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Note 15 - Leases

9 Months Ended

Jun. 27, 2020

(15) Leases

We have operating leases for certain equipment, office space and vehicles. We determine whether an arrangement is a lease at its inception if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases with an initial term of twelve months or less are not recorded on our consolidated balance sheet. Lease expense for operating leases with original terms of more than twelve months was $289,000 and $953,000 for the three- and nine-month periods ended June 27, 2020, respectively.

Most of our leases include options to extend or terminate the leases which are exercised at our sole discretion. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate as of the commencement date in determining the present value of lease payments.

Supplemental cash flow and non-cash information related to leases is as follows:

	Nine Months Ended
(In thousands)	June 27, 2020
Cash paid for operating leases included in operating cash flows	$	959
Right-of-use assets obtained in exchange for new lease obligations		755

Supplemental balance sheet information related to leases is as follows:

(In thousands)	June 27, 2020
Right-of-use assets:
Other assets	$	1,838

Lease liabilities:
Accrued expenses		942
Other liabilities		883
Total operating lease liabilities	$	1,825

As of June 27, 2020, our operating leases had a weighted average remaining lease term of 2.3 years and a weighted average discount rate of 5.0%. Aggregate future operating lease payments as of June 27, 2020 are as follows:

(In thousands)
2020	$	990
2021		633
2022		207
2023		74
2024		4
Thereafter		-
Total future operating lease payments		1,908
Less: imputed interest		(83	)
Present value of lease liabilities	$	1,825