Operating Leases

9 Months Ended

Sep. 26, 2025

Note 8 — Operating Leases

The Company entered into operating leases primarily related to real property (office, manufacturing and warehouse facilities), automobiles and copiers. These operating leases are two to ten years in length with options to extend. The Company does not include any lease extensions in the initial valuation unless the Company was reasonably certain to extend the lease. Depending on the lease, there are those with fixed payment amounts for the entire length of the contract or payments which increase periodically as noted in the contract or increased at an inflation rate indicator. For operating leases that increase using an inflation rate indicator, the Company used the inflation rate at the time the lease was entered into for the length of the lease term. Supplemental balance sheet information related to operating leases consisted of the following (in thousands):


	September 26, 2025			December 27, 2024
Machinery and equipment	$	782		$	758
Computer equipment and software		413			446
Real property		44,095			47,648
Operating lease right-of-use assets, gross		45,290			48,852
Less accumulated depreciation		(13,951	)		(12,002	)
Operating lease right-of-use assets, net	$	31,339		$	36,850

Current operating lease obligations	$	5,314		$	3,894
Long-term operating lease obligations		33,803			34,807
Total operating lease liability	$	39,117		$	38,701
Weighted-average remaining lease term (in years)		6.7			7.1
Weighted-average discount rate		6.04	%		5.98	%

As discussed in Note 1, during the nine months ended September 26, 2025, the Company recognized impairment on real property right-of-use assets of $4,083,000, respectively. The impairment relates to the Company’s decision to exit three of its leased properties, for which the Company has obtained a subtenant for one of its properties and is actively pursuing subleasing for the other two properties. The impairment was determined based on market comparables of similar subleased properties. The impairment is recorded in Restructuring, impairment and related charges on the Condensed Consolidated Statements of Operations.

Note 8 — Operating Leases (Continued)

Supplemental cash flow information related to operating leases was as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 26, 2025		September 27, 2024		September 26, 2025		September 27, 2024
Operating lease cost	$	1,757	$	2,128	$	5,704	$	6,440
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows		1,724		1,578		5,037		4,443
Right-of-use assets obtained in exchange for new operating lease liabilities		91		4,254		2,024		7,740

Future Maturities of Lease Liabilities

Estimated future maturities of lease liabilities under operating and finance leases having initial or remaining non-cancelable lease terms more than one year as of September 26, 2025 is as follows (in thousands):


As of September 26, 2025 12 Months Ended	Operating Leases
September 2026	$	7,605
September 2027		7,767
September 2028		6,759
September 2029		6,955
September 2030		6,274
Thereafter		14,495
Total future minimum lease payments		49,855
Less amounts representing interest		(10,738	)
Total lease liability	$	39,117