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Note 11 - Leases

12 Months Ended

Dec. 26, 2020

11. Leases

We lease certain of our facilities, equipment and vehicles under non-cancelable operating and finance leases. Leases with initial terms with 12 months or less are not recorded in the consolidated balance sheet, but we recognized those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Lease and non-lease components are included in the calculation of the right of use asset (“ROU”) asset and lease liabilities.

Our leases have remaining lease terms ranging from 1 year to 37 years, some of which include one or more options to extend the lease for up to 25 years. Our lease term includes renewal terms when we are reasonably certain that we will exercise the renewal options. We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities.

Supplemental balance sheet information related to leases was as follows:

		December 26,			December 28,
(in thousands)	Classification	2020			2019
Assets:
Operating lease assets	Operating lease right-of-use assets	$	29,203		$	33,269
Finance lease assets	Property, plant and equipment, net ⁽¹⁾		486			2,515
Total lease assets		$	29,689		$	35,784
Liabilities:
Current:
Operating	Other accrued liabilities	$	5,287		$	5,458
Finance	Other accrued liabilities		179			2,574
Noncurrent:
Operating	Long-term lease liabilities		25,565			28,877
Finance	Long-term lease liabilities		222			-
Total lease liabilities		$	31,253		$	36,909

Weighted-average remaining lease term (years):
Operating leases			7.3			7.9
Finance leases			2.3			0.5

Weighted-average discount rate:
Operating leases			6.3	%		6.3	%
Finance leases			0.0	%		4.5	%

(1) Finance lease assets are recorded net of accumulated amortization of $48,000 and $0.1 million in 2020 and 2019, respectively.

The components of lease expense were as follows:

	December 26,			December 28,
(in thousands)	2020			2019
Operating leases⁽¹⁾	$	8,374		$	8,525
Variable lease expense		2,110			2,318
Short-term operating leases		93			256
Finance leases:
Amortization of leased assets		84			102
Interest on lease liabilities		57			146
Sublease income		(113	)		(133	)
Net lease cost	$	10,605		$	11,214

(1) Operating lease cost excludes impairment expense of $0.2 million related to the write-down of the Fontana facility right-of-use asset recognized in 2019.

Future minimum lease payments at December 26, 2020, are as follows:

	Operating			Finance
(in thousands)	leases⁽¹⁾			leases		Total
2021	$	7,015		$	179	$	7,194
2022		6,187			179		6,366
2023		5,297			43		5,340
2024		4,766			-		4,766
2025		4,428			-		4,428
Thereafter		11,942			-		11,942
Total lease payments		39,635			401		40,036
Less: Interest		(8,783	)		-		(8,783	)
Present value of lease liabilities	$	30,852		$	401	$	31,253

(1) Excludes sublease income of $0.1 million in 2021.

Supplemental cash flow information related to leases was as follows:

	December 26,		December 28,
(in thousands)	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,079	$	6,932
Operating cash flows from finance leases	$	57	$	117
Financing cash flows from finance leases	$	146	$	34
Leased assets obtained in exchange for new finance lease liabilities	$	489	$	-
Leased assets obtained in exchange for new operating lease liabilities	$	2,403	$	40,844