Leases

12 Months Ended

Dec. 26, 2020

We adopted Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842),” ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” and ASU 2019-01, “Leases (Topic 842): Codification Improvements," on December 30, 2018, the first day of fiscal 2019, using the modified transition approach. The modified transition approach permitted a company to use its effective date as the date of initial application and to apply the standard to its leases, and, therefore, not restate comparative prior period financial information. Consequently, prior period financial information is not updated, and the disclosures required under the new standard are not provided for the period before December 30, 2018.

Our operating lease, right-of-use assets relate to real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for our corporate headquarters located in Livermore, California. Our leases have remaining terms of 1 to 8 years, and some leases include options to extend up to 20 years. We also have operating leases for automobiles with remaining lease terms of 1 to 3 years. We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time. The weighted-average remaining lease term for our operating leases was 6.6 years at December 26, 2020 and the weighted-average discount rate was 4.33%.

The components of lease expense were as follows (in thousands):


	Lease Expense
	December 26, 2020		December 28, 2019
Operating lease expense	$	7,468	$	6,985
Short-term lease expense	136		142
Variable lease expense	1,574		1,286
	$	9,178	$	8,413

Operating lease expense for the year ended December 29, 2018 was $8.4 million.

Future minimum payments under our non-cancelable operating leases were as follows as of December 26, 2020 (in thousands):


Fiscal Year	Amount
2021	$	7,349
2022	6,115
2023	5,254
2024	4,903
2025	4,863
Thereafter	12,531
Total minimum lease payments	41,015
Less: interest	(6,315)
Present value of net minimum lease payments	34,700
Less: current portion	(6,704)
Total long-term operating lease liabilities	$	27,996