Leases

12 Months Ended

Dec. 29, 2019

Leases [Abstract]

Leases

LEASES

General

On December 31, 2018, the Company adopted the new lease standard using the transition methodology allowed by the standard to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative prior year periods presented in these financial statements continue to be in accordance with previous GAAP. We have operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. Our leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease terms may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

As of December 29, 2019, there were no significant right-of-use assets and lease obligations from leases that had not commenced as of the end of fiscal 2019.

The table below represents a summary of the balances recorded in the consolidated balance sheet related to our leases as of December 29, 2019:

	December 29, 2019
	(In thousands)
Balance Sheet Location	Operating Leases		Finance Leases
Operating lease right-of-use assets	$	107,044
Current portion of operating lease liabilities	$	15,914
Operating lease liabilities	91,829
Total operating lease liabilities	$	107,743
Property and equipment			$	5,007
Accrued expenses			$	1,489
Other long-term liabilities			1,673
Total finance lease liabilities			$	3,162

Lease Costs

	Fiscal Year
	2019
Lease cost	(In thousands)
Finance lease cost:
Amortization of right-of-use assets	$	890
Interest on lease liabilities	51
Operating lease cost	24,246
Short-term lease cost	2,057
Variable lease cost	3,665
Total lease cost	$	30,909
Other supplemental information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	51
Operating cash flows from operating leases	22,597
Financing cash flows from finance leases	1,255
Right-of-use assets obtained in exchange for new finance lease liabilities	2,240
Right-of-use assets obtained in exchange for new operating lease liabilities	12,655

Rental expense amounted to approximately $28.5 million and $22.0 million for the years 2018 and 2017, respectively.

	December 29, 2019
Weighted-average remaining lease term – finance leases (in years)	2.76
Weighted-average remaining lease term – operating leases (in years)	10.60
Weighted-average discount rate – finance leases	2.06	%
Weighted-average discount rate – operating leases	5.86	%

Maturity Analysis

Maturity analysis of lease payments under non-cancellable leases were as follows:

Fiscal Year	Operating Leases			Finance Leases
	(In thousands)
2020	$	21,659		$	1,543
2021	17,264			861
2022	13,825			475
2023	11,504			290
2024	9,959			88
Thereafter	75,360			—
Total future minimum lease payments (undiscounted)	149,571			3,257
Less: Present value discount	(41,828		)	(95		)
Total lease liability	$	107,743		$	3,162

Practical Expedients and Policy Elections

The Company elected the package of practical expedients permitted under the transition guidance of the new lease standard, which, among other things, allows us to carry forward the historical lease classification and not reassess any initial direct costs for existing leases. In addition, we elected the hindsight practical expedient to determine the lease term, which allows us to use hindsight when considering the impact of options to extend or terminate a lease as well as the option to purchase the underlying asset.

Leases

LEASES

General

On December 31, 2018, the Company adopted the new lease standard using the transition methodology allowed by the standard to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative prior year periods presented in these financial statements continue to be in accordance with previous GAAP. We have operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. Our leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease terms may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

As of December 29, 2019, there were no significant right-of-use assets and lease obligations from leases that had not commenced as of the end of fiscal 2019.

The table below represents a summary of the balances recorded in the consolidated balance sheet related to our leases as of December 29, 2019:

	December 29, 2019
	(In thousands)
Balance Sheet Location	Operating Leases		Finance Leases
Operating lease right-of-use assets	$	107,044
Current portion of operating lease liabilities	$	15,914
Operating lease liabilities	91,829
Total operating lease liabilities	$	107,743
Property and equipment			$	5,007
Accrued expenses			$	1,489
Other long-term liabilities			1,673
Total finance lease liabilities			$	3,162

Lease Costs

	Fiscal Year
	2019
Lease cost	(In thousands)
Finance lease cost:
Amortization of right-of-use assets	$	890
Interest on lease liabilities	51
Operating lease cost	24,246
Short-term lease cost	2,057
Variable lease cost	3,665
Total lease cost	$	30,909
Other supplemental information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	51
Operating cash flows from operating leases	22,597
Financing cash flows from finance leases	1,255
Right-of-use assets obtained in exchange for new finance lease liabilities	2,240
Right-of-use assets obtained in exchange for new operating lease liabilities	12,655

Rental expense amounted to approximately $28.5 million and $22.0 million for the years 2018 and 2017, respectively.

	December 29, 2019
Weighted-average remaining lease term – finance leases (in years)	2.76
Weighted-average remaining lease term – operating leases (in years)	10.60
Weighted-average discount rate – finance leases	2.06	%
Weighted-average discount rate – operating leases	5.86	%

Maturity Analysis

Maturity analysis of lease payments under non-cancellable leases were as follows:

Fiscal Year	Operating Leases			Finance Leases
	(In thousands)
2020	$	21,659		$	1,543
2021	17,264			861
2022	13,825			475
2023	11,504			290
2024	9,959			88
Thereafter	75,360			—
Total future minimum lease payments (undiscounted)	149,571			3,257
Less: Present value discount	(41,828		)	(95		)
Total lease liability	$	107,743		$	3,162

Practical Expedients and Policy Elections

The Company elected the package of practical expedients permitted under the transition guidance of the new lease standard, which, among other things, allows us to carry forward the historical lease classification and not reassess any initial direct costs for existing leases. In addition, we elected the hindsight practical expedient to determine the lease term, which allows us to use hindsight when considering the impact of options to extend or terminate a lease as well as the option to purchase the underlying asset.