Leases

3 Months Ended

Mar. 28, 2025

Note 7 – Leases

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):


	March 28, 2025			December 27, 2024
Machinery and equipment	$	865		$	758
Computer equipment and software		446			446
Real property		42,288			47,648
Operating lease right-of-use assets, gross		43,599			48,852
Less accumulated depreciation		(12,552	)		(12,002	)
Operating lease right-of-use assets, net	$	31,047		$	36,850

Current operating lease obligations	$	3,560		$	3,894
Long-term operating lease obligations		33,118			34,807
Total operating lease liability	$	36,678		$	38,701
Weighted-average remaining lease term (in years)		7.1			7.1
Weighted-average discount rate		5.94	%		5.98	%

As discussed in Note 1, during the three months ended March 28, 2025, the Company recognized impairment on real property right-of-use assets of $3,407,000. The impairment relates to the Company’s decision to exit two of its leased properties, for which the Company is actively pursuing subleasing. The impairment was determined based on market comparables of similar subleased properties. The impairment is recorded in Restructuring, impairment and related charges on the Condensed Consolidated Statement of Operations.

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


	Three Months Ended
	March 28, 2025		March 29, 2024
Operating lease cost	$	2,149	$	2,223
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,652		1,384
Right-of-use assets obtained in exchange for new operating lease liabilities		304		1,495

Future Maturities of Lease Liabilities

Estimated future maturities of lease liabilities under operating leases having initial or remaining non-cancelable lease terms more than one year as of March 28, 2025 is as follows (in thousands):


As of March 28, 2025 12 Months Ended	Operating Leases
March 2026	$	6,262
March 2027		4,508
March 2028		6,825
March 2029		6,747
March 2030		6,625
Thereafter		17,275
Total future minimum lease payments	$	48,242
Less amounts representing interest		(11,564	)
Total lease liability	$	36,678