Leases

9 Months Ended

Sep. 29, 2024

The Company has operating and finance leases for corporate and field offices, construction equipment and transportation vehicles. The Company is currently not a lessor in any significant lease arrangements. The Company’s leases have remaining lease terms of up to 14 years. Some of these leases include options to extend the leases, generally for optional terms of up to five years, and some include options to terminate the leases within one year. The equipment leases may include variable payment terms in addition to the fixed lease payments if machinery is used in excess of the standard work periods. The occurrence of these variable payments is not probable under the Company’s current operating environment and has not been included in consideration of lease payments. Leases with an initial term of 12 months or less are classified as short-term leases and are not recognized on the condensed consolidated balance sheets unless the lease contains a purchase option that is reasonably certain to be exercised, or unless it is reasonably certain that the equipment will be leased for greater than 12 months. Due to the seasonality of the Company’s operations, expense for short-term leases will fluctuate throughout the year with higher expense typically incurred during the periods when revenue is the greatest. As of September 29, 2024, the Company did not have any significant executed lease agreements that had not yet commenced.

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


		Fiscal Three Months Ended				Fiscal Nine Months Ended
Lease cost	Classification	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
Operating lease cost	Cost of revenue and selling, general and administrative expenses	$	6,700	$	5,998	$	19,949	$	16,055
Finance lease cost:
Amortization of ROU assets	Depreciation (1)	1,765		2,164		6,049		5,837
Interest on lease liabilities	Interest expense, net	316		412		1,021		1,290
Total finance lease cost		2,081		2,576		7,070		7,127
Short-term lease cost (2)	Cost of revenue and selling, general and administrative expenses	27,510		30,903		73,800		90,491
Total lease cost		$	36,291	$	39,477	$	100,819	$	113,673

(1)Depreciation is included within cost of revenue in the accompanying condensed consolidated statements of operations.

(2)Short-term lease cost includes both leases and rentals with initial terms of 12 months or less.

Supplemental cash flow information related to leases was as follows (in thousands):


	Fiscal Nine Months Ended
	September 29, 2024		October 1, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19,784	$	15,585
Operating cash flows from finance leases	1,021		1,290
Financing cash flows from finance leases	8,574		9,095
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	8,710	$	37,747
Finance leases	124		1,471

Supplemental information related to leases was as follows:


	September 29, 2024		December 31, 2023
Weighted average remaining lease term (in years):
Operating leases	6.84		7.45
Finance leases	3.15		3.64

Weighted average discount rate:
Operating leases	5.06	%	4.88	%
Finance leases	4.19	%	4.02	%

The following is a schedule of maturities of lease liabilities as of September 29, 2024 (in thousands):


	Operating Leases		Finance Leases
Fiscal year ended:
Remainder of 2024	$	6,710	$	3,044
2025	23,682		10,264
2026	21,172		7,676
2027	19,475		5,786
2028	17,042		1,779
Thereafter	49,071		746
Total lease payments	137,152		29,295
Less: Amount of lease payments representing interest	(21,104)		(2,110)
Total	$	116,048	$	27,185

Certain leases require the Company to pay variable property taxes, insurance and maintenance costs that have been excluded from the minimum lease payments in the above tables as they are variable in nature.

Leases