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Note 18 - Commitments | 12 Months Ended
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Dec. 28, 2019
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] |
1 8 . | COMMITMENTS
Executive Severance Agreement s The Company is a party to Executive Severance Agreement (the “Executive Severance Agreement”) each of Bradley S. Vizi, the Company's Executive Chairman and President (dated as of June 1, 2018), and Kevin Miller, the Company’s Chief Financial Officer (dated as of February 28, 2014, as amended), which set forth the terms and conditions of certain payments to be made by the Company to the executive in the event, while employed by the Company, such executive experiences (a) a termination of employment unrelated to a “Change in Control” (as defined therein) or (b) there occurs a Change in Control and either (i) the executive’s employment is terminated for a reason related to the Change in Control or (ii) in the case of Mr. Miller, the executive remains continuously employed with the Company for a period of three months following the Change in Control. Each Executive Severance Agreement also provide for certain payments, if either (a) the executive is involuntarily terminated by the Company for any reason other than “Cause” (as defined therein), “Disability” (as defined therein) or death, or (b) the executive resigns for “Good Reason” (as defined therein), and, in each case, the termination is not a “Termination Related to a Change in Control” (as defined therein). Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 - 02, Leases (Topic 842 ) , which requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with terms greater than 12 months and requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from that applied under the prior standard. After the issuance of Topic 842, the FASB clarified the guidance through several ASUS; hereinafter the collection of lease guidance is referred to as “ASC 842”. On December 30, 2018, the Company adopted ASC 842 using the modified retrospective method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning December 30, 2018 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840, Leases . The standard had a material impact on the Company’s Consolidated Condensed Balance Sheet but did not have a significant impact on the Company’s consolidated net earnings and cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. For leases that commenced before the effective date of ASC 842, the Company elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates before December 30, 2018. As a result of the cumulative impact of adopting ASC 842, the Company recorded operating lease ROU assets of $3.9 million and operating lease liabilities of $4.1 million as of December 30, 2018, primarily related to real estate and office equipment leases, based on the present value of the future lease payments on the date of adoption. The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Amounts recognized as ROU assets related to finance leases are included in property and equipment, net, on the accompanying consolidated balance sheets. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments . The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. The Company has lease agreements which require payments for lease and non-lease components. The Company has elected to account for these as a single lease component with the exception of its real estate leases. The components of lease expense were as follows:
|  | Fifty-Two Week Period Ended December 28, 2019 |
Operating lease cost |  | $ | 2,314 |
Amortization of ROU assets |  | $ | 305 |
Interest on lease liabilities |  |  | 8 |
Total finance lease cost |  | $ | 313 |
Supplemental Cash Flow information related to leases was as follows:
|  | Fifty-Two Week Period Ended December 28, 2019 |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 2,290 |
Operating cash flows from finance leases |  |  | 8 |
Financing cash flows from finance leases |  |  | 310 |
Right of use assets obtained in exchange for lease obligations |  |  |  |
Operating leases |  |  | 7,894 |
Finance leases |  |  | 126 |
Supplemental Balance Sheet information as of December 28, 2019 related to leases was as follows:
Operating leases |  |  |  |
Operating lease right of use assets |  | $ | 5,820 |
Other current liabilities |  | $ | (2,134 | )
Operating lease liabilities |  |  | (3,921 | )
Total operating lease liabilities |  | $ | (6,055 | )
Finance leases |
Property and equipment - (ROU assets) |  | $ | 985 |
Accumulated depreciation |  |  | (475 | )
Property and equipment, net |  | $ | 510 |
Other current liabilities |  | $ | (315 | )
Other long term liabilities |  |  | (189 | )
Total finance lease liabilities |  | $ | (504 | )
Weighted average remaining lease term |  |  |  |
Operating leases (in Years) |  |  | 2.54 |
Finance leases (in Years) |  |  | 1.62 |
Weighted average discount rate |  |  |  |
Operating leases |  |  | 4.11 | %
Finance leases |  |  | 1.78 | %
Maturities of lease liabilities are as follows:
Fiscal Year Ending |  | Operating Leases |  |  | Finance Leases |
2020 |  | $ | 2,334 |  |  | $ | 322 |
2021 |  |  | 1,760 |  |  |  | 169 |
2022 |  |  | 1,301 |  |  |  | 23 |
2023 |  |  | 886 |  |  |  | - |
Thereafter |  |  | 186 |  |  |  | - |
Total lease payments |  |  | 6,467 |  |  |  | 514 |
Less: imputed interest |  |  | (412 | ) |  |  | (10 | )
Total |  | $ | 6,055 |  |  | $ | 504 |
The Company, from time to time, subleases space to other tenants at various office locations under lease agreements. During the fiscal years ended December 28, 2019 and December 29, 2018, payments of approximately $8 and $78, respectively, were received under these leasing arrangements. The Company offsets these payments against its expense for reporting purposes. Rent expense was $2,777 for the fiscal year ended December 29, 2018, which was recorded on a straight-line basis over the term of the lease in accordance with ASC 840, Leases . Future minimum lease payments under non-cancellable leases as of December 31, 2018 as presented in accordance with ASC 840 were as follows:
Fiscal Years |  | Amount |
2019 |  | $ | 2,485 |
2020 |  |  | 1,921 |
2021 |  |  | 1,406 |
2022 |  |  | 1,108 |
2023 |  |  | 782 |
2024 |  |  | 158 |
Total |  | $ | 7,860 |

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