LEASES

3 Months Ended

Mar. 28, 2026

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 28, 2026 and March 29, 2025 were as follows (in thousands):


	Fiscal Quarter Ended
	March 28, 2026		March 29, 2025
Operating lease expense	$	2,287	$	2,162
Finance lease amortization of assets	216		210
Finance lease interest on lease liabilities	58		68
Short-term lease expense	72		97
Variable lease expense	234		199
Total lease expense	$	2,867	$	2,736

Operating and finance lease right-of-use assets and lease-related liabilities as of March 28, 2026 and December 31, 2025 were as follows (in thousands):


	March 28, 2026		December 31, 2025		Classification

Lease right-of-use assets:
Operating leases	$	29,621	$	30,723	Operating lease right-of-use assets
Finance leases	2,619		2,714		Other assets
Total lease right-of-use assets	$	32,240	$	33,437

Lease-related liabilities:
Current
Operating leases	$	6,792	$	7,630	Current operating lease liabilities
Finance leases	834		815		Accrued expenses and other current liabilities
Non-current
Operating leases	23,633		23,964		Non-current operating lease liabilities
Finance leases	2,011		2,125		Other long-term liabilities
Total lease liabilities	$	33,270	$	34,534

The table below presents supplemental information related to leases as of March 28, 2026 and December 31, 2025:


	March 28, 2026		December 31, 2025
Weighted-average remaining lease term (years):
Finance leases	3.4		3.6
Operating leases	5.8		4.9
Weighted-average discount rate:
Finance leases	8.0	%	8.1	%
Operating leases	6.3	%	5.9	%

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 28, 2026		March 29, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,807	$	1,829

The following table summarizes fiscal year maturities of operating lease liabilities as of March 28, 2026 (in thousands):


	Operating Leases		Finance Leases		Total
Remainder of fiscal year 2026	$	6,584	$	785	$	7,369
2027	7,003		948		7,951
2028	5,671		936		6,607
2029	5,035		451		5,486
2030	4,266		120		4,386
Thereafter	7,932		7		7,939
Total lease payments	36,491		3,247		39,738
Less: Interest	(6,066)		(402)		(6,468)
Present value of lease liability	$	30,425	$	2,845	$	33,270