Note M – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. As of October 5, 2019, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases.

ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information as follows:


	Three Months Ended		Nine Months Ended
	October 5,		October 5,
All Amounts in Thousands	2019		2019

Lease Expense
Operating Lease Cost	$	164	$	608
Short-term Lease Cost		149		348
Variable Lease Cost		47		188
Total Operating Lease Cost	$	360	$	1,144

Operating Lease – Operating Cash Flows	$	156	$	552
New ROU Assets – Operating Leases	$	108	$	833

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:


	Period Ended
	October 5,
	2019
Weighted Average Remaining Lease Term – Operating Leases	2.03 years
Weighted Average Discount Rate – Operating Leases	5.00	%

Future minimum lease payments under non-cancellable leases as of October 5, 2019 were as follows:


All Amounts in Thousands

Year 1	$	733
Year 2		483
Year 3		75
Year 4		27
Year 5		10
Thereafter		—
Total future minimum lease payments		1,328
Less imputed interest		(64)
Total	$	1,264

Reported as of October 5, 2019
Current operating lease liabilities		689
Long-term operating lease liabilities		575
Total	$	1,264