Leases

3 Months Ended

Mar. 29, 2024

11. Leases

Most leases held by the Company expire between 2024 and 2036. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. Certain leases include one or more options to renew the lease terms from one to ten years and options to terminate the leases within one year. The exercise of lease renewal or termination options is at the Company’s sole discretion; therefore, the majority of renewal options to extend the lease terms are not included in the Company’s right-of-use assets and operating lease liabilities as they are not reasonably certain of being exercised. The Company regularly evaluates the renewal options and includes the renewal periods in the lease term when they are reasonably certain of being exercised. The depreciable lives of the right-of-use assets and leasehold improvements are limited to the expected lease terms.

The following table summarizes the components of lease costs (in thousands):


	Three Months Ended
	March 29,		March 31,
	2024		2023
Operating lease cost	$	2,967	$	2,638
Finance lease cost
Amortization of right-of-use assets		151		150
Interest on lease liabilities		62		71
Variable lease cost		251		236
Total lease cost	$	3,431	$	3,095

The following table provides additional details of balance sheet information related to the Company’s leases (in thousands, except lease term and discount rate):


	March 29,			December 31,
	2024			2023
Operating leases
Operating lease right-of-use assets	$	44,649		$	38,302

Current portion of operating lease liabilities	$	9,240		$	8,189
Operating lease liabilities		42,926			37,345
Total operating lease liabilities	$	52,166		$	45,534

Finance leases
Property, plant and equipment, gross	$	9,582		$	9,582
Accumulated depreciation		(6,423	)		(6,272	)
Finance lease assets included in property, plant and equipment, net	$	3,159		$	3,310

Accrued expenses and other current liabilities	$	728		$	718
Other liabilities		3,748			3,934
Total finance lease liabilities	$	4,476		$	4,652

Weighted-average remaining lease term (in years):
Operating leases		7.6			7.6
Finance leases		5.3			5.5

Weighted-average discount rate:
Operating leases		4.69	%		4.84	%
Finance leases		5.54	%		5.54	%

The following table provides additional details of cash flow information related to the Company’s leases (in thousands):


	Three Months Ended
	March 29,		March 31,
	2024		2023
Cash paid for amounts included in lease liabilities:
Operating cash flows from finance leases	$	62	$	71
Operating cash flows from operating leases	$	2,123	$	1,988
Financing cash flows from finance leases	$	176	$	156

Supplemental non-cash information:
Right-of-use assets obtained in exchange for new operating lease liabilities(1)	$	8,676	$	142

(1) The amount for the three months ended March 29, 2024 includes $8.1 million of right-of-use assets acquired as part of the Motion Solutions acquisition.

Future minimum lease payments under operating and finance leases expiring subsequent to March 29, 2024, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands):


Year Ending December 31,	Operating Leases			Finance Leases
2024 (remainder of year)	$	8,303		$	715
2025		10,997			954
2026		9,268			979
2027		8,104			1,003
2028		5,533			1,003
Thereafter		21,373			502
Total minimum lease payments		63,578			5,156
Less: Interest		(11,412	)		(680	)
Present value of lease liabilities	$	52,166		$	4,476