Annual report pursuant to Section 13 and 15(d)

Note 13 - Commitments and Contingencies

v3.19.1
Note 13 - Commitments and Contingencies
12 Months Ended
Dec. 30, 2018
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
1
3
.
Commitments and contingencies
 
Operating leases
 
 
The Company leases office equipment, software and office space under various non-cancellable operating leases. Minimum future payments under non-cancellable operating lease agreements are as follows:
 
2019
  $
2,715
 
2020
   
1,509
 
2021
   
1,003
 
2022
   
831
 
2023
   
741
 
2024 and thereafter
   
1,235
 
Total
  $
8,034
 
 
 
 
Operating lease expense for the periods ended
December 30, 2018,
December 31, 2017
and
January 1, 2017
was
$2,947,
$2,412
and
$2,296,
respectively. For period ended
December 30, 2018,
$2,257
was included in cost of sales,
$690
was included in selling general and administrative expenses. For period ended
December 31, 2017,
$1,519
was included in cost of sales,
$893
was included in selling general and administrative expenses. For period ended
January 1, 2017,
$1,558
was included in cost of sales,
$738
was included in selling general and administrative expenses.
 
Certain of the Company’s facility leases include renewal options and normal escalation clauses. Renewal options are included in the lease term if reasonably assured. Escalation clauses are accounted for on a straight-line basis over the lease term.
 
Contingencies
 
The General Corporation Law of the State of Delaware allows a corporation to eliminate the personal liability of directors to the corporation or to any of its stockholders for monetary damages for a breach of his fiduciary duty as a director, except in the case where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. The Company has entered into indemnification agreements with each director, which provide that the Company shall, subject to certain exceptions, indemnify and pay, advance or reimburse the costs of defense of such person who is made party to a proceeding by reason of their indemnified capacities. Each indemnified party agrees to repay any payment, advance or reimbursement of expenses made by the Company to such person if it is determined, following the final disposition of the claim, that the person is
not
entitled to indemnification by the Company with respect to a claim for which indemnification was obtained.
 
The nature of the indemnification prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. The Company has purchased directors’ and officers’ liability insurance.
No
amount has been accrued in the consolidated balance sheet as at
December 30, 2018
with respect to this indemnity.
 
In the normal course of business, the Company
may
be subject to litigation and claims from customers, suppliers and former employees. Management believes that adequate provisions have been recorded in the accounts, where required. Although it is
not
possible to estimate the extent of potential costs, if any, management believes that the ultimate resolution of such contingencies would
not
have a material adverse effect on the financial position, results of operations and cash flows of the Company.
 
 
Purchase Obligations
 
Purchase obligations
not
recorded on the balance sheet as at
December 30, 2018
consist of insurance installments of
$215
to be paid during
2019
(
December 31, 2017 -
$169
) (
January 1, 2017 -
$187
).
 
Purchase obligations
not
recorded on the balance sheet as at
December 30, 2018
consist of open non-cancellable purchase orders for raw materials for
$39,951
to be paid during calendar year
2019
(
December 31, 2017 -
$14,391
) (
January 1, 2017 -
$13,602
).