XML 29 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Leases
6 Months Ended
Jul. 04, 2020
Leases [Abstract]  
Leases

NOTE 10.  LEASES

We lease certain of our manufacturing facilities under operating leases. We also lease production equipment, vehicles, computer equipment, storage units and office equipment under operating leases. Our leases have remaining lease terms of 1 year to 9 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. All of our leases are operating leases. We did not recognize right-of-use assets or lease liabilities for certain short-term leases that are month-to-month leases. The lease expense relating to these leases is not significant.

The components of lease expense for the three and six months ended July 4, 2020, and June 29, 2019, are as follows (in thousands):

 

 

Three Months Ended

 

 

Six Months Ended

 

 

July 4,

 

 

June 29,

 

 

July 4,

 

 

June 29,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

$

2,212

 

 

$

1,408

 

 

$

4,221

 

 

$

2,960

 

Variable lease cost

 

905

 

 

 

758

 

 

 

1,786

 

 

 

1,332

 

Total lease cost

$

3,117

 

 

$

2,166

 

 

$

6,007

 

 

$

4,292

 

 

Other information relating to leases for the three and six months ended July 4, 2020, and June 29, 2019, are as follows (in thousands, except years and percentages):

 

 

Three Months Ended

 

 

Six Months Ended

 

 

July 4,

 

 

June 29,

 

 

July 4,

 

 

June 29,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Supplemental cash flows information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the

  measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cash flows relating to

  operating leases

$

(2,212

)

 

$

(1,384

)

 

$

(4,221

)

 

$

(2,960

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange

  for lease obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating leases

$

233

 

 

$

 

 

$

14,838

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average remaining lease term in years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating leases

 

7.10

 

 

 

4.38

 

 

 

7.10

 

 

 

4.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average discount rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating leases

 

5.9

%

 

 

6.2

%

 

 

5.9

%

 

 

6.2

%

 

 


Future maturities under operating leases were as follows at July 4, 2020, and December 28, 2019 (in thousands):

 

 

 

July 4,

 

 

December 28,

 

 

 

2020

 

 

2019

 

Remainder of 2020

 

$

4,449

 

 

$

6,319

 

2021

 

 

7,356

 

 

 

4,771

 

2022

 

 

6,497

 

 

 

3,878

 

2023

 

 

6,260

 

 

 

3,741

 

2024

 

 

6,211

 

 

 

3,771

 

Thereafter

 

 

18,933

 

 

 

13,691

 

 

 

 

 

 

 

 

 

 

Total future minimum lease payments

 

 

49,706

 

 

 

36,171

 

 

 

 

 

 

 

 

 

 

Less:  Imputed interest

 

 

(9,190

)

 

 

(7,428

)

 

 

 

 

 

 

 

 

 

Operating lease liability - total

 

$

40,516

 

 

$

28,743

 

 

 

 

 

 

 

 

 

 

Reported as of July 4, 2020 and December 28, 2019:

 

 

 

 

 

 

 

 

Current portion of operating lease liability

 

$

6,114

 

 

$

4,703

 

Operating lease liability, less current portion

 

 

34,402

 

 

 

24,040

 

 

 

 

 

 

 

 

 

 

Operating lease liability - total

 

$

40,516

 

 

$

28,743

 

As of July 4, 2020, we had no additional operating or finance leases that have not yet commenced. Our operating leases expire at various times through 2028. Lease expense prior to the adoption of ASU 2016-02 would have been $3.1 million for the three months ended July 4, 2020 and was $2.2 million for the three months ended June 29, 2019. Of the $3.1 million for the three months ended July 4, 2020, $1.6 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses. Of the $2.2 million for the three months ended June 29, 2019, $1.0 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses. Lease expense prior to the adoption of ASU 2016-02 would have been $6.0 million for the six months ended July 4, 2020 and was $4.3 million for the six months ended June 29, 2019. Of the $6.0 million for the six months ended July 4, 2020, $3.1 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses. Of the $4.3 million for the six months ended June 29, 2019, $2.0 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses. Lease expense was $8.9 million for the year ended December 28, 2019.

The $14.8 million in operating lease right-of-use assets obtained in exchange for operating lease obligations during the six months ended July 4, 2020 includes $10.6 million related to the NewSouth Acquisition. See Note 6 for additional information.