Leases

6 Months Ended

Jun. 28, 2025

(12)

Leases

Operating Leases and Finance Lease. We determine whether an arrangement is a lease at inception. We have operating leases and a finance lease for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to ten years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of-use assets and lease liabilities.

Operating leases and a finance lease are included in the accompanying unaudited consolidated balance sheets in the following line items (in thousands):


	June 28,		December 28,
	2025		2024
Right-of-use assets:
Operating lease right-of-use assets	$	47,156	$	55,431
Finance lease right-of-use assets		244		773
Total lease right-of-use assets	$	47,400	$	56,204

Operating lease liabilities:
Current portion of operating lease liabilities	$	15,898	$	17,963
Long-term operating lease liabilities, net of current portion		31,213		37,697
Total operating lease liabilities	$	47,111	$	55,660

Finance lease liabilities:
Current portion of finance lease liabilities	$	183	$	726
Long-term finance lease liabilities, net of current portion		—		—
Total finance lease liabilities	$	183	$	726

During the second quarter of 2025, we entered into an operating lease agreement for new corporate headquarters in Parsippany, New Jersey. The lease has not yet commenced and therefore the operating lease right-of-use assets and the operating lease liabilities are not recorded on our unaudited consolidated balance sheet as of June 28, 2025. This operating lease is expected to commence during the fourth quarter of 2025 or the first quarter of 2026, with a lease term of 15.75 years and total undiscounted lease payments of $26.9 million.

The following table shows supplemental information related to leases (in thousands):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	June 28,		June 29,		June 28,		June 29,
	2025		2024		2025		2024
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	5,067	$	5,033	$	10,204	$	9,901
Cash paid for amounts included in the measurement of finance lease liabilities	$	274	$	274	$	549	$	549

The components of operating lease costs were as follows:
Cost of goods sold	$	3,279	$	2,799	$	6,519	$	6,061
Selling, general and administrative expenses		1,709		1,709		3,418		3,419
Total operating lease costs	$	4,988	$	4,508	$	9,937	$	9,480

The components of finance lease costs were as follows:
Depreciation of finance right-of-use assets	$	264	$	265	$	528	$	529
Interest on finance lease liabilities		1		8		5		18
Total finance lease costs	$	265	$	273	$	533	$	547

Total net lease costs	$	5,253	$	4,781	$	10,470	$	10,027

Total rent expense was $5.4 million, including the operating lease costs of $5.0 million stated above, for the second quarter of 2025 and $10.7 million, including the operating lease costs of $9.9 million stated above, for the first two quarters of 2025. Total rent expense was $4.8 million, including the operating lease costs of $4.5 million stated above, for the second quarter of 2024 and $10.2 million, including the operating lease costs of $9.5 million stated above, for the first two quarters of 2024.

Because neither our operating leases nor our finance lease provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. With the exception of our real estate leases, we account for our leases as a single lease component.

The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:


	June 28,		December 28,
	2025		2024
Weighted average remaining lease term (years)
Operating leases		4.1		4.3
Finance lease		0.2		0.7
Weighted average discount rate
Operating leases		3.77%		3.77%
Finance lease		2.30%		2.30%

As of June 28, 2025, the maturities of lease liabilities were as follows (in thousands):


	Operating Leases		Finance Lease		Total Maturities of Lease Liabilities
Fiscal year:
2025 remaining	$	9,694	$	183	$	9,877
2026		14,400		—		14,400
2027		9,726		—		9,726
2028		8,076		—		8,076
2029		3,513		—		3,513
Thereafter		5,399		—		5,399
Total undiscounted future minimum lease payments		50,808		183		50,991
Less: Imputed interest		(3,697)		—		(3,697)
Total present value of future lease liabilities	$	47,111	$	183	$	47,294