v3.25.2
Leases
 6 Months Ended
Jun. 29, 2025
Leases [Abstract]  
Leases Leases
The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company’s lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842, “Leases.” Most of the Company’s real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.
As the implicit rate in the Company’s leases is normally not readily determinable, the Company generally calculates its lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years.
The Company completed the divestiture of Protexic on April 1, 2024. The divestiture included operating lease assets of $21,989 and operating lease liabilities of $22,396.
The Company completed the Eviosys acquisition on December 4, 2024. The acquisition included operating lease liabilities of $42,468 with a weighted-average remaining lease maturity term of 8.1 years and a weighted-average discount rate of 4.5%.
For additional information about the Company’s acquisitions and divestitures, see Note 4.
The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at June 29, 2025 and December 31, 2024:
ClassificationBalance Sheet LocationJune 29, 2025December 31, 2024
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$318,036 $307,688 
Finance lease assetsOther Assets73,487 76,831 
Total lease assets$391,523 $384,519 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$56,851 $52,648 
Current finance lease liabilitiesNotes payable and current portion of long-term debt24,846 22,284 
Total current lease liabilities$81,697 $74,932 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$268,181 $258,735 
Noncurrent finance lease liabilitiesLong-term Debt, net of current portion44,079 45,344 
Total noncurrent lease liabilities$312,260 $304,079 
Total lease liabilities$393,957 $379,011 
Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use assets recorded on the balance sheet were determined based upon factors considered at the commencement date of the leases, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet for certain leases with rate or index-related terms result in variable expenses being incurred when paid during the lease term.
The following table sets forth the components of the Company’s total lease cost for the three- and six-month periods ended June 29, 2025 and June 30, 2024:
Three Months EndedSix Months Ended
Lease CostJune 29, 2025June 30, 2024June 29, 2025June 30, 2024
Operating lease cost(a)$16,340 $10,913 $31,824 $24,283 
Finance lease cost:
     Amortization of lease asset(a)3,285 3,126 6,287 6,211 
     Interest on lease liabilities(b)793 887 1,493 1,808 
Variable lease cost(a) (c)11,269 8,704 23,691 15,301 
Impairment charges(d)545 — 1,178 — 
Total lease cost$32,232 $23,630 $64,473 $47,603 
(a) Production-related costs are included in “Cost of sales” and administrative costs are included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Income.
(b) Included in “Interest expense” in the Condensed Consolidated Statements of Income.
(c) Also includes short term lease costs, which are deemed immaterial.
(d) Impairment charges are included in “Restructuring/asset impairment charges” in the Company’s Condensed Consolidated Statements of Income. See Note 6 for additional information.
The following table sets forth certain lease-related information for the six-month periods ended June 29, 2025 and June 30, 2024:
Six Months Ended
June 29, 2025June 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $29,599 $23,365 
     Operating cash flows used by finance leases1,493 1,808 
     Financing cash flows used by finance leases7,075 7,495 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities15,305 42,998 
     Leased assets obtained in exchange for new finance lease liabilities13,903 4,652 
     Modification to leased assets for increase in operating lease liabilities10,090 3,456 
     Modification to leased assets for (decrease)/increase in finance lease liabilities (10,440)51 
     Termination reclasses to decrease operating lease assets(7,651)(2,075)
     Termination reclasses to decrease operating lease liabilities(7,756)(2,304)
     Termination reclasses to decrease finance lease assets(82)(163)
     Termination reclasses to decrease finance lease liabilities (84)(164)
Leases Leases
The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company’s lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842, “Leases.” Most of the Company’s real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.
As the implicit rate in the Company’s leases is normally not readily determinable, the Company generally calculates its lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years.
The Company completed the divestiture of Protexic on April 1, 2024. The divestiture included operating lease assets of $21,989 and operating lease liabilities of $22,396.
The Company completed the Eviosys acquisition on December 4, 2024. The acquisition included operating lease liabilities of $42,468 with a weighted-average remaining lease maturity term of 8.1 years and a weighted-average discount rate of 4.5%.
For additional information about the Company’s acquisitions and divestitures, see Note 4.
The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at June 29, 2025 and December 31, 2024:
ClassificationBalance Sheet LocationJune 29, 2025December 31, 2024
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$318,036 $307,688 
Finance lease assetsOther Assets73,487 76,831 
Total lease assets$391,523 $384,519 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$56,851 $52,648 
Current finance lease liabilitiesNotes payable and current portion of long-term debt24,846 22,284 
Total current lease liabilities$81,697 $74,932 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$268,181 $258,735 
Noncurrent finance lease liabilitiesLong-term Debt, net of current portion44,079 45,344 
Total noncurrent lease liabilities$312,260 $304,079 
Total lease liabilities$393,957 $379,011 
Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use assets recorded on the balance sheet were determined based upon factors considered at the commencement date of the leases, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet for certain leases with rate or index-related terms result in variable expenses being incurred when paid during the lease term.
The following table sets forth the components of the Company’s total lease cost for the three- and six-month periods ended June 29, 2025 and June 30, 2024:
Three Months EndedSix Months Ended
Lease CostJune 29, 2025June 30, 2024June 29, 2025June 30, 2024
Operating lease cost(a)$16,340 $10,913 $31,824 $24,283 
Finance lease cost:
     Amortization of lease asset(a)3,285 3,126 6,287 6,211 
     Interest on lease liabilities(b)793 887 1,493 1,808 
Variable lease cost(a) (c)11,269 8,704 23,691 15,301 
Impairment charges(d)545 — 1,178 — 
Total lease cost$32,232 $23,630 $64,473 $47,603 
(a) Production-related costs are included in “Cost of sales” and administrative costs are included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Income.
(b) Included in “Interest expense” in the Condensed Consolidated Statements of Income.
(c) Also includes short term lease costs, which are deemed immaterial.
(d) Impairment charges are included in “Restructuring/asset impairment charges” in the Company’s Condensed Consolidated Statements of Income. See Note 6 for additional information.
The following table sets forth certain lease-related information for the six-month periods ended June 29, 2025 and June 30, 2024:
Six Months Ended
June 29, 2025June 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $29,599 $23,365 
     Operating cash flows used by finance leases1,493 1,808 
     Financing cash flows used by finance leases7,075 7,495 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities15,305 42,998 
     Leased assets obtained in exchange for new finance lease liabilities13,903 4,652 
     Modification to leased assets for increase in operating lease liabilities10,090 3,456 
     Modification to leased assets for (decrease)/increase in finance lease liabilities (10,440)51 
     Termination reclasses to decrease operating lease assets(7,651)(2,075)
     Termination reclasses to decrease operating lease liabilities(7,756)(2,304)
     Termination reclasses to decrease finance lease assets(82)(163)
     Termination reclasses to decrease finance lease liabilities (84)(164)