Leases

3 Months Ended

Mar. 30, 2023

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
Lease Cost	Classification	March 30, 2023		March 31, 2022
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization	$	691	$	705
Interest on lease liabilities	Interest expense	198		221
		$	889	$	926
Operating lease costs:
Operating lease costs	Rent expense	$	6,044	$	6,377
Variable lease cost	Rent expense	416		(163)
Short-term lease cost	Rent expense	33		36
		$	6,493	$	6,250

Additional information related to leases is as follows:

	13 Weeks Ended
Other Information	March 30, 2023		March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	556	$	584
Operating cash flows from finance leases	198		221
Operating cash flows from operating leases	6,430		7,124
Right of use assets obtained in exchange for new lease obligations:
Finance lease liabilities	—		72
Operating lease liabilities	—		183

	March 30, 2023		December 29, 2022
Finance leases:
Property and equipment – gross	$	29,885	$	29,885
Accumulated depreciation and amortization	(16,022)		(15,332)
Property and equipment - net	$	13,863	$	14,553

Remaining lease terms and discount rates are as follows:

Lease Term and Discount Rate	March 30, 2023		December 29, 2022
Weighted-average remaining lease terms:
Finance leases	7 years		7 years
Operating leases	12 years		12 years
Weighted-average discount rates:
Finance leases	4.59	%	4.59	%
Operating leases	4.51	%	4.51	%

Deferred rent payments of approximately $790 for the Company’s operating leases have been included in the total operating lease obligations as of March 30, 2023, of which approximately $587 is included in long-term operating lease obligations.

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
Lease Cost	Classification	March 30, 2023		March 31, 2022
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization	$	691	$	705
Interest on lease liabilities	Interest expense	198		221
		$	889	$	926
Operating lease costs:
Operating lease costs	Rent expense	$	6,044	$	6,377
Variable lease cost	Rent expense	416		(163)
Short-term lease cost	Rent expense	33		36
		$	6,493	$	6,250

Additional information related to leases is as follows:

	13 Weeks Ended
Other Information	March 30, 2023		March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	556	$	584
Operating cash flows from finance leases	198		221
Operating cash flows from operating leases	6,430		7,124
Right of use assets obtained in exchange for new lease obligations:
Finance lease liabilities	—		72
Operating lease liabilities	—		183

	March 30, 2023		December 29, 2022
Finance leases:
Property and equipment – gross	$	29,885	$	29,885
Accumulated depreciation and amortization	(16,022)		(15,332)
Property and equipment - net	$	13,863	$	14,553

Remaining lease terms and discount rates are as follows:

Lease Term and Discount Rate	March 30, 2023		December 29, 2022
Weighted-average remaining lease terms:
Finance leases	7 years		7 years
Operating leases	12 years		12 years
Weighted-average discount rates:
Finance leases	4.59	%	4.59	%
Operating leases	4.51	%	4.51	%

Deferred rent payments of approximately $790 for the Company’s operating leases have been included in the total operating lease obligations as of March 30, 2023, of which approximately $587 is included in long-term operating lease obligations.