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Leases

9 Months Ended

Jan. 02, 2022

The Company leases manufacturing facilities, distribution centers, office space, vehicles and other equipment under non-cancellable leases with initial terms typically ranging from 1 to 17 years.

Short term leases with an initial term of 12 months or less are not presented on the balance sheet and expense is recognized on a straight-line basis over the lease term.

The following table presents lease assets and liabilities and their balance sheet classification:


	Classification	As of January 2, 2022		As of March 31, 2021
Operating Leases:
Right-of-use assets	Other assets	$	63,699	$	62,159
Operating lease current liabilities	Accrued expenses	20,108		21,774
Operating lease non-current liabilities	Other liabilities	45,701		42,528
Finance Leases:
Right-of-use assets	Property, plant, and equipment, net	$	402	$	573
Finance lease current liabilities	Accrued expenses	203		236
Finance lease non-current liabilities	Other liabilities	280		435

The components of lease expense for the third quarter and nine months ended January 2, 2022 and January 3, 2021 were as follows:


		Quarter ended				Nine months ended
	Classification	January 2, 2022		January 3, 2021		January 2, 2022		January 3, 2021
Operating Leases:
Operating lease cost	Operating expenses	$	6,649	$	6,635	$	19,787	$	20,316
Variable lease cost	Operating expenses	2,288		1,797		7,215		5,529
Short term lease cost	Operating expenses	1,497		1,610		5,067		5,016
Finance Leases:
Depreciation	Operating expenses	$	58	$	53	$	177	$	141
Interest expense	Interest expense	6		8		21		22
Total		$	10,498	$	10,103	$	32,267	$	31,024

The following table presents the weighted average lease term and discount rates for leases as of January 2, 2022 and March 31, 2021:

January 2, 2022

March 31, 2021

Operating Leases:

Weighted average remaining lease term (years)

5.7 years

5.5 years

Weighted average discount rate

4.61%

5.16%

Finance Leases:

Weighted average remaining lease term (years)

2.5 years

3.1 years

Weighted average discount rate

4.80%

4.81%

The following table presents future payments due under leases reconciled to lease liabilities as of January 2, 2022:


	Finance Leases		Operating Leases
Three months ended March 31, 2022	$	65	$	6,459
Year ended March 31,
2023	214		20,462
2024	155		14,561
2025	47		10,125
2026	25		7,008
Thereafter	—		16,680
Total undiscounted lease payments	506		75,295
Present value discount	23		9,486
Lease liability	$	483	$	65,809

The following table presents supplemental disclosures of cash flow information related to leases for the third quarter and nine months ended January 2, 2022 and January 3, 2021:


	Quarter ended				Nine months ended
	January 2, 2022		January 3, 2021		January 2, 2022		January 3, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	6	$	8	$	21	$	22
Operating cash flows from operating leases	6,775		6,710		20,024		20,370
Financing cash flows from finance leases	59		52		179		138
Supplemental non-cash information on lease liabilities arising from right-of-use assets:
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—	$	98	$	—	$	185
Right-of-use assets obtained in exchange for new operating lease liabilities	13,987		2,181		19,577		9,313

Leases

The Company leases manufacturing facilities, distribution centers, office space, vehicles and other equipment under non-cancellable leases with initial terms typically ranging from 1 to 17 years.

Short term leases with an initial term of 12 months or less are not presented on the balance sheet and expense is recognized on a straight-line basis over the lease term.

The following table presents lease assets and liabilities and their balance sheet classification:


	Classification	As of January 2, 2022		As of March 31, 2021
Operating Leases:
Right-of-use assets	Other assets	$	63,699	$	62,159
Operating lease current liabilities	Accrued expenses	20,108		21,774
Operating lease non-current liabilities	Other liabilities	45,701		42,528
Finance Leases:
Right-of-use assets	Property, plant, and equipment, net	$	402	$	573
Finance lease current liabilities	Accrued expenses	203		236
Finance lease non-current liabilities	Other liabilities	280		435

The components of lease expense for the third quarter and nine months ended January 2, 2022 and January 3, 2021 were as follows:


		Quarter ended				Nine months ended
	Classification	January 2, 2022		January 3, 2021		January 2, 2022		January 3, 2021
Operating Leases:
Operating lease cost	Operating expenses	$	6,649	$	6,635	$	19,787	$	20,316
Variable lease cost	Operating expenses	2,288		1,797		7,215		5,529
Short term lease cost	Operating expenses	1,497		1,610		5,067		5,016
Finance Leases:
Depreciation	Operating expenses	$	58	$	53	$	177	$	141
Interest expense	Interest expense	6		8		21		22
Total		$	10,498	$	10,103	$	32,267	$	31,024

The following table presents the weighted average lease term and discount rates for leases as of January 2, 2022 and March 31, 2021:

January 2, 2022

March 31, 2021

Operating Leases:

Weighted average remaining lease term (years)

5.7 years

5.5 years

Weighted average discount rate

4.61%

5.16%

Finance Leases:

Weighted average remaining lease term (years)

2.5 years

3.1 years

Weighted average discount rate

4.80%

4.81%

The following table presents future payments due under leases reconciled to lease liabilities as of January 2, 2022:


	Finance Leases		Operating Leases
Three months ended March 31, 2022	$	65	$	6,459
Year ended March 31,
2023	214		20,462
2024	155		14,561
2025	47		10,125
2026	25		7,008
Thereafter	—		16,680
Total undiscounted lease payments	506		75,295
Present value discount	23		9,486
Lease liability	$	483	$	65,809

The following table presents supplemental disclosures of cash flow information related to leases for the third quarter and nine months ended January 2, 2022 and January 3, 2021:


	Quarter ended				Nine months ended
	January 2, 2022		January 3, 2021		January 2, 2022		January 3, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	6	$	8	$	21	$	22
Operating cash flows from operating leases	6,775		6,710		20,024		20,370
Financing cash flows from finance leases	59		52		179		138
Supplemental non-cash information on lease liabilities arising from right-of-use assets:
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—	$	98	$	—	$	185
Right-of-use assets obtained in exchange for new operating lease liabilities	13,987		2,181		19,577		9,313