Leases

9 Months Ended

Sep. 27, 2021

(3) Leases

The Company leases some of its manufacturing and assembly plants, sales offices and equipment under non-cancellable operating leases that expire at various dates through 2049 and a manufacturing plant under a finance lease. The majority of the Company’s lease arrangements are comprised of fixed payments, and certain leases consist of variable payments based on equipment usage. These variable payments are not included in the measurement of the right-of-use (ROU) asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain leases contain renewal provisions at the Company’s option. Most of the leases require the Company to pay for certain other costs such as property taxes and maintenance. Certain leases also contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents is recognized on a straight-line basis over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense were as follows:

	Quarter Ended				Three Quarters Ended
	September 27, 2021		September 28, 2020		September 27, 2021		September 28, 2020
	(In thousands)
Operating lease cost	$	2,015	$	2,333	$	6,147	$	7,041
Variable lease cost		193		133		567		376
Short-term lease cost		89		84		198		482

Supplemental cash flow information related to leases was as follows:

	Three Quarters Ended
	September 27, 2021		September 28, 2020
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,321	$	6,636
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases		1,954		6,559
Finance lease		15,256		—

Supplemental balance sheet information related to leases was as follows:

		As of
	Balance Sheet Location	September 27, 2021		December 28, 2020
		(In thousands)
Assets:
Operating leases	Operating lease right-of-use assets	$	16,794	$	24,340
Finance lease	Property, plant and equipment, net		14,743		—
Total lease assets		$	31,537	$	24,340
Liabilities:
Current:
Operating leases	Other current liabilities	$	5,528	$	8,144
Finance lease	Other current liabilities		639		—
Long-term:
Operating leases	Operating lease liabilities		12,077		17,211
Finance lease	Other long-term liabilities		14,124		—
Total lease liabilities		$	32,368	$	25,355

	As of
	September 27, 2021			December 28, 2020
Weighted average remaining lease term (years):
Operating leases	4.1			4.2
Finance lease	14.9				—
Weighted average discount rate:
Operating leases		2.89	%		3.31	%
Finance lease		2.69	%		—

Maturities of the Company’s lease liabilities were as follows ⁽¹⁾:

	(In thousands)
Less than one year	$	2,573
1 - 2 years		6,360
2 - 3 years		5,152
3 - 4 years		3,946
4 - 5 years		3,574
Thereafter		15,308
Total lease payments		36,913
Less imputed interest		(4,545	)
Total	$	32,368

(1)

Excludes $851 of legally binding minimum lease payments for leases signed but not yet commenced.