Leases

3 Months Ended

Mar. 29, 2025

9. LEASES

For leases with initial terms greater than 12 months, the Company considers these right-of-use assets and records the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, the Company does not consider them as right-of-use assets and instead considers them short-term lease costs that are recognized on a straight-line basis over the lease term. The Company’s leases may include escalation clauses, renewal options, and/or termination options that are factored into the Company’s determination of lease term and lease payments when it is reasonably certain the option will be exercised. The Company elected to take the practical expedient and not separate lease and non-lease components of contracts. The Company estimates an incremental borrowing rate to discount the lease payments based on information available at lease commencement because the implicit rate of the lease is generally not known.

The Company leases manufacturing facilities, office space, land, and certain vehicles and equipment under operating leases. The Company also leases certain vehicles and equipment under finance leases. The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The components of lease expense for the fiscal quarters ended March 29, 2025 and March 30, 2024 were as follows (in thousands):


	Fiscal Quarter Ended
	March 29, 2025		March 30, 2024
Operating lease expense	$	2,162	$	2,163
Finance lease amortization of assets		210		212
Finance lease interest on lease liabilities		68		84
Short-term lease expense		97		56
Variable lease expense		199		158
Total lease expense	$	2,736	$	2,673

Operating and finance lease right-of-use assets and lease-related liabilities as of March 29, 2025 and December 31, 2024 were as follows (in thousands):


	March 29, 2025		December 31, 2024		Classification

Lease right-of-use assets:
Operating leases	$	27,154	$	28,259	Operating lease right-of-use assets
Finance leases		3,064		3,261	Other assets
Total lease right-of-use assets	$	30,218	$	31,520

Lease-related liabilities
Current
Operating leases	$	7,100	$	7,176	Current operating lease liabilities
Finance leases		768		779	Accrued expenses and other current liabilities
Non-current
Operating leases		20,951		22,138	Non-current operating lease liabilities
Finance leases		2,501		2,678	Other long-term liabilities
Total lease liabilities	$	31,320	$	32,771

The table below presents supplemental information related to leases as of March 29, 2025 and December 31, 2024:


	March 29, 2025			December 31, 2024
Weighted-average remaining lease term (years)
Finance leases		4.2			4.4
Operating leases		5.2			5.3
Weighted-average discount rate
Finance leases		8.2	%		8.2	%
Operating leases		5.5	%		5.4	%

The table below presents supplemental information related to the cash flows for operating leases recorded on the condensed consolidated statements of cash flows (in thousands):


	Fiscal Quarter Ended
	March 29, 2025		March 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,829	$	1,794

The following table summarizes fiscal year maturities of operating lease liabilities as of March 29, 2025 (in thousands):


	Operating Leases		Finance Leases		Total
Remainder of fiscal year 2025	$	6,482	$	765	$	7,247
2026		7,129		939		8,068
2027		5,323		863		6,186
2028		3,967		851		4,818
2029		3,396		367		3,763
Thereafter		6,032		74		6,106
Total lease payments		32,329		3,859		36,188
Less: Interest		(4,278)		(590)		(4,868)
Present value of lease liability	$	28,051	$	3,269	$	31,320