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Note 11 - Leases

3 Months Ended

Mar. 26, 2022

11.

Leases

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

Our leases have remaining lease terms of 1 year to 36 years, some of which include one or more options to extend the leases for up to 25 years. Our lease term includes renewal terms when we are reasonably certain we will exercise the renewal options. We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities.

Cohu, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 26, 2022

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Classification	March 26, 2022			December 25, 2021
Assets
Operating lease assets	Operating lease right-of-use assets	$	24,870		$	25,060
Finance lease assets	Property, plant and equipment, net ⁽¹⁾		390			423
Total lease assets		$	25,260		$	25,483
Liabilities
Current
Operating	Other accrued liabilities	$	4,962		$	4,886
Finance	Other accrued liabilities		143			167
Noncurrent
Operating	Long-term lease liabilities		21,732			21,977
Finance	Long-term lease liabilities		50			63
Total lease liabilities		$	26,887		$	27,093

Weighted-average remaining lease term (years)
Operating leases			6.7			6.9
Finance leases			1.6			1.8

Weighted-average discount rate
Operating leases			6.2	%		6.3	%
Finance leases			0.9	%		0.7	%

(1)

Finance lease assets are recorded net of accumulated amortization of $0.2 million and $0.1 million as of March 26, 2022 and December 25, 2021, respectively.

The components of lease expense were as follows:

	Three Months Ended
(in thousands)	March 26, 2022			March 27, 2021
Operating leases	$	1,716		$	2,040
Variable lease expense		537			552
Short-term operating leases		1			33
Finance leases
Amortization of leased assets		32			21
Sublease income		(20	)		(19	)
Net lease cost	$	2,266		$	2,627

Future minimum lease payments at March 26, 2022, are as follows:

	Operating			Finance
(in thousands)	leases⁽¹⁾			leases			Total
2022	$	4,866		$	121		$	4,987
2023		5,761			50			5,811
2024		5,302			11			5,313
2025		5,088			11			5,099
2026		2,765			3			2,768
Thereafter		9,729			-			9,729
Total lease payments		33,511			196			33,707
Less: Interest		(6,817	)		(3	)		(6,820	)
Present value of lease liabilities	$	26,694		$	193		$	26,887

(1)

Excludes sublease income of $0.1 million in 2022.

Cohu, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 26, 2022

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(in thousands)	March 26, 2022		March 27, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,703	$	1,943
Financing cash flows from finance leases	$	44	$	45
Leased assets obtained in exchange for new finance lease liabilities	$	-	$	54
Leased assets obtained in exchange for new operating lease liabilities	$	1,169	$	2,350