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Note 15 - Leases

6 Months Ended

Apr. 03, 2021

(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 sheets. Lease expense for operating leases with original terms of more than twelve months was $361,000 and $337,000 for the three-month periods ended April 3, 2021 and March 28, 2020, respectively, and $721,000 and $664,000 for the six-month periods ended April 3, 2021 and March 28, 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, which approximates the rate to borrow on a collateralized basis, 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:

	Six Months Ended
(In thousands)	April 3, 2021		March 28, 2020
Cash paid for operating leases included in operating cash flows	$	724	$	672
Right-of-use assets obtained in exchange for new lease obligations		303		613

Supplemental balance sheet information related to leases is as follows:

(In thousands)	April 3, 2021		October 3, 2020
Right-of-use assets:
Other assets	$	2,125	$	2,522

Lease liabilities:
Accrued expenses		1,177		1,230
Other liabilities		956		1,300
Total operating lease liabilities	$	2,133	$	2,530

As of April 3, 2021, our operating leases had a weighted average remaining lease term of 2.0 years and a weighted average discount rate of 4.2%. Aggregate future operating lease payments as of April 3, 2021 are as follows:

(In thousands)
2021	$	1,238
2022		755
2023		211
2024		24
Total future operating lease payments		2,228
Less: imputed interest		(95	)
Present value of lease liabilities	$	2,133