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Note 11 - Leases

9 Months Ended

Sep. 24, 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 35 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.

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Classification	September 24, 2022			December 25, 2021
Assets
Operating lease assets	Operating lease right-of-use assets	$	22,339		$	25,060
Finance lease assets	Property, plant and equipment, net ⁽¹⁾		316			423
Total lease assets		$	22,655		$	25,483
Liabilities
Current
Operating	Other accrued liabilities	$	4,615		$	4,886
Finance	Other accrued liabilities		81			167
Noncurrent
Operating	Long-term lease liabilities		19,155			21,977
Finance	Long-term lease liabilities		26			63
Total lease liabilities		$	23,877		$	27,093

Weighted-average remaining lease term (years)
Operating leases			6.5			6.9
Finance leases			1.5			1.8

Weighted-average discount rate
Operating leases			6.3	%		6.3	%
Finance leases			1.3	%		0.7	%

(1)

Finance lease assets are recorded net of accumulated amortization of $0.2 million and $0.1 million as of September 24, 2022 and December 25, 2021, respectively.

The components of lease expense were as follows:

	Three Months Ended						Six Months Ended
(in thousands)	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Operating leases	$	1,654		$	1,799		$	5,046		$	5,866
Variable lease expense		520			508			1,583			1,634
Short-term operating leases		1			1			3			68
Finance leases
Amortization of leased assets		11			21			69			66
Interest on lease liabilities		-			-			1			1
Sublease income		(16	)		(21	)		(54	)		(61	)
Net lease cost	$	2,170		$	2,308		$	6,648		$	7,574

Future minimum lease payments at September 24, 2022, are as follows:

	Operating			Finance
(in thousands)	leases⁽¹⁾			leases			Total
2022	$	1,615		$	39		$	1,654
2023		5,649			47			5,696
2024		5,204			10			5,214
2025		5,018			10			5,028
2026		2,705			3			2,708
Thereafter		9,492			-			9,492
Total lease payments		29,683			109			29,792
Less: Interest		(5,913	)		(2	)		(5,915	)
Present value of lease liabilities	$	23,770		$	107		$	23,877

(1)

Excludes sublease income of $0.1 million in 2023.

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
(in thousands)	September 24, 2022		September 25, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,946	$	5,953
Operating cash flows from finance leases	$	1	$	1
Financing cash flows from finance leases	$	126	$	142
Leased assets obtained in exchange for new finance lease liabilities	$	-	$	54
Leased assets obtained in exchange for new operating lease liabilities	$	1,308	$	3,669