Leases

3 Months Ended

Apr. 03, 2022

Leases [Abstract]

Leases

LEASES

General

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. The Company’s 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 accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

The Company records a right-of-use asset and lease liability for leases extending beyond one year for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.

As of April 3, 2022, there were no significant leases that had not commenced.

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of April 3, 2022 and January 2, 2022:

	April 3, 2022				January 2, 2022
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	85,323			$	90,561
Current portion of operating lease liabilities	$	13,906			$	14,588
Operating lease liabilities	73,454				77,905
Total operating lease liabilities	$	87,360			$	92,493
Property, plant and equipment, net			$	4,475			$	6,547
Accrued expenses			$	1,806			$	1,837
Other long-term liabilities			3,055				3,201
Total finance lease liabilities			$	4,861			$	5,038

Lease Costs

	Three Months Ended
	April 3, 2022		April 4, 2021
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	517	$	279
Interest on lease liabilities	29		32
Operating lease cost	4,918		5,886
Short-term lease cost	227		463
Variable lease cost	616		806
Total lease cost	$	6,307	$	7,466

Other Supplemental Information

	Three Months Ended
	April 3, 2022		April 4, 2021
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	21	$	32
Operating cash flows from operating leases	4,635		5,200
Financing cash flows from finance leases	479		527
Right-of-use assets obtained in exchange for new finance lease liabilities	382		1,273
Right-of-use assets obtained in exchange for new operating lease liabilities	20		2,378

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 April 3, 2022 and January 2, 2022:

	April 3, 2022		January 2, 2022
Weighted-average remaining lease term – finance leases (in years)	3.37		3.20
Weighted-average remaining lease term – operating leases (in years)	9.89		9.97
Weighted-average discount rate – finance leases	2.90	%	2.82	%
Weighted-average discount rate – operating leases	5.89	%	5.87	%

Maturity Analysis

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

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2022 (excluding the three months ended April 3, 2022)	$	13,077	$	1,433
2023	13,540		1,582
2024	11,980		1,208
2025	10,162		487
2026	10,387		165
Thereafter	59,149		260
Total future minimum lease payments (undiscounted)	118,295		5,135
Less: Present value discount	(30,935)		(274)
Total lease liability	$	87,360	$	4,861

Leases

LEASES

General

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. The Company’s 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 accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

The Company records a right-of-use asset and lease liability for leases extending beyond one year for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.

As of April 3, 2022, there were no significant leases that had not commenced.

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of April 3, 2022 and January 2, 2022:

	April 3, 2022				January 2, 2022
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	85,323			$	90,561
Current portion of operating lease liabilities	$	13,906			$	14,588
Operating lease liabilities	73,454				77,905
Total operating lease liabilities	$	87,360			$	92,493
Property, plant and equipment, net			$	4,475			$	6,547
Accrued expenses			$	1,806			$	1,837
Other long-term liabilities			3,055				3,201
Total finance lease liabilities			$	4,861			$	5,038

Lease Costs

	Three Months Ended
	April 3, 2022		April 4, 2021
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	517	$	279
Interest on lease liabilities	29		32
Operating lease cost	4,918		5,886
Short-term lease cost	227		463
Variable lease cost	616		806
Total lease cost	$	6,307	$	7,466

Other Supplemental Information

	Three Months Ended
	April 3, 2022		April 4, 2021
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	21	$	32
Operating cash flows from operating leases	4,635		5,200
Financing cash flows from finance leases	479		527
Right-of-use assets obtained in exchange for new finance lease liabilities	382		1,273
Right-of-use assets obtained in exchange for new operating lease liabilities	20		2,378

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 April 3, 2022 and January 2, 2022:

	April 3, 2022		January 2, 2022
Weighted-average remaining lease term – finance leases (in years)	3.37		3.20
Weighted-average remaining lease term – operating leases (in years)	9.89		9.97
Weighted-average discount rate – finance leases	2.90	%	2.82	%
Weighted-average discount rate – operating leases	5.89	%	5.87	%

Maturity Analysis

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

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2022 (excluding the three months ended April 3, 2022)	$	13,077	$	1,433
2023	13,540		1,582
2024	11,980		1,208
2025	10,162		487
2026	10,387		165
Thereafter	59,149		260
Total future minimum lease payments (undiscounted)	118,295		5,135
Less: Present value discount	(30,935)		(274)
Total lease liability	$	87,360	$	4,861