Leases

9 Months Ended

Sep. 29, 2022

Leases [Abstract]

Leases

Leases

The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to accounting guidance ASU No. 2016-02, Leases (Topic 842). The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.

The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Total lease cost consists of the following:

		13 Weeks Ended				39 Weeks Ended
Lease Cost	Classification	September 29, 2022		September 30, 2021		September 29, 2022		September 30, 2021
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization	$	692	$	677	$	2,093	$	2,057
Interest on lease liabilities	Interest expense	210		234		647		724
		$	902	$	911	$	2,740	$	2,781
Operating lease costs:
Operating lease costs	Rent expense	$	6,364	$	6,365	$	19,105	$	19,151
Variable lease cost	Rent expense	273		144		288		(29)
Short-term lease cost	Rent expense	35		35		107		107
		$	6,672	$	6,544	$	19,500	$	19,229

Additional information related to leases is as follows:

	13 Weeks Ended				39 Weeks Ended
Other Information	September 29, 2022		September 30, 2021		September 29, 2022		September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	711	$	736	$	2,047	$	2,065
Operating cash flows from finance leases	210		234		647		724
Operating cash flows from operating leases	6,917		8,253		21,053		$	23,545
Right of use assets obtained in exchange for new lease obligations:
Finance lease liabilities	119		—		307		—
Operating lease liabilities	92		287		275		1,862

	September 29, 2022		December 30, 2021
Finance leases:
Property and equipment – gross	$	75,282	$	75,124
Accumulated depreciation and amortization	(60,147)		(58,197)
Property and equipment - net	$	15,135	$	16,927

Remaining lease terms and discount rates are as follows:

Lease Term and Discount Rate	September 29, 2022		December 30, 2021
Weighted-average remaining lease terms:
Finance leases	8 years		8 years
Operating leases	13 years		13 years
Weighted-average discount rates:
Finance leases	4.59	%	4.58	%
Operating leases	4.51	%	4.48	%

Deferred rent payments of approximately $1,076 for the Company’s operating leases have been included in the total operating lease obligations as of September 29, 2022, of which approximately $661 is included in long-term operating lease obligations.