Leases

3 Months Ended

Apr. 02, 2022

The Company primarily leases property under operating leases and has six equipment operating leases for aircrafts used by the operations of QSI. The Company's property operating leases consist of various office facilities. The Company uses a portfolio approach to account for such leases due to the similarities in characteristics and apply an incremental borrowing rate based on estimates of rates the Company would pay for senior collateralized loans over a similar term. The Company's office leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for lease components (e.g. fixed payments including rent, real estate taxes and common area maintenance costs) as a single lease component. Some of the Company's leases include one or more options to renew the lease term at its sole discretion; however, these are not included in the calculation of its lease liability or right-of-use ("ROU") lease asset because they are not reasonably certain of exercise.

The Company also leases vehicles through a fleet leasing program. The payments for the vehicles are based on the terms selected. The Company has determined that it is reasonably certain that the leased vehicles will be held beyond the period in which the entire capitalized value of the vehicle has been paid to the lessor. As such, the capitalized value is the delivered price of the vehicle. The Company's vehicle leases are classified as financing leases.

Supplemental balance sheet information related to the Company's operating and finance leases is as follows:


Leases	Classification	April 2, 2022		January 1, 2022
Assets
Operating lease assets	Right-of-use lease asset, net (1)	$	41,899	$	44,260
Finance lease assets	Property and equipment, net (1)	2,251		2,197
Total leased assets		$	44,150	$	46,457

Liabilities
Current
Operating	Accrued liabilities	$	(12,830)	$	(12,897)
Finance	Current portion of notes payable and other obligations	(1,191)		(1,225)
Noncurrent
Operating	Other long-term liabilities	(30,940)		(33,169)
Finance	Notes payable and other obligations, less current portion	(1,079)		(990)
Total lease liabilities		$	(46,040)	$	(48,281)

(1) At April 2, 2022, operating right of-use lease assets and finance lease assets are recorded net of accumulated amortization of $31,926 and $3,944, respectively. At January 1, 2022, operating right-of-use lease assets and finance lease assets are recorded net of accumulated amortization of $29,257 and $3,643, respectively.

Supplemental balance sheet information related to the Company's operating and finance leases is as follows:


Weighted - Average Remaining Lease Term (Years)	April 2, 2022	January 1, 2022
Operating leases	4.3	4.5
Finance leases	1.6	1.6

Weighted - Average Discount Rate
Operating leases	4%	4%
Finance leases	7%	7%

Supplemental cash flow information related to the Company's operating and finance lease liabilities is as follows:


	Three Months Ended
	April 2, 2022		April 3, 2021
Operating cash flows from operating leases	$	3,442	$	3,517
Financing cash flows from finance leases	$	320	$	255
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	202	$	1,310

The following tables summarize the components of lease cost recognized in the consolidated statements of net income and comprehensive income:


		Three Months Ended
Lease Cost	Classification	April 2, 2022		April 3, 2021
Operating lease cost	Facilities and facilities related	$	3,823	$	3,681
Variable operating lease cost	Facilities and facilities related	575		598
Finance lease cost
Amortization of financing lease assets	Depreciation and amortization	323		255
Interest on lease liabilities	Interest expense	36		33
Total lease cost		$	4,757	$	4,567

As of April 2, 2022, maturities of the Company's lease liabilities under its long-term operating leases and finance leases for the next five fiscal years and thereafter are as follows:


Fiscal Year	Operating Leases		Finance Leases
Remainder of 2022	$	10,790	$	1,001
2023	12,286		800
2024	9,479		400
2025	6,835		198
2026	4,243		139
Thereafter	3,790		17
Total lease payments	47,423		2,555
Less: Interest	(3,653)		(285)
Present value of lease liabilities	$	43,770	$	2,270

Leases

Supplemental balance sheet information related to the Company's operating and finance leases is as follows:


Leases	Classification	April 2, 2022		January 1, 2022
Assets
Operating lease assets	Right-of-use lease asset, net (1)	$	41,899	$	44,260
Finance lease assets	Property and equipment, net (1)	2,251		2,197
Total leased assets		$	44,150	$	46,457

Liabilities
Current
Operating	Accrued liabilities	$	(12,830)	$	(12,897)
Finance	Current portion of notes payable and other obligations	(1,191)		(1,225)
Noncurrent
Operating	Other long-term liabilities	(30,940)		(33,169)
Finance	Notes payable and other obligations, less current portion	(1,079)		(990)
Total lease liabilities		$	(46,040)	$	(48,281)

Supplemental balance sheet information related to the Company's operating and finance leases is as follows:


Weighted - Average Remaining Lease Term (Years)	April 2, 2022	January 1, 2022
Operating leases	4.3	4.5
Finance leases	1.6	1.6

Weighted - Average Discount Rate
Operating leases	4%	4%
Finance leases	7%	7%

Supplemental cash flow information related to the Company's operating and finance lease liabilities is as follows:


	Three Months Ended
	April 2, 2022		April 3, 2021
Operating cash flows from operating leases	$	3,442	$	3,517
Financing cash flows from finance leases	$	320	$	255
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	202	$	1,310

The following tables summarize the components of lease cost recognized in the consolidated statements of net income and comprehensive income:


		Three Months Ended
Lease Cost	Classification	April 2, 2022		April 3, 2021
Operating lease cost	Facilities and facilities related	$	3,823	$	3,681
Variable operating lease cost	Facilities and facilities related	575		598
Finance lease cost
Amortization of financing lease assets	Depreciation and amortization	323		255
Interest on lease liabilities	Interest expense	36		33
Total lease cost		$	4,757	$	4,567

As of April 2, 2022, maturities of the Company's lease liabilities under its long-term operating leases and finance leases for the next five fiscal years and thereafter are as follows:


Fiscal Year	Operating Leases		Finance Leases
Remainder of 2022	$	10,790	$	1,001
2023	12,286		800
2024	9,479		400
2025	6,835		198
2026	4,243		139
Thereafter	3,790		17
Total lease payments	47,423		2,555
Less: Interest	(3,653)		(285)
Present value of lease liabilities	$	43,770	$	2,270