COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 28, 2025

Commitments and Contingencies Disclosure [Abstract]

Workers’ compensation commitments

We have provided our insurance carriers and certain states with commitments in the form and amounts listed below:


(in thousands)	December 28, 2025		December 29, 2024
Cash collateral held by workers’ compensation insurance carriers	$	3,376	$	18,082
Cash and cash equivalents held in Trust	11,424		15,406
Investments held in Trust	70,601		99,506
Letters of credit (1)	3,385		2,605
Surety bonds (2)	21,116		19,831
Total collateral commitments	$	109,902	$	155,430

(1)We have agreements with certain financial institutions to issue letters of credit as collateral.

(2)Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days’ notice.

Operating leases

We have contractual commitments in the form of operating leases related to office space, vehicles and equipment. Our leases have remaining terms of up to 11 years. Most leases include one or more options to renew, which can extend the lease term up to 10 years. The exercise of lease renewal options is at our sole discretion. Typically, at the commencement of a lease, we are not reasonably certain we will exercise renewal options, and accordingly they are not considered in determining the initial lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease real estate to third parties in limited circumstances.

Operating lease costs were comprised of the following:



(in thousands)	2025		2024
Operating lease costs	$	13,144	$	14,447
Short-term lease costs (1)	6,445		7,508
Other lease costs, net (2)	3,288		2,841
Total lease costs	$	22,877	$	24,796

(1)Excludes expenses related to leases with a lease term of less than one month.

(2)Other lease costs include variable lease costs, net of rental and sublease income.

Other information related to our operating leases was as follows:


	December 28, 2025	December 29, 2024
Weighted average remaining lease term in years	6.8	7.2
Weighted average discount rate	5.1%	5.1%

Future non-cancelable minimum lease payments under our operating lease commitments as of December 28, 2025, are as follows for each of the next five years and thereafter:


(in thousands)
2026	$	13,880
2027	12,245
2028	10,311
2029	7,838
2030	4,853
Thereafter	20,256
Total undiscounted future non-cancelable minimum lease payments (1)	69,383
Less: Imputed interest (2)	11,381

Present value of lease liabilities	$	58,002

(1)Operating lease payments exclude $0.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

(2)Amount necessary to reduce net minimum lease payments to present value calculated using our incremental borrowing rates, which are consistent with the lease terms at adoption date (for those leases in existence as of the adoption date of the new lease standard) or lease inception (for those leases entered into after the adoption date).

2025 impairment

Following the coronavirus pandemic, the company shifted to a remote or hybrid work model for our headquarters and U.S.-based support teams, reducing the need for corporate office space. As a result, on October 6, 2025, we executed a sublease for our Chicago support center, which was approved by the landlord on October 28, 2025. The sublessee is expected to take possession of the space on April 1, 2026, and the sublease will remain in effect for the duration of the original lease term, concluding on June 29, 2036.

Execution of the sublease required us to reevaluate the long-lived asset group for the Chicago support center and test the new asset group for recoverability and impairment during the fiscal fourth quarter of 2025. The Chicago support center asset group consists of the operating lease right-of-use asset, and related property and equipment, including leasehold improvements and furniture. We determined that the carrying value of the asset group, which was $23.5 million as of the measurement date, was not recoverable based on the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. Therefore, we performed an impairment analysis. To perform this analysis, we estimated the fair value of the asset group using the income approach, specifically a discounted cash flow valuation technique. The valuation incorporated the terms of our executed sublease, which were determined to reflect market-based terms, and a discount rate of 9.0%. As of the measurement date, we concluded that the carrying value of the asset group exceeded its estimated fair value and we recorded a non-cash impairment charge of $18.4 million, which was included in right-of-use and other long-lived asset impairment charge on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended December 28, 2025. The impairment was allocated to the assets within the asset group using a pro-rata method based on relative carrying values, with $13.0 million allocated to operating lease right-of-use assets, net, and the remaining $5.4 million allocated to property and equipment, net, on our Consolidated Balance Sheets, which included leasehold improvement impairment of $5.2 million and furniture impairment of $0.2 million.

Sublease income will be recognized as a reduction to lease expense on a straight-line basis over the remaining lease term, as net presentation better reflects our true cost of leasing the underlying asset. Initial direct costs, which consist of broker fees and tenant improvement allowances to be paid to the subtenant, will be recognized ratably as an offset to sublease income over the remaining term of the lease.

Cash payments for rent expense under the head lease, as well as cash received from sublease income, are classified as cash flows from operating activities on the Consolidated Statements of Cash Flows.

Purchase obligations

Purchase obligations include agreements to purchase goods and services in the ordinary course of business that are enforceable, legally binding and specify all significant terms. Purchase obligations do not include agreements that are cancellable without significant penalty, or have a remaining term of less than one year as of December 28, 2025. We had $19.4 million of purchase obligations as of December 28, 2025, of which $11.6 million are expected to be paid in 2026, $4.3 million in 2027, $2.4 million in 2028, $1.0 million in 2029, and the remaining $0.1 million in 2030.

Legal contingencies and developments

We are involved in various proceedings arising in the normal course of conducting business. We believe the liabilities included in our financial statements reflect the probable loss that can be reasonably estimated and are immaterial. We also believe that the aggregate range of reasonably possible losses for the company's exposure in excess of the amount accrued is expected to be immaterial to the company. It remains possible that despite our current belief, material differences in actual outcomes or changes in management's evaluation or predictions could arise that could have a material effect on the company's financial condition, results of operations or cash flows.