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Leases

12 Months Ended

Jan. 01, 2022

The Company enters into operating and finance lease commitments primarily for its manufacturing and office space, vehicles, and equipment leases that expire on various dates over the next 13 years, some of which include one or more options to extend the lease for up to 5 years. In addition, the Company leases land associated with certain of its buildings in Canada and China under long-term leases expiring on various dates ranging from 2032 to 2071, one of which includes an assumed option to extend the lease for up to 10 years.

The components of lease expense are as follows:


(In thousands)	January 1, 2022		January 2, 2021		December 28, 2019
Operating Lease Cost	$	5,895	$	5,602	$	5,534

Short-Term Lease Cost	674		671		715

Finance Lease Cost:
ROU asset amortization	1,045		1,157		1,213
Interest on lease liabilities	46		74		94
Total Finance Lease Cost	1,091		1,231		1,307

Total Lease Costs	$	7,660	$	7,504	$	7,556

Supplemental cash flow information related to leases is as follows:


(In thousands)	January 1, 2022		January 2, 2021		December 28, 2019
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
Operating cash flows from operating leases	$	12,474	$	5,782	$	5,636
Operating cash flows from finance leases	$	46	$	74	$	93
Financing cash flows from finance leases	$	1,044	$	1,139	$	1,144

ROU Assets Obtained in Exchange for Lease Obligations (a):
Operating leases	$	7,247	$	2,560	$	28,484
Finance leases	$	1,147	$	622	$	3,847

(a)Included in 2019 were additions related to the transition adjustment for the adoption of ASC 842. The post-adoption additions of operating leases were $13,167,000, of which $10,994,000 related to ROU assets obtained as part of the acquisition of SMH in 2019. The post-adoption additions of finance leases were $2,496,000, of which $528,000 related to ROU assets obtained as part of the acquisition of SMH.

Supplemental balance sheet information related to leases is as follows:


(In thousands)	Balance Sheet Line Item	January 1, 2022		January 2, 2021
Operating Leases:
ROU assets (a)	Other current assets	$	2,341	$	—
ROU assets	Other assets	24,998		25,460
Total operating lease assets		$	27,339	$	25,460

Short-term liabilities	Other current liabilities	$	4,596	$	4,396
Long-term liabilities	Other long-term liabilities	19,959		22,198
Total operating lease liabilities		$	24,555	$	26,594


(In thousands)	Balance Sheet Line Item	January 1, 2022		January 2, 2021
Finance Leases:
ROU assets, at cost	Property, plant, and equipment, at cost	$	4,076	$	3,707
ROU assets accumulated amortization	Accumulated depreciation and amortization	(2,489)		(2,108)
ROU assets, net	Property, plant, and equipment, net	$	1,587	$	1,599

Short-term obligations	Short-term obligations and current maturities of long-term obligations	$	862	$	915
Long-term obligations	Long-term obligations	748		716
Total finance lease liabilities		$	1,610	$	1,631

(a) See Note 15, Subsequent Event, for further details.


	January 1, 2022		January 2, 2021
Weighted Average Remaining Lease Term (in years):
Operating leases	8.7		9.4
Finance leases	2.1		2.0

Weighted Average Discount Rate:
Operating leases	3.82	%	3.88	%
Finance leases	2.55	%	3.52	%

As of January 1, 2022, future lease payments for lease liabilities are as follows:


	Operating		Finance
(In thousands)	Leases		Leases
2022	$	5,379	$	889
2023	4,316		561
2024	3,292		178
2025	2,727		17
2026	2,179		3
2027 and Thereafter	11,343		—
Total Future Lease Payments	29,236		1,648
Less: Imputed Interest	(4,681)		(38)
Present Value of Lease Payments	$	24,555	$	1,610

As of January 1, 2022, the Company had no significant operating and finance leases that had not yet commenced.

Leases