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Note 11 - Leases

6 Months Ended

Jun. 28, 2025

11.

Leases

We lease certain of our facilities, equipment and vehicles under non-cancelable operating and finance leases. Leases with initial terms of 12 months or less are not recorded on the condensed consolidated balance sheet, but we recognize those lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term. Lease and non-lease components are included in the calculation of the ROU asset and lease liabilities.

Our leases have remaining lease terms of 1 year to 33 years, some of which include one or more options to extend the lease for up to 25 years. Our lease terms include renewal terms when we are reasonably certain that we will exercise the renewal options. We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities.

Supplemental balance sheet information related to leases was as follows:

(in thousands)	Classification	June 28, 2025			December 28, 2024
Assets
Operating lease assets	Operating lease right-of-use assets⁽¹⁾	$	32,049		$	13,908
Finance lease assets	Property, plant and equipment, net (2)		104			9,676
Total lease assets		$	32,153		$	23,584
Liabilities
Current
Operating	Other accrued liabilities	$	4,648		$	5,296
Finance	Other accrued liabilities⁽²⁾		10			8,418
Noncurrent
Operating	Long-term lease liabilities⁽¹⁾		32,116			9,890
Finance	Long-term lease liabilities		-			3
Total lease liabilities		$	36,774		$	23,607

Weighted-average remaining lease term (years)
Operating leases			9.0			5.2
Finance leases			0.6			-

Weighted-average discount rate
Operating leases			6.4	%		6.4	%
Finance leases			4.0	%		2.8	%

(1)

In June 2025, we gained access to our new corporate headquarters located in San Diego, California enabling us to make certain preparations for our planned relocation on January 1, 2026, resulting in an increase to our operating lease asset and long term operating lease liability.

(2)

Finance lease assets are recorded net of accumulated amortization of $0.5 million and $0.4 million as of June 28, 2025, and December 28, 2024, respectively. On December 30, 2024 we completed the purchase of our leased facility in Melaka, Malaysia resulting in a decrease to our finance lease asset and liability.

The components of lease expense were as follows:

	Three Months Ended					Six Months Ended
(in thousands)	June 28, 2025		June 29, 2024			June 28, 2025		June 29, 2024
Operating leases	$	1,498	$	1,563		$	3,020	$	3,181
Variable lease expense		650		577			1,296		1,147
Short-term operating leases		15		1			29		2
Finance leases
Amortization of leased assets		20		22			41		43
Interest on lease liabilities		-		80			1		133
Sublease income		-		(1	)		-		(4	)
Net lease cost	$	2,183	$	2,242		$	4,387	$	4,502

Future minimum lease payments on June 28, 2025, are as follows:

	Operating			Finance
(in thousands)	leases			leases		Total
2025	$	3,231		$	7	$	3,238
2026⁽¹⁾		6,248			3		6,251
2027⁽¹⁾		4,931			-		4,931
2028⁽¹⁾		4,054			-		4,054
2029		4,429			-		4,429
Thereafter⁽¹⁾		27,751			-		27,751
Total lease payments		50,644			10		50,654
Less: Interest		(13,880	)		-		(13,880	)
Present value of lease liabilities	$	36,764		$	10	$	36,774

(1)

In June 2025, we gained access to our new corporate headquarters located in San Diego, California enabling us to make certain preparations for our relocation on January 1, 2026. The new lease will result in cash outflows totaling $34.9 million expected to be paid as follows: $2.5 million, $3.0 million, $2.6 million, $3.0 million and $23.8 million for 2026, 2027, 2028, 2029 and thereafter, respectively.

Supplemental cash flow information related to leases was as follows:

	Six Months Ended
(in thousands)	June 28, 2025		June 29, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,055	$	3,275
Operating cash flows from finance leases	$	-	$	129
Financing cash flows from finance leases	$	6	$	11
Leased assets obtained in exchange for new finance lease liabilities	$	-	$	8,844
Leased assets obtained in exchange for new operating lease liabilities	$	20,990	$	1,357