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Note N - Lease Liabilities | 6 Months Ended
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Dec. 27, 2019
Notes to Financial Statements |
Leases of Lessee Disclosure [Text Block] |
N. | Lease Liabilities
The Company leases certain office and warehouse space, as well as production and office equipment. The Company determines if an arrangement is a lease at contract inception. The lease term begins upon lease commencement, which is when the Company takes possession of the asset, and may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. As its lease agreements typically do not provide an implicit rate, the Company primarily uses an incremental borrowing rate based upon the information available at lease commencement. In determining the incremental borrowing rate, the Company considers its current borrowing rate, the term of the lease, and the economic environments where the lease activity is concentrated. The components of lease expense were as follows:
|  | For the Quarter Ended |  |  | For the Two Quarters Ended |
|  | December 27, 2019 |  |  | December 28, 2018 |  |  | December 27, 2019 |  |  | December 28, 2018 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  | $ | 43 |  |  | $ | 1 |  |  | $ | 79 |  |  | $ | 1 |
Interest on lease liabilities |  |  | 13 |  |  |  | - |  |  |  | 25 |  |  |  | - |
Operating lease cost |  |  | 815 |  |  |  | 850 |  |  |  | 1,596 |  |  |  | 1,730 |
Short-term lease cost |  |  | 9 |  |  |  | 12 |  |  |  | 26 |  |  |  | 22 |
Variable lease cost |  |  | 8 |  |  |  | (3 | ) |  |  | 24 |  |  |  | 5 |
Total lease cost |  |  | 888 |  |  |  | 860 |  |  |  | 1,750 |  |  |  | 1,758 |
Less: Sublease income |  |  | (54 | ) |  |  | (1 | ) |  |  | (107 | ) |  |  | (17 | )
Net lease cost |  | $ | 834 |  |  | $ | 859 |  |  | $ | 1,643 |  |  | $ | 1,741 |
Other information related to leases was as follows:
|  | For the Quarter Ended |  |  | For the Two Quarters Ended |
|  | December 27, 2019 |  |  | December 28, 2018 |  |  | December 27, 2019 |  |  | December 28, 2018 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 805 |  |  | $ | 850 |  |  | $ | 1,584 |  |  | $ | 1,725 |
Operating cash flows from finance leases |  |  | 38 |  |  |  | 1 |  |  |  | 68 |  |  |  | 2 |
Financing cash flows from finance leases |  |  | 13 |  |  |  | - |  |  |  | 25 |  |  |  | - |
Right-of-use-assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating leases |  |  | 2,073 |  |  |  | 125 |  |  |  | 2,424 |  |  |  | 12,252 |
Finance leases |  |  | 53 |  |  |  | - |  |  |  | 277 |  |  |  | - |
Weighted average remaining lease term (years): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating leases |  |  |  |  |  |  |  |  |  |  | 11.0 |  |  |  | 11.2 |
Finance lease |  |  |  |  |  |  |  |  |  |  | 4.4 |  |  |  | 3.5 |
Weighted average discount rate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating leases |  |  |  |  |  |  |  |  |  |  | 7.4 | % |  |  | 7.7 | %
Finance leases |  |  |  |  |  |  |  |  |  |  | 6.9 | % |  |  | 4.0 | %
Approximate future minimum rental commitments under non-cancellable leases as of December 27, 2019 were as follows:
|  | Operating Leases |  |  | Finance Leases |
2020 |  | $ | 1,553 |  |  | $ | 103 |
2021 |  |  | 2,598 |  |  |  | 206 |
2022 |  |  | 2,096 |  |  |  | 206 |
2023 |  |  | 1,965 |  |  |  | 198 |
2024 |  |  | 1,792 |  |  |  | 166 |
Thereafter |  |  | 12,455 |  |  |  | 8 |
Total future lease payments |  |  | 22,459 |  |  |  | 887 |
Less: Amount representing interest |  |  | (7,270 | ) |  |  | (123 | )
Present value of future payments |  | $ | 15,189 |  |  | $ | 764 |
The following table provides a summary of leases recorded on the consolidated balance sheet.
| Balance Sheet Location |  | December 27, 2019 |  |  | June 30, 2019 |
Lease Assets |  |  |  |  |  |  |  |  |
Operating lease right-of-use assets | Property, plant and equipment, net |  | $ | 15,180 |  |  | $ | 14,138 |
Finance lease right-of-use assets | Property, plant and equipment, net |  |  | 746 |  |  |  | 545 |
Lease Liabilities |  |  |  |  |  |  |  |  |
Operating lease liabilities | Accrued liabilites |  | $ | 1,936 |  |  | $ | 1,933 |
Operating lease liabilities | Lease obligations |  |  | 13,253 |  |  |  | 12,197 |
Finance lease liabilities | Accrued liabilites |  |  | 167 |  |  |  | 104 |
Finance lease liabilities | Lease obligations |  |  | 597 |  |  |  | 449 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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