Note 5 – Licensing Agreements

The Company has entered into licensing agreements that provide for royalty payments based on a percentage of sales with certain minimum guaranteed amounts. These royalty amounts are accrued based upon historical sales rates adjusted for current sales trends by customers. Royalty expense is included in cost of products sold in the accompanying unaudited consolidated statements of income and amounted to $1.5 million and $1.4 million for the three months ended December 26, 2021 and December 27, 2020, respectively, and amounted to $4.2 million for each of the nine months ended December 26, 2021 and December 27, 2020.