating lease obligations		26,032			28,269
Total operating lease liability	$	29,506		$	31,552
Weighted-average remaining lease term (in years)		7.6			7.8
Weighted-average discount rate		4.04	%		3.56	%

Supplemental cash flow information related to operating leases was as follows (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2022		October 1, 2021		September 30, 2022		October 1, 2021
Operating lease cost	$	1,167	$	931	$	3,471	$	2,571
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,103		846		3,069		2,432
Right-of-use assets obtained in exchange for new operating lease liabilities		126		15,212		1,166		19,219

Note 8 – Leases (Continued)

Maturities of Lease Liabilities

Maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of September 30, 2022 is as follows (in thousands):

As of September 30, 2022 12 Months Ended	Operating Leases			Finance Leases
September 2023	$	5,179		$	181
September 2024		5,152			176
September 2025		4,224			85
September 2026		3,659			—
September 2027		3,671			—
Thereafter		13,099			—
Total future minimum lease payments	$	34,984		$	442
Less amounts representing interest		(5,478	)		(23	)
Present value of future minimum lease payments	$	29,506		$	419