Leases

6 Months Ended

Dec. 28, 2024

Leases [Abstract]

Leases

Leases

The Company has several commitments under operating and financing leases for warehouses, manufacturing facilities, office buildings, and equipment with initial terms that expire at various dates during the next 1 year to 7 years.

The Company has some leases that include an extension clause. Management has considered the likelihood of exercising each extension option included and estimated the duration of the extension option, for those leases management determined to be reasonably certain, in calculating the lease term for measurement of the right of use asset and liability.

For operating leases, management assumed a discount rate of 4.12%. The weighted average discount rate is disclosed in the tables below.

The components of lease cost for the three months and six months ended December 28, 2024 and December 30, 2023 were (in thousands): 

		Three Months Ended				Six Months Ended
		December 28, 2024		December 30, 2023		December 28, 2024		December 30, 2023
Lease cost	Classification
Operating lease cost	Cost of sales	$	1,261	$	1,223	$	2,600	$	2,350
Operating lease cost	Selling, general and administrative expenses	$	182	$	183	$	366	$	367
Financing lease cost	Cost of sales	$	866	$	1,186	$	2,172	$	2,465
Financing lease cost	Selling, general and administrative expenses	$	45	$	49	$	98	$	104
Total lease cost		$	2,354	$	2,641	$	5,236	$	5,286
Fixed lease cost		$	1,283	$	1,336	$	3,857	$	2,434
Short-term lease cost		1,071		1,305		$	1,379	$	2,852
Total lease cost		$	2,354	$	2,641	$	5,236	$	5,286

Amounts reported in the Consolidated Balance Sheet as of December 28, 2024 and June 29, 2024 were (in thousands, except weighted average lease term and discount rate):

	December 28, 2024		June 29, 2024
Operating Leases:
Operating lease right of use assets	$	13,829	$	15,416
Operating lease liabilities (1)	$	13,829	$	15,416
Weighted-average remaining lease term (in years)
Operating leases	3.56		3.97
Weighted-average discount rate
Operating leases	4.12%		4.00%
Financing Leases (2):
Financing lease right of use assets	$	2,062	$	3,569
Financing lease liabilities	$	1,304	$	2,128
Weighted-average remaining lease term (in years)
Financing leases	0.91		1.06
Weighted-average discount rate
Financing leases	11.80%		11.18%

(1) The current portion of the total operating lease liabilities of $5.4 million is classified under Other Current Liabilities resulting in $8.4 million classified under Operating Lease Liabilities in the Long-term Liabilities section of the condensed consolidated balance sheet.

(2) The total finance lease right of use assets of $2.1 million is classified under Other Long-term Assets. The current portion of the total finance lease liabilities of $1.2 million is classified under Current portion of debt, net, resulting in $0.1 million classified in Other Long-term Liabilities section of the condensed consolidated balance sheet.

Future lease payments under non-cancellable leases as of December 28, 2024 are as follows (in thousands):

Fiscal Years Ending	Operating Leases		Finance Leases
2025 (1)	$	2,728	$	814
2026	4,488		563
2027	3,404		—
2028	2,324		—
2029	1,051		—
Thereafter	822		—
Total undiscounted lease payments	$	14,817	$	1,377
Less: present value discount	(988)		(73)
Total lease liabilities	$	13,829	$	1,304

(1) Represents estimated lease payments for the remaining six-month period ending June 28, 2025.

As of December 28, 2024, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $22 million.

Leases

Leases

The Company has several commitments under operating and financing leases for warehouses, manufacturing facilities, office buildings, and equipment with initial terms that expire at various dates during the next 1 year to 7 years.

The Company has some leases that include an extension clause. Management has considered the likelihood of exercising each extension option included and estimated the duration of the extension option, for those leases management determined to be reasonably certain, in calculating the lease term for measurement of the right of use asset and liability.

For operating leases, management assumed a discount rate of 4.12%. The weighted average discount rate is disclosed in the tables below.

The components of lease cost for the three months and six months ended December 28, 2024 and December 30, 2023 were (in thousands): 

		Three Months Ended				Six Months Ended
		December 28, 2024		December 30, 2023		December 28, 2024		December 30, 2023
Lease cost	Classification
Operating lease cost	Cost of sales	$	1,261	$	1,223	$	2,600	$	2,350
Operating lease cost	Selling, general and administrative expenses	$	182	$	183	$	366	$	367
Financing lease cost	Cost of sales	$	866	$	1,186	$	2,172	$	2,465
Financing lease cost	Selling, general and administrative expenses	$	45	$	49	$	98	$	104
Total lease cost		$	2,354	$	2,641	$	5,236	$	5,286
Fixed lease cost		$	1,283	$	1,336	$	3,857	$	2,434
Short-term lease cost		1,071		1,305		$	1,379	$	2,852
Total lease cost		$	2,354	$	2,641	$	5,236	$	5,286

Amounts reported in the Consolidated Balance Sheet as of December 28, 2024 and June 29, 2024 were (in thousands, except weighted average lease term and discount rate):

	December 28, 2024		June 29, 2024
Operating Leases:
Operating lease right of use assets	$	13,829	$	15,416
Operating lease liabilities (1)	$	13,829	$	15,416
Weighted-average remaining lease term (in years)
Operating leases	3.56		3.97
Weighted-average discount rate
Operating leases	4.12%		4.00%
Financing Leases (2):
Financing lease right of use assets	$	2,062	$	3,569
Financing lease liabilities	$	1,304	$	2,128
Weighted-average remaining lease term (in years)
Financing leases	0.91		1.06
Weighted-average discount rate
Financing leases	11.80%		11.18%

(1) The current portion of the total operating lease liabilities of $5.4 million is classified under Other Current Liabilities resulting in $8.4 million classified under Operating Lease Liabilities in the Long-term Liabilities section of the condensed consolidated balance sheet.

(2) The total finance lease right of use assets of $2.1 million is classified under Other Long-term Assets. The current portion of the total finance lease liabilities of $1.2 million is classified under Current portion of debt, net, resulting in $0.1 million classified in Other Long-term Liabilities section of the condensed consolidated balance sheet.

Future lease payments under non-cancellable leases as of December 28, 2024 are as follows (in thousands):

Fiscal Years Ending	Operating Leases		Finance Leases
2025 (1)	$	2,728	$	814
2026	4,488		563
2027	3,404		—
2028	2,324		—
2029	1,051		—
Thereafter	822		—
Total undiscounted lease payments	$	14,817	$	1,377
Less: present value discount	(988)		(73)
Total lease liabilities	$	13,829	$	1,304

(1) Represents estimated lease payments for the remaining six-month period ending June 28, 2025.

As of December 28, 2024, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $22 million.