Leases

9 Months Ended

Oct. 02, 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 October 2, 2022, there were two options to terminate and six options to extend that were accounted for in the determination of the lease term for 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 October 2, 2022.

The total operating lease expense for the three-month and nine-month periods ended October 2, 2022 were $2,255,000 and $6,699,000, respectively. The total operating lease cash payments for the three-month and nine-month periods ended October 2, 2022 were $2,161,000 and $6,467,000, 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 nine-month periods ended October 2, 2022 was $35,000 and $110,000, respectively.

The total operating lease expense for the three-month and nine-month periods ended October 3, 2021 were $2,068,000 and $6,091,000, respectively. The total operating lease cash payments for the three-month and nine-month periods ended October 3, 2021 were $2,079,000 and $6,154,000, 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 nine-month periods ended October 3, 2021 was $36,000 and $114,000, respectively.

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


Year Ended December 31,	Amount
Remainder of fiscal 2022	$	2,245
2023	8,511
2024	5,794
2025	3,837
2026	2,656
2027	2,590
Thereafter	10,808
	$	36,441

The discounted present value of the future lease cash payments resulted in a lease liability of $33,371,000 and $25,581,000 as of October 2, 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 October 2, 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 first quarter of 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 October 2, 2022 and December 31, 2021, respectively. The weighted-average remaining lease term was 6.7 and 5.1 years for the leases outstanding as of October 2, 2022 and December 31, 2021, respectively.