Leases

6 Months Ended

Jul. 03, 2022

The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion.

As of July 3, 2022, there were no options to terminate that were accounted for in the determination of the lease term for outstanding leases, and three options to extend that were accounted for in the determination of the lease term of three of the Company's outstanding leases. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for outstanding leases as of July 3, 2022.

The total operating lease expense for the three-month and six-month periods ended July 3, 2022 were $2,215,000 and $4,444,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 3, 2022 were $2,227,000 and $4,306,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 3, 2022 were $37,000 and $75,000, respectively.

The total operating lease expense for the three-month and six-month periods ended July 4, 2021 were $2,021,000 and $4,023,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 4, 2021 were $2,014,000 and $4,075,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 4, 2021 were $38,000 and $78,000, respectively.

Future operating lease cash payments are as follows (in thousands):


Year Ended December 31,	Amount
Remainder of fiscal 2022	$	4,536
2023	8,002
2024	5,114
2025	3,408
2026	2,731
2027	2,662
Thereafter	11,035
	$	37,488

The discounted present value of the future lease cash payments resulted in a lease liability of $34,252,000 and $25,581,000 as of July 3, 2022 and December 31, 2021, respectively. The Company did not have any leases that had not yet commenced but that created significant rights and obligations as of July 3, 2022.

In December 2021, the Company entered into a lease for a 65,000 square-foot building in Southborough, Massachusetts for a term of ten years to serve as a new distribution center for customers in the Americas. The Company has the right and option to extend the term of this lease for an additional period of five years, commencing upon the expiration of the original ten-year term. This lease commenced during the six-month period ended July 3, 2022, and therefore the Company recorded approximately $9,271,000 within "Operating lease assets" and "Operating lease liabilities" on the Consolidated Balance Sheets on the commencement date.

The weighted-average discount rate was 2.9% and 3.4% for the leases outstanding as of July 3, 2022 and December 31, 2021, respectively. The weighted-average remaining lease term was 6.9 and 5.1 years for the leases outstanding as of July 3, 2022 and December 31, 2021, respectively.