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Note 12 - Leases

12 Months Ended

Dec. 27, 2025

12.

Leases

We lease certain of our facilities, equipment and vehicles under non-cancelable operating and finance leases. Leases with initial terms with 12 months or less are not recorded in the consolidated balance sheet, but we recognized those lease payments in the 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 right of use asset (“ROU”) asset and lease liabilities.

Our leases have remaining lease terms ranging from 1 year to 32 years, some of which include one or more options to extend the lease for up to 25 years. Our lease term includes 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.

Future minimum lease payments at December 27, 2025, are as follows:

	Operating			Finance
(in thousands)	leases			leases		Total
2026⁽¹⁾	$	6,126		$	-	$	6,126
2027⁽¹⁾		5,201			-		5,201
2028⁽¹⁾		4,310			-		4,310
2029⁽¹⁾		4,646			-		4,646
2030⁽¹⁾		4,884			-		4,884
Thereafter⁽¹⁾		22,399			-		22,399
Total lease payments		47,566			-		47,566
Less: Interest		(12,773	)		-		(12,773	)
Present value of lease liabilities	$	34,793		$	-	$	34,793

(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 December 1, 2025. The new lease results 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 $20.8 million for 2026, 2027, 2028, 2029 and thereafter, respectively.

Supplemental balance sheet information related to leases was as follows:

		December 28,			December 28,
(in thousands)	Classification	2025			2024
Assets:
Operating lease assets	Operating lease right-of-use assets⁽¹⁾	$	29,271		$	13,908
Finance lease assets	Property, plant and equipment, net ⁽²⁾		68			9,676
Total lease assets		$	29,339		$	23,584
Liabilities:
Current:
Operating	Other accrued liabilities	$	3,100		$	5,296
Finance	Other accrued liabilities⁽²⁾		-			8,418
Noncurrent:
Operating	Long-term lease liabilities⁽¹⁾		31,693			9,890
Finance	Long-term lease liabilities		-			3
Total lease liabilities		$	34,793		$	23,607

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

Weighted-average discount rate:
Operating leases			6.5	%		6.4	%
Finance leases			0.0	%		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 December 1, 2025, 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 $0.4 million in both fiscal 2025 and 2024. 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:

	December 27,		December 28,			December 30,
(in thousands)	2025		2024			2023
Operating leases	$	7,698	$	6,247		$	6,691
Variable lease expense		2,669		2,542			2,389
Short-term operating leases		52		4			16
Finance leases:
Amortization of leased assets		62		66			90
Interest on lease liabilities		1		269			1
Sublease income		-		(4	)		(29	)
Net lease cost	$	10,482	$	9,124		$	9,158

Supplemental cash flow information related to leases was as follows:

	December 27,		December 28,		December 30,
(in thousands)	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,383	$	6,448	$	6,756
Operating cash flows from finance leases	$	-	$	263	$	1
Financing cash flows from finance leases	$	7	$	24	$	52
Leased assets exchanged for finance lease liabilities	$	-	$	9,543	$	-
Leased assets exchanged for operating lease liabilities	$	22,141	$	2,987	$	1,415
Financing lease assets acquired from MCT	$	-	$	-	$	19
Operating lease assets acquired from MCT	$	-	$	-	$	130