Leases Leases

9 Months Ended

Nov. 26, 2022

Leases [Abstract]

Leases

7. Leases

We lease certain of the buildings and equipment used in our operations. We determine if an arrangement contains a lease at inception. Currently, all of our lease arrangements are classified as operating leases. We elected the package of practical expedients permitted under the transition guidance in adopting ASC 842, which among other things, allowed us to carry forward our historical lease classification. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term. Our leases have remaining lease terms of one to ten years, some of which include renewal options that can extend the lease for up to an additional ten years at our sole discretion. We have made an accounting policy election not to record leases with an original term of 12 months or less on our consolidated balance sheet; such leases are expensed on a straight-line basis over the lease term.

In determining lease asset value, we consider fixed or variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. We use a discount rate for each lease based upon an estimated incremental borrowing rate over a similar term. We have elected the practical expedient to account for lease and non lease components (e.g., common-area maintenance costs) as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We are not a lessor in any transactions.

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
(In thousands)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Operating lease cost	$	3,293	$	3,422	$	9,298	$	10,321
Short-term lease cost	144		357		804		821
Variable lease cost	904		725		2,667		2,182
Total lease cost	$	4,341	$	4,504	$	12,769	$	13,324

Other supplemental information related to leases was as follows:

	Nine Months Ended
(In thousands except weighted-average data)	November 26, 2022			November 27, 2021
Cash paid for amounts included in the measurement of operating lease liabilities	$	10,580		$	10,744
Lease assets obtained in exchange for new operating lease liabilities	$	11,125		$	3,107
Weighted-average remaining lease term - operating leases	4.7 years			5.4 years
Weighted-average discount rate - operating leases	3.14		%	2.88		%

Future maturities of lease liabilities are as follows:

(In thousands)	November 26, 2022
Remainder of Fiscal 2023	$	3,243
Fiscal 2024	12,587
Fiscal 2025	11,326
Fiscal 2026	9,371
Fiscal 2027	7,960
Fiscal 2028	4,270
Thereafter	2,324
Total lease payments	51,081
Less: Amounts representing interest	3,226
Present value of lease liabilities	$	47,855