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Contingencies and Commitments
 3 Months Ended
Jan. 21, 2022
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Commitments

Note 3 – Contingencies and Commitments:

 

The Company leases warehouse and/or office facilities throughout the United States through month-to-month rental agreements. In the case of month-to-month lease or rental agreements with terms of 12 months or less, the Company made an accounting policy election to not recognize lease assets and liabilities and record them on a straight-line basis over the lease term. For further information regarding our lease accounting policy, please refer to Note 1 – Summary of Significant Accounting Policies — Leases.

 

The Company leases three long-haul trucks received during fiscal year 2019. The six-year leases for these trucks expire in 2025. Amortization of equipment under capital lease was $70 in 2021. The Company leased one long-haul truck for $40 received during fiscal year 2021, and that lease term is two years.

 

The Company performed a detailed analysis and determined that the only indication of a long-term lease in addition to transportation lease for long-haul trucks was Hogshed Ventures, LLC. A right-of-use asset and corresponding liability for warehouse storage space was recorded for $555 for Hogshed Ventures, LLC for 40th Street in Chicago, Illinois, as of January 21, 2022. We lease this space under a non-cancelable operating lease. This lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out clauses. Further this lease does not contain contingent rent provisions. This lease terminates on June 30, 2023. This lease includes both lease (e.g., fixed rent) and non-lease components (e.g., real estate taxes, insurance, common-area and other maintenance costs). The non-lease components are deemed to be executory costs and are included in the minimum lease payments used to determine the present value of the operating lease obligation and related right-of-use asset.

 

This lease does not provide an implicit rate and we estimated our incremental interest rate to be approximately 1.6%. We used our estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments.

 

The following is a schedule by years of future minimum lease payments for transportation leases and right-of-use assets:

Fiscal Year  Financing
Obligations		 
2022  $419 
2023   381 
2024   101 
2025   70 
Later Years   - 
Total Minimum Lease Payments(a)  $971 
Less: Amount representing executory costs   (53)
Less: Amount representing interest(b)   (7)
Present value of future minimum lease payments(c)  $911 

 

(a) Minimum payments exclude contingent rentals based on actual mileage and adjustments of rental payments based on the Consumer Price Index.
(b) Amount necessary to reduce net minimum lease payments to present value calculated at the Company’s incremental borrowing rate at the inception of the leases.
(c) Reflected in Part I. Financial Information, Item 1. a. condensed consolidated balance sheets as current and noncurrent obligations under capital leases of $161 and $195, and right-of-use assets of $382 and $173, respectively as of January 21, 2022.

 

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations.

 

Most flour purchases are made at market price with contracts. However, the Company may purchase bulk flour at current market prices under short-term (30 - 120 days) fixed price contracts during the normal course of business. Under these arrangements, the Company is obligated to purchase specific quantities at fixed prices, within the specified contract period. These contracts provide for potential price increases if agreed quantities are not purchased within the specified contract period. The contracts are not material. These contracts are typically settled within a month’s time and no significant contracts remain open at the close of the quarterly or annual reporting period. No significant contracts remained unfulfilled on January 21, 2022. The Company does not participate in the commodity futures market or hedging to limit commodity exposure.