XML 31 R19.htm IDEA: XBRL DOCUMENT

Note 12 - Leases

3 Months Ended

Mar. 29, 2025

12. Leases

We lease certain of our facilities, equipment and vehicles under non-cancelable operating and finance leases. Leases with initial terms of 12 months or less are not recorded on the condensed consolidated balance sheet, but we recognize those lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term. Lease and non-lease components are included in the calculation of the ROU asset and lease liabilities.

Our leases have remaining lease terms of 1 year to 33 years, some of which include one or more options to extend the lease for up to 25 years. Our lease terms include renewal terms when we are reasonably certain that we will exercise the renewal options. We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities.

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Classification	March 29, 2025			December 28, 2024
Assets
Operating lease assets	Operating lease right-of-use assets	$	12,768		$	13,908
Finance lease assets	Property, plant and equipment, net ⁽¹⁾		117			9,676
Total lease assets		$	12,885		$	23,584
Liabilities
Current
Operating	Other accrued liabilities	$	4,871		$	5,296
Finance	Other accrued liabilities⁽¹⁾		11			8,418
Noncurrent
Operating	Long-term lease liabilities		9,179			9,890
Finance	Long-term lease liabilities		-			3
Total lease liabilities		$	14,061		$	23,607

Weighted-average remaining lease term (years)
Operating leases			5.2			5.2
Finance leases			0.9			-

Weighted-average discount rate
Operating leases			6.5	%		6.4	%
Finance leases			4.0	%		2.8	%

(1)

Finance lease assets are recorded net of accumulated amortization of $0.4 million as of March 29, 2025, and December 28, 2024. During the first quarter of fiscal 2024, we executed an agreement to purchase our leased facility in Malaysia for MYR 41.8 million, with the expectation that the title would transfer during fiscal 2024. We treated this transaction as a lease modification, and changed the classification to a finance lease, reducing our operating lease assets and liabilities by $0.4 million and increasing our finance lease assets and current lease liabilities by $8.8 million and $7.9 million, respectively. Due to a seller-imposed delay during the third quarter of fiscal 2024, the purchase date was delayed until fiscal 2025, triggering a modification of the finance lease resulting in the asset increasing to $9.5 million. At December 28, 2024, the finance lease liability decreased to $8.4 million, as a result of fluctuations in foreign currency exchange rates. On December 30, 2024, we completed the purchase of our leased facility in Melaka, Malaysia.

The components of lease expense were as follows:

	Three Months Ended
(in thousands)	March 29, 2025		March 30, 2024
Operating leases	$	1,522	$	1,618
Variable lease expense		646		570
Short-term operating leases		14		1
Finance leases
Amortization of leased assets		21		21
Interest on lease liabilities		1		53
Sublease income		-		(3	)
Net lease cost	$	2,204	$	2,260

Future minimum lease payments on March 29, 2025, are as follows:

	Operating			Finance
(in thousands)	leases			leases		Total
2025	$	4,617		$	8	$	4,625
2026		3,497			3		3,500
2027		1,748			-		1,748
2028		1,318			-		1,318
2029		1,335			-		1,335
Thereafter		4,446			-		4,446
Total lease payments		16,961			11		16,972
Less: Interest		(2,911	)		-		(2,911	)
Present value of lease liabilities	$	14,050		$	11	$	14,061

During the first quarter of 2025, we executed an agreement to lease facilities in San Diego, California. This location will become our new headquarters after our Poway office lease terminates at the end of 2025. The San Diego lease is expected to commence on January 1, 2026, upon when we will add the lease asset and liability to our balance sheet. The minimum lease payments for this lease are $2.5 million, $3.0 million, $2.6 million, $ 3.0 million and $23.8 million for 2026, 2027, 2028, 2029 and thereafter, respectively.

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(in thousands)	March 29, 2025		March 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,508	$	1,670
Financing cash flows from finance leases	$	3	$	8
Leased assets obtained in exchange for new finance lease liabilities	$	-	$	8,844
Leased assets obtained in exchange for new operating lease liabilities	$	63	$	1,049