Leases

9 Months Ended

Oct. 03, 2021

Leases [Abstract]

Leases

LEASES

General

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. The Company’s leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

The Company records a right-of-use asset and lease liability for leases extending beyond one year for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.

As of October 3, 2021, there were no significant leases that had not commenced.

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of October 3, 2021 and January 3, 2021:

	October 3, 2021				January 3, 2021
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	93,999			$	98,013
Current portion of operating lease liabilities	$	15,040			$	13,555
Operating lease liabilities	80,741				86,468
Total operating lease liabilities	$	95,781			$	100,023
Property, plant and equipment, net			$	6,961			$	6,138
Accrued expenses			$	1,814			$	1,496
Other long-term liabilities			3,490				2,688
Total finance lease liabilities			$	5,304			$	4,184

Lease Costs

	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	646	$	176	$	1,230	$	811
Interest on lease liabilities	37		22		104		56
Operating lease cost	5,240		6,095		17,040		19,076
Short-term lease cost	222		85		864		426
Variable lease cost	730		1,089		2,018		2,659
Total lease cost	$	6,875	$	7,467	$	21,256	$	23,028

Other Supplemental Information

	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	16	$	22	$	83	$	56
Operating cash flows from operating leases	6,677		5,528		17,353		16,978
Financing cash flows from finance leases	680		442		1,796		1,252
Right-of-use assets obtained in exchange for new finance lease liabilities	67		1,156		2,811		1,709
Right-of-use assets obtained in exchange for new operating lease liabilities	6,417		1,517		12,062		5,582

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of October 3, 2021 and January 3, 2021:

	October 3, 2021		January 3, 2021
Weighted-average remaining lease term – finance leases (in years)	3.28		3.35
Weighted-average remaining lease term – operating leases (in years)	10.03		10.61
Weighted-average discount rate – finance leases	2.84	%	2.64	%
Weighted-average discount rate – operating leases	5.87	%	5.98	%

Maturity Analysis

A maturity analysis of lease payments under non-cancellable leases is presented as follows:

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2021 (excluding the nine months ended October 3, 2021)	$	4,842	$	696
2022	17,833		1,821
2023	13,698		1,441
2024	12,225		1,055
2025	10,578		412
Thereafter	71,205		135
Total future minimum lease payments (undiscounted)	130,381		5,560
Less: Present value discount	(34,600)		(256)
Total lease liability	$	95,781	$	5,304

Leases

LEASES

General

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. The Company’s leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

The Company records a right-of-use asset and lease liability for leases extending beyond one year for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.

As of October 3, 2021, there were no significant leases that had not commenced.

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of October 3, 2021 and January 3, 2021:

	October 3, 2021				January 3, 2021
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	93,999			$	98,013
Current portion of operating lease liabilities	$	15,040			$	13,555
Operating lease liabilities	80,741				86,468
Total operating lease liabilities	$	95,781			$	100,023
Property, plant and equipment, net			$	6,961			$	6,138
Accrued expenses			$	1,814			$	1,496
Other long-term liabilities			3,490				2,688
Total finance lease liabilities			$	5,304			$	4,184

Lease Costs

	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	646	$	176	$	1,230	$	811
Interest on lease liabilities	37		22		104		56
Operating lease cost	5,240		6,095		17,040		19,076
Short-term lease cost	222		85		864		426
Variable lease cost	730		1,089		2,018		2,659
Total lease cost	$	6,875	$	7,467	$	21,256	$	23,028

Other Supplemental Information

	Three Months Ended				Nine Months Ended
	October 3, 2021		October 4, 2020		October 3, 2021		October 4, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	16	$	22	$	83	$	56
Operating cash flows from operating leases	6,677		5,528		17,353		16,978
Financing cash flows from finance leases	680		442		1,796		1,252
Right-of-use assets obtained in exchange for new finance lease liabilities	67		1,156		2,811		1,709
Right-of-use assets obtained in exchange for new operating lease liabilities	6,417		1,517		12,062		5,582

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of October 3, 2021 and January 3, 2021:

	October 3, 2021		January 3, 2021
Weighted-average remaining lease term – finance leases (in years)	3.28		3.35
Weighted-average remaining lease term – operating leases (in years)	10.03		10.61
Weighted-average discount rate – finance leases	2.84	%	2.64	%
Weighted-average discount rate – operating leases	5.87	%	5.98	%

Maturity Analysis

A maturity analysis of lease payments under non-cancellable leases is presented as follows:

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2021 (excluding the nine months ended October 3, 2021)	$	4,842	$	696
2022	17,833		1,821
2023	13,698		1,441
2024	12,225		1,055
2025	10,578		412
Thereafter	71,205		135
Total future minimum lease payments (undiscounted)	130,381		5,560
Less: Present value discount	(34,600)		(256)
Total lease liability	$	95,781	$	5,304