Operating Leases

12 Months Ended

Jan. 02, 2026

Note 9 — Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are two to ten years in length with options to extend. The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease. Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator. For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term. Supplemental balance sheet information related to operating leases consisted of the following (dollars in thousands):

Note 9 — Operating Leases (Continued)


	2025			2024
Machinery and equipment	$	773		$	758
Computer equipment and software		413			446
Real property		39,824			47,648
Operating lease ROU assets, gross		41,010			48,852
Less accumulated depreciation		(11,401	)		(12,002	)
Operating lease ROU assets, net	$	29,609		$	36,850

Current operating lease obligations	$	5,872		$	3,894
Long-term operation lease obligations		32,481			34,807
Total operating lease liability	$	38,353		$	38,701
Weighted-average remaining lease term (in years)		6.7			7.1
Weighted-average discount rate		6.33	%		5.98	%

As discussed in Note 1 – Organization and Description of Business and Accounting Policies – Restructuring, Impairment and Related Charges, during the fiscal year 2025, the Company recognized impairment on real property right-of-use assets of $4,894,000. The impairment relates to the Company’s decision to exit three of its leased properties, for which the Company has obtained a subtenant for one of its properties and is actively pursuing subleasing for the other two properties. The impairment was determined based on market comparables of similar subleased properties. The impairment is recorded in Restructuring, impairment and related charges on the Consolidated Statements of Operations.

Supplemental cash flow information related to operating leases was as follows (in thousands):


	Years Ended
	2025		2024		2023
Operating lease cost	$	7,805	$	8,574	$	5,239
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		6,891		6,016		4,875
ROU assets obtained in exchange for new and amended operating lease liabilities		3,873		8,385		8,498

Future Maturities of Lease Liabilities

Estimated future maturities of lease liabilities for operating leases having initial or remaining non-cancelable lease terms more than one year are as follows (in thousands):


Year Ended	Operating Leases
2026	$	8,194
2027		7,603
2028		6,954
2029		7,150
2030		6,173
Thereafter		12,633
Total minimum lease payments, including interest	$	48,707
Less amounts representing interest		(10,354	)
Total lease liability	$	38,353