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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.

X

- References

No definition available.

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X

- 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

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X

- 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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Namespace Prefix:	us-gaap_
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