Leases

12 Months Ended

Jan. 03, 2022

(2)

Leases

The Company leases some of its manufacturing and assembly plants, sales offices and equipment under non-cancellable operating leases and finance leases that expire at various dates through 2049. The majority of the Company’s lease arrangements are comprised of fixed payments, and certain leases consist of variable payments based on equipment usage. These variable payments are not included in the measurement of the ROU asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain leases contain renewal provisions at the Company’s option. Most of the leases require the Company to pay for certain other costs such as property taxes and maintenance. Certain leases also contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents is recognized on a straight-line basis over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense were as follows:

	For the Year Ended
	January 3, 2022		December 28, 2020
	(In thousands)
Operating lease cost	$	7,907	$	9,304
Variable lease cost		798		529
Short-term lease cost		338		525
Finance lease costs:
Amortization of right-of-use assets		538		—
Interest on lease liabilities		159		—

Supplemental cash flow information related to leases was as follows:

	For the Year Ended
	January 3, 2022		December 28, 2020
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	8,308	$	8,865
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases		8,651		10,036
Finance leases		15,297		—

Supplemental balance sheet information related to leases was as follows:

		As of
	Balance Sheet Location	January 3, 2022		December 28, 2020
		(In thousands)
Assets:
Operating leases	Operating lease right-of-use assets	$	20,802	$	24,340
Finance leases	Property, plant and equipment, net		14,759		—
Total lease assets		$	35,561	$	24,340
Liabilities:
Current:
Operating leases	Other current liabilities	$	6,362	$	8,144
Finance leases	Other current liabilities		698		—
Long-term:
Operating leases	Operating lease liabilities		15,252		17,211
Finance leases	Other long-term liabilities		14,317		—
Total lease liabilities		$	36,629	$	25,355

	As of
	January 3, 2022			December 28, 2020
Weighted average remaining lease term (years):
Operating leases	3.9			4.2
Finance leases	14.6				—
Weighted average discount rate:
Operating leases		2.56	%		3.31	%
Finance leases		2.68	%		—

Maturities of lease liabilities were as follows:

	Operating Leases⁽¹⁾			Finance Leases
	(In thousands)
Less than one year	$	6,833		$	1,089
1 - 2 years		6,085			1,110
2 - 3 years		4,910			1,135
3 - 4 years		2,618			1,146
4 - 5 years		1,458			1,175
Thereafter		901			12,656
Total lease payments		22,805			18,311
Less imputed interest		(1,191	)		(3,296	)
Total	$	21,614		$	15,015

(1)

Excludes $851 of legally binding minimum lease payments for leases signed but not yet commenced.