Leases

12 Months Ended

Jan. 03, 2021

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. 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 January 3, 2021, there were no significant leases that had not commenced as of the end of fiscal year 2020.

The table below represents a summary of the balances recorded in the consolidated balance sheets related to our leases as of January 3, 2021 and December 29, 2019:

	January 3, 2021				December 29, 2019
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	98,013			$	107,044
Current portion of operating lease liabilities	$	13,555			$	15,914
Operating lease liabilities	86,468				91,829
Total operating lease liabilities	$	100,023			$	107,743
Property, plant and equipment, net			$	6,138			$	5,007
Accrued expenses			$	1,496			$	1,489
Other long-term liabilities			2,688				1,673
Total finance lease liabilities			$	4,184			$	3,162

Lease Costs

	Fiscal Year
	2020		2019
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	1,251	$	890
Interest on lease liabilities	86		51
Operating lease cost	25,213		24,246
Short-term lease cost	525		2,057
Variable lease cost	3,970		3,665
Total lease cost	$	31,045	$	30,909

Other Supplemental Information

	Fiscal Year
	2020		2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	86	$	51
Operating cash flows from operating leases	22,206		22,597
Financing cash flows from finance leases	1,727		1,255
Right-of-use assets obtained in exchange for new finance lease liabilities	2,546		2,240
Right-of-use assets obtained in exchange for new operating lease liabilities	2,504		12,655

Rental expense amounted to approximately $28.5 million for fiscal year 2018.

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of January 3, 2021 and December 29, 2019:

	End of Fiscal Year
	2020		2019
Weighted-average remaining lease term – finance leases (in years)	3.35		2.76
Weighted-average remaining lease term – operating leases (in years)	10.61		10.60
Weighted-average discount rate – finance leases	2.64	%	2.06	%
Weighted-average discount rate – operating leases	5.98	%	5.86	%

Maturity Analysis

A maturity analysis of lease payments under non-cancellable leases is presented as follows:

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2021	$	19,055	$	1,598
2022	15,680		1,128
2023	12,750		899
2024	10,715		577
2025	9,863		189
Thereafter	70,744		—
Total future minimum lease payments (undiscounted)	138,807		4,391
Less: Present value discount	(38,784)		(207)
Total lease liability	$	100,023	$	4,184

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. 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 January 3, 2021, there were no significant leases that had not commenced as of the end of fiscal year 2020.

The table below represents a summary of the balances recorded in the consolidated balance sheets related to our leases as of January 3, 2021 and December 29, 2019:

	January 3, 2021				December 29, 2019
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	98,013			$	107,044
Current portion of operating lease liabilities	$	13,555			$	15,914
Operating lease liabilities	86,468				91,829
Total operating lease liabilities	$	100,023			$	107,743
Property, plant and equipment, net			$	6,138			$	5,007
Accrued expenses			$	1,496			$	1,489
Other long-term liabilities			2,688				1,673
Total finance lease liabilities			$	4,184			$	3,162

Lease Costs

	Fiscal Year
	2020		2019
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	1,251	$	890
Interest on lease liabilities	86		51
Operating lease cost	25,213		24,246
Short-term lease cost	525		2,057
Variable lease cost	3,970		3,665
Total lease cost	$	31,045	$	30,909

Other Supplemental Information

	Fiscal Year
	2020		2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	86	$	51
Operating cash flows from operating leases	22,206		22,597
Financing cash flows from finance leases	1,727		1,255
Right-of-use assets obtained in exchange for new finance lease liabilities	2,546		2,240
Right-of-use assets obtained in exchange for new operating lease liabilities	2,504		12,655

Rental expense amounted to approximately $28.5 million for fiscal year 2018.

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of January 3, 2021 and December 29, 2019:

	End of Fiscal Year
	2020		2019
Weighted-average remaining lease term – finance leases (in years)	3.35		2.76
Weighted-average remaining lease term – operating leases (in years)	10.61		10.60
Weighted-average discount rate – finance leases	2.64	%	2.06	%
Weighted-average discount rate – operating leases	5.98	%	5.86	%

Maturity Analysis

A maturity analysis of lease payments under non-cancellable leases is presented as follows:

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2021	$	19,055	$	1,598
2022	15,680		1,128
2023	12,750		899
2024	10,715		577
2025	9,863		189
Thereafter	70,744		—
Total future minimum lease payments (undiscounted)	138,807		4,391
Less: Present value discount	(38,784)		(207)
Total lease liability	$	100,023	$	4,184

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.