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Note 10 - Leases

3 Months Ended

Apr. 01, 2023

10.

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	April 1, 2023			December 31, 2022
Assets
Operating lease assets	Operating lease right-of-use assets	$	21,718		$	22,804
Finance lease assets	Property, plant and equipment, net ⁽¹⁾		322			323
Total lease assets		$	22,040		$	23,127
Liabilities
Current
Operating	Other accrued liabilities	$	5,111		$	4,927
Finance	Other accrued liabilities		36			49
Noncurrent
Operating	Long-term lease liabilities		17,987			19,185
Finance	Long-term lease liabilities		30			24
Total lease liabilities		$	23,164		$	24,185

Weighted-average remaining lease term (years)
Operating leases			6.1			6.2
Finance leases			2.1			1.7

Weighted-average discount rate
Operating leases			6.2	%		6.2	%
Finance leases			2.0	%		2.2	%

(1)

Finance lease assets are recorded net of accumulated amortization of $0.2 million as of April 1, 2023 and December 31, 2022.

The components of lease expense were as follows:

	Three Months Ended
(in thousands)	April 1, 2023			March 26, 2022
Operating leases	$	1,679		$	1,716
Variable lease expense		559			537
Short-term operating leases		6			1
Finance leases
Amortization of leased assets		26			32
Sublease income		(10	)		(20	)
Net lease cost	$	2,260		$	2,266

Future minimum lease payments at April 1, 2023, are as follows:

	Operating			Finance
(in thousands)	leases			leases			Total
2023	$	4,744		$	32		$	4,776
2024		5,909			17			5,926
2025		5,260			16			5,276
2026		2,862			3			2,865
2027		1,783			-			1,783
Thereafter		7,910			-			7,910
Total lease payments		28,468			68			28,536
Less: Interest		(5,370	)		(2	)		(5,372	)
Present value of lease liabilities	$	23,098		$	66		$	23,164

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(in thousands)	April 1, 2023		March 26, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,675	$	1,703
Financing cash flows from finance leases	$	24	$	44
Leased assets obtained in exchange for new operating lease liabilities	$	95	$	1,169
Financing lease assets acquired in MCT acquisition	$	19	$	-
Operating lease assets acquired in MCT acquisition	$	130	$	-