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Contingencies and Commitments | 8 Months Ended
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Jul. 07, 2023
Commitments and Contingencies Disclosure [Abstract] |
Contingencies and Commitments | Note 3 – Contingencies and Commitments: The Company generally 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 leased three long-haul trucks received during fiscal year 2019. The six-year leases for these trucks expire in fiscal year 2025. We returned one long-haul truck on June 22, 2023, for a loss of $12 in an effort to reduce overall cost of delivering products. Amortization of equipment as a finance lease was $3 during the thirty-six weeks ended July 7, 2023. The Company leased one box truck for a market value of $27 on April 17, 2023, and that lease term is two years. The Company performed a detailed analysis and determined that the only indications of a long-term lease in addition to transportation leases for long-haul trucks were the warehouse leases with Hogshed Ventures, LLC and Racine Partners 4333 LLC. The Company’s five-year term lease with Racine Partners 4333 LLC, was effective June 1, 2022. An ROU asset of $3,569 and corresponding liability for warehouse storage space of $3,617 as of July 7, 2023, was recorded for Racine Partners 4333 LLC for 43rd Street in Chicago, Illinois. This lease does not provide an implicit rate and we estimated our incremental interest rate to be approximately 3.68%. 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. A ROU asset and corresponding liability for warehouse storage space was recorded for $372 for Hogshed Ventures, LLC for 40th Street in Chicago, Illinois, as of July 7, 2023. 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 was set to terminate on June 30, 2023, but was extended one year on March 1, 2023 and as a result will terminate on June 30, 2024. 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 ROU asset. The lease with Hogshed Ventures, LLC does not provide an implicit rate and we estimated our incremental interest rate to be approximately 1.6% for the lease expiring June 30, 2023 and 5.49% for the extended lease expiring June 30, 2024. 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 ROU assets: Schedule of Future Minimum Lease Payments
Fiscal Year |  | Financial Obligations |
2023 |  | $ | 910 |
2024 |  |  | 681 |
2025 |  |  | 932 |
2026 |  |  | 991 |
Later Years |  |  | 604 |
Total Minimum Lease Payments(a) |  | $ | 4,118 |
Less: Amount representing executory costs |  |  | (23 | )
Less: Amount representing interest(b) |  |  | (2 | )
Present value of future minimum lease payments(c) |  | $ | 4,093 |
(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 are finance leases of $61 and $44 under Other current liabilities and Other non-current liabilities, respectively, and ROU leases payable of $1,235 and $2,753 are disclosed as line items Current right-of-use leases payable and long-term right-of-use leases payable, respectively, as of July 7, 2023.
We purchase large quantities of pork, beef, and flour. These ingredients are generally available from a number of different suppliers although the availability of these ingredients is subject to seasonal variation. We build ingredient inventories to take advantage of downward trends in seasonal prices or anticipated supply limitations. We purchase bulk flour under short-term fixed price contracts at current market prices. The contracts are usually effective for and settle within three months or less at a fixed price and quantity. We monitor and manage our ingredient costs to help negate volatile daily swings in market prices when possible. We do not participate in the commodity futures market or hedging to limit commodity exposure. 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.

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