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Note 16 - Lease Commitments | 6 Months Ended
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Jul. 02, 2023
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] |
16. | LEASE COMMITMENTS
On January 1, 2022, the Company adopted ASC Topic 842, Leases, using the modified retrospective optional transition method provided by ASU 2018-11, Leases (Topic 842). The effect of applying this guidance resulted in an increase in noncurrent assets for right-of-use assets of $33,887 and an increase in liabilities for associated lease obligations of $34,579, most of which were classified as noncurrent. The adoption of the standard did not result in a cumulative-effect adjustment to the opening balance of retained earnings. Under the transition option elected by the Company, ASC Topic 842 is applied only to the most current period and reporting for comparative periods presented in the financial statements continues to be in accordance with ASC Topic 840, Leases, including disclosures. Upon adoption, the Company elected the following practical expedients related to ASC 842:
| • | not reassess whether any expired or existing contracts are or contain leases, not reassess the lease classification for any expired or existing leases, and not reassess initial direct costs for any existing leases;
| • | to account for the lease and non-lease components as a single lease component for all of the Company's leases; and
| • | to apply accounting similar to ASC Topic 840 to leases that meet the definition of short-term leases.
The Company leases retail stores, manufacturing, distribution, engineering, and research and development facilities, office space, equipment, and automobiles under operating lease agreements. Leases have remaining lease terms of one to 11 years, inclusive of renewal options that the Company is reasonably certain to exercise. The following table summarizes operating lease assets and obligations, and provides information associated with the measurement of operating lease obligations.
|  | As of |
|  | July 2, 2023 |  |  | December 31, 2022 |
Assets: |  |  |  |  |  |  |  |
Operating right of use assets |  | $ | 28,965 |  |  | $ | 29,522 |
Liabilities: |  |  |  |  |  |  |  |
Current operating lease liabilities - Accrued liabilities |  | $ | 5,112 |  |  | $ | 5,112 |
Long-term operating lease liabilities |  |  | 24,589 |  |  |  | 24,992 |
Total lease liabilities |  | $ | 29,701 |  |  | $ | 30,104 |
Lease term and discount rate |  |  |  |  |  |  |  |
Weighted average remaining lease term (in years) |  |  | 7.6 |  |  |  | 7.9 |
Weighted average discount rate |  |  | 5.91 | % |  |  | 5.77 | %
The following summarizes the components of operating lease expense and provides supplemental cash flow information for operating leases:
|  | For the thirteen weeks ended |  |  | For the twenty-six weeks ended |
|  | July 2, 2023 |  |  | July 3, 2022 |  |  | July 2, 2023 |  |  | July 3, 2022 |
Components of lease expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating lease expense |  | $ | 1,707 |  |  | $ | 1,482 |  |  | $ | 3,293 |  |  | $ | 3,901 |
Short-term lease expense |  |  | 466 |  |  |  | 642 |  |  |  | 978 |  |  |  | 1,250 |
Variable lease expense |  |  | 17 |  |  |  | 327 |  |  |  | 169 |  |  |  | 414 |
Total lease expense |  | $ | 2,190 |  |  | $ | 2,451 |  |  | $ | 4,440 |  |  | $ | 5,565 |
Supplemental cash flow information related to leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash paid for amounts included in measurement of operating lease liabilities |  | $ | 1,720 |  |  | $ | 1,821 |  |  | $ | 3,471 |  |  | $ | 3,581 |
Right-of-use assets obtained in exchange for new operating lease liabilities |  |  | 2,354 |  |  |  | 13,491 |  |  |  | 2,354 |  |  |  | 13,769 |
Decapitalization of right-of-use assets upon lease termination or modification |  |  | 154 |  |  |  | 12,178 |  |  |  | 154 |  |  |  | 12,178 |
The following table summarizes the maturities of the Company's operating lease liabilities as of July 2, 2023:
2023 (excluding the twenty-six weeks ended July 2, 2023) |  | $ | 3,434 |
2024 |  |  | 5,964 |
2025 |  |  | 4,433 |
2026 |  |  | 4,236 |
2027 |  |  | 4,182 |
Thereafter |  |  | 15,035 |
Total lease payments |  |  | 37,284 |
Less imputed interest |  |  | (7,583 | )
Present value of lease liabilities |  | $ | 29,701 |

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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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