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Leases | 6 Months Ended
--- | ---
Jun. 29, 2024
Leases [Abstract] |
Finance Leases | Lessee The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both 1) the right to obtain substantially all of the economic benefits from the use of the asset and 2) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2033. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees, nor material restrictive covenants. The components of operating and finance lease costs for the thirteen and twenty-six weeks ended June 29, 2024 and thirteen and twenty-six weeks ended July 1, 2023 were as follows:
|  | Thirteen Weeks Ended June 29, 2024 |  | Thirteen Weeks Ended July 1, 2023 |  | Twenty-six Weeks Ended June 29, 2024 |  | Twenty-six Weeks Ended July 1, 2023
Operating lease costs |  | $ | 5,229 |  |  | $ | 5,596 |  |  | $ | 10,443 |  |  | $ | 11,043 |
Short term lease costs |  | 1,076 |  |  | 1,743 |  |  | 2,307 |  |  | 3,092 |
Variable lease costs |  | 647 |  |  | 641 |  |  | 1,164 |  |  | 976 |
Finance lease costs: |  |  |  |  |  |  |  |
Amortization of right of use assets |  | 947 |  |  | 588 |  |  | 1,887 |  |  | 1,094 |
Interest on lease liabilities |  | 136 |  |  | 60 |  |  | 263 |  |  | 96 |
Rent expense is recognized on a straight-line basis over the expected lease term. Rent expense totaled $6,952 and $13,914 in the thirteen and twenty-six weeks ended June 29, 2024 and $7,980 and $15,111 in the thirteen and twenty-six weeks ended July 1, 2023. Rent expense includes operating lease costs as well as expenses for non-lease components such as common area maintenance, real estate taxes, real estate insurance, variable costs related to our leased vehicles, and short-term rental expenses. The implicit rate is not determinable in most of the Company’s leases, as such management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 29, 2024 and December 30, 2023:
|  | June 29, 2024 |  | December 30, 2023
|  | Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Weighted average remaining lease term |  | 5.88 |  | 2.98 |  | 6.33 |  | 2.95
Weighted average discount rate |  | 6.93 | % |  | 5.76 | % |  | 7.04 | % |  | 5.38 | %
Supplemental balance sheet information related to the Company's finance leases was as follows as of June 29, 2024 and December 30, 2023:
|  | June 29, 2024 |  | December 30, 2023
Finance lease assets, net, included in property plant and equipment |  | $ | 9,149 |  |  | $ | 7,166 |
Current portion of long-term debt |  | 3,483 |  |  | 2,800 |
Long-term debt, less current portion |  | 5,920 |  |  | 4,512 |
Total principal payable on finance leases |  | $ | 9,403 |  |  | $ | 7,312 |
Supplemental cash flow information related to the Company's operating and finance leases was as follows for the twenty-six weeks ended June 29, 2024 and twenty-six weeks ended July 1, 2023:
|  | Twenty-six Weeks Ended June 29, 2024 |  | Twenty-six Weeks Ended July 1, 2023
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflow from operating leases |  | $ | 10,581 |  |  | $ | 10,038 |
Operating cash outflow from finance leases |  | 258 |  |  | 87 |
Financing cash outflow from finance leases |  | 1,758 |  |  | 1,039 |
As of June 29, 2024, our future minimum rental commitments are immaterial for lease agreements beginning after the current reporting period. Maturities of our lease liabilities for all operating and finance leases are as follows as of June 29, 2024:
|  | Operating Leases |  | Finance Leases
Less than one year |  | $ | 21,025 |  |  | $ | 3,936 |
1 to 2 years |  | 19,980 |  |  | 3,197 |
2 to 3 years |  | 18,847 |  |  | 2,080 |
3 to 4 years |  | 16,801 |  |  | 883 |
4 to 5 years |  | 13,073 |  |  | 155 |
After 5 years |  | 19,640 |  |  | 10 |
Total future minimum rental commitments |  | 109,366 |  |  | 10,261 |
Less - amounts representing interest |  | (19,113) |  |  | (858) |
Present value of lease liabilities |  | $ | 90,253 |  |  | $ | 9,403 |
Lessor The Company has certain arrangements for key duplication equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.
Operating Leases | Lessee The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both 1) the right to obtain substantially all of the economic benefits from the use of the asset and 2) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2033. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees, nor material restrictive covenants. The components of operating and finance lease costs for the thirteen and twenty-six weeks ended June 29, 2024 and thirteen and twenty-six weeks ended July 1, 2023 were as follows:
|  | Thirteen Weeks Ended June 29, 2024 |  | Thirteen Weeks Ended July 1, 2023 |  | Twenty-six Weeks Ended June 29, 2024 |  | Twenty-six Weeks Ended July 1, 2023
Operating lease costs |  | $ | 5,229 |  |  | $ | 5,596 |  |  | $ | 10,443 |  |  | $ | 11,043 |
Short term lease costs |  | 1,076 |  |  | 1,743 |  |  | 2,307 |  |  | 3,092 |
Variable lease costs |  | 647 |  |  | 641 |  |  | 1,164 |  |  | 976 |
Finance lease costs: |  |  |  |  |  |  |  |
Amortization of right of use assets |  | 947 |  |  | 588 |  |  | 1,887 |  |  | 1,094 |
Interest on lease liabilities |  | 136 |  |  | 60 |  |  | 263 |  |  | 96 |
Rent expense is recognized on a straight-line basis over the expected lease term. Rent expense totaled $6,952 and $13,914 in the thirteen and twenty-six weeks ended June 29, 2024 and $7,980 and $15,111 in the thirteen and twenty-six weeks ended July 1, 2023. Rent expense includes operating lease costs as well as expenses for non-lease components such as common area maintenance, real estate taxes, real estate insurance, variable costs related to our leased vehicles, and short-term rental expenses. The implicit rate is not determinable in most of the Company’s leases, as such management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 29, 2024 and December 30, 2023:
|  | June 29, 2024 |  | December 30, 2023
|  | Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Weighted average remaining lease term |  | 5.88 |  | 2.98 |  | 6.33 |  | 2.95
Weighted average discount rate |  | 6.93 | % |  | 5.76 | % |  | 7.04 | % |  | 5.38 | %
Supplemental balance sheet information related to the Company's finance leases was as follows as of June 29, 2024 and December 30, 2023:
|  | June 29, 2024 |  | December 30, 2023
Finance lease assets, net, included in property plant and equipment |  | $ | 9,149 |  |  | $ | 7,166 |
Current portion of long-term debt |  | 3,483 |  |  | 2,800 |
Long-term debt, less current portion |  | 5,920 |  |  | 4,512 |
Total principal payable on finance leases |  | $ | 9,403 |  |  | $ | 7,312 |
Supplemental cash flow information related to the Company's operating and finance leases was as follows for the twenty-six weeks ended June 29, 2024 and twenty-six weeks ended July 1, 2023:
|  | Twenty-six Weeks Ended June 29, 2024 |  | Twenty-six Weeks Ended July 1, 2023
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflow from operating leases |  | $ | 10,581 |  |  | $ | 10,038 |
Operating cash outflow from finance leases |  | 258 |  |  | 87 |
Financing cash outflow from finance leases |  | 1,758 |  |  | 1,039 |
As of June 29, 2024, our future minimum rental commitments are immaterial for lease agreements beginning after the current reporting period. Maturities of our lease liabilities for all operating and finance leases are as follows as of June 29, 2024:
|  | Operating Leases |  | Finance Leases
Less than one year |  | $ | 21,025 |  |  | $ | 3,936 |
1 to 2 years |  | 19,980 |  |  | 3,197 |
2 to 3 years |  | 18,847 |  |  | 2,080 |
3 to 4 years |  | 16,801 |  |  | 883 |
4 to 5 years |  | 13,073 |  |  | 155 |
After 5 years |  | 19,640 |  |  | 10 |
Total future minimum rental commitments |  | 109,366 |  |  | 10,261 |
Less - amounts representing interest |  | (19,113) |  |  | (858) |
Present value of lease liabilities |  | $ | 90,253 |  |  | $ | 9,403 |
Lessor The Company has certain arrangements for key duplication equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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