Leases

9 Months Ended

Sep. 25, 2020

Leases [Abstract]

Leases

6. Leases

The Company has operating leases for office space and, to a much lesser extent, operating leases for equipment. The Company’s office leases are between terms of 1 year and 10 years. Rents usually increase annually in accordance with defined rent steps or are based on current year consumer price index adjustments. Some of the lease agreements contain one or more of the following provisions: tenant allowances, rent holidays, lease premiums, and rent escalation clauses. There are typically no purchase options, residual value guarantees or restrictive covenants. When renewal options exist, the Company generally does not deem them to be reasonably certain to be exercised, and therefore the amounts are not recognized as part of the Company’s lease liability, nor our right of use asset.

The components of lease expense were as follows (in thousands):

	September 25, 2020
	Quarter		Nine Months
Operating lease cost	$	668	$	1,835
Total net lease costs	$	668	$	1,835

6. Leases (continued)

The weighted average remaining lease term is 4.5 years.  Assuming the Company exercises its opt-out option in year 5 for the London office lease, the weighted average remaining lease term would be 3.0 years. The weighted average discount rate utilized is 4%. The discount rates applied to each lease, reflects the Company’s estimated incremental borrowing rate. This includes an assessment of the Company’s credit rating to determine the rate that the Company would have to pay to borrow, on a collateralized basis for a similar term, an amount equal to the Company’s lease payments in a similar economic environment. For the quarter and nine months ended September 25, 2020, the Company paid $0.7 million and $1.8 million, respectively, from operating cash flows for operating leases.

Future minimum lease payments under non-cancellable operating leases as of September 25, 2020, were as follows (in thousands):

2020 (excluding the nine months ended September 25, 2020)	$	689
2021		2,572
2022		2,281
2023		1,315
2024		982
2025 and thereafter		1,251
Total lease payments		9,090
Less imputed interest		(817	)
Total	$	8,273

As of September 25, 2020, the Company does not have any additional operating leases that have not yet commenced. The Company did extend its Miami office lease effective July 1, 2020, for an additional four years.