Lease Receivable

3 Months Ended

Apr. 02, 2022

6. Lease Receivable

Effective January 2, 2022, the Company adopted ASU 2021-05 prospectively to leases that commenced or were modified on or after the date of adoption, resulting in the Company recording these operating lease assets within property, plant, and equipment, net of accumulated depreciation. The equipment costs associated with such new operating leases were initially deferred and will subsequently be amortized over the lease term on a straight-line basis.

The Company recognizes revenue and costs, as well as a sales-type lease receivable, at the time the lease commences pursuant to deferred equipment agreements containing embedded leases. Lease revenue related to both operating and sales-type leases for the three months ended April 2, 2022 and April 3, 2021 was approximately $13.0 million and $10.0 million, respectively, and is included within revenue in the accompanying condensed consolidated statements of operations. Overall, lease revenue represented less than 5% of the Company’s consolidated revenue for all periods presented. Costs related to embedded leases within the Company’s deferred equipment agreements are included in cost of goods sold in the accompanying condensed consolidated statements of operations.

For operating leases with payments that change over time, the requirement to recognize lease revenue on a straight-line basis may generate an operating lease receivable or deferred operating lease revenue to be recorded on the Company’s balance sheet. As of April 2, 2022 and January 1, 2022, the Company did not have any operating lease receivables. The Company recorded deferred revenue related to operating leases, see Note 13 of these condensed consolidated financial statements for further details.

Sales-type lease receivables consists of the following (in thousands):


	April 2, 2022		January 1, 2022
Lease receivable, gross	$	102,817	$	102,609
Allowance for credit loss	(262)		(255)
Lease receivable, net	102,555		102,354
Less: lease receivable, current	(28,633)		(28,666)
Lease receivable, non-current	$	73,922	$	73,688

As of April 2, 2022, estimated future maturities of customer sales-type lease receivables and operating lease payments for each of the following fiscal years are as follows (in thousands):


Fiscal year	Future Lease Receivables/Payments
	Sales-Type Leases		Operating Leases
2022 (balance of year)	$	21,887	$	926
2023	25,614		1,224
2024	21,994		1,153
2025	16,096		1,099
2026	9,279		928
Thereafter	7,685		2,021
Total	102,555		$	7,351
Less: imputed interest(1)	—
Present value of total lease payments	$	102,555