Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.2.2
Leases
 9 Months Ended
Oct. 01, 2022
Leases [Abstract]  
Leases Leases
On January 2, 2022, the Group adopted ASU 2016-02, Leases, using the optional transition method. Under this method, the Group has recognized the cumulative effect adjustment to the opening balance of retained earnings. The Group has elected to adopt the package of practical expedients which apply to leases that commenced before the adoption date. By electing the package of practical expedients, the Group did not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and the initial direct costs for any existing leases. At lease commencement, a right-of-use (“ROU”) asset and lease liability is recorded based on the present value of the future lease payments over the lease term. The Group has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. The Group leases facilities, vehicles, and other equipment under long-term operating and financing leases with varying terms.
In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar service, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. Furthermore, for all other types of leases the practical expedient was also elected whereby lease and non-lease components have been combined. The Group uses the non-cancellable lease term unless it is reasonably certain that a renewal or termination option will be exercised. When available, the Group will use the rate implicit in the lease to discount lease payments to present value, however as most leases do not provide an implicit rate, the Group will estimate the incremental borrowing rate to discount the lease payments. The Group estimates the incremental borrowing rate based on the rates of interest that the Group would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term, and in a similar economic environment. The ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. The Group does not consider renewal periods or early terminations to be reasonably certain and are thus not included in the lease term for real estate or equipment assets.
The components of ROU assets and lease liabilities were as follows:
(in thousands) Balance Sheet Classification October 1, 2022
Assets:
Operating lease assets Right-of-use assets, net $ 44,283 
Finance lease assets Right-of-use assets, net 1,246 
Total leased assets $ 45,529 
Liabilities:
Current:
Operating Other accrued expenses $ 5,293 
Financing Current maturities of long-term debt 312 
Noncurrent:
Operating Other long-term liabilities $ 41,688 
Financing Long-term debt 948 
Total lease liabilities $ 48,241 
The components of lease expense were as follows:
Three Months Ended Nine Months Ended
(in thousands) October 1, 2022 October 1, 2022
Operating lease cost $ 2,078  $ 6,083 
Short-term lease cost —  60 
Finance lease cost:
Amortization of right-of-use assets $ 62  $ 128 
Interest on lease liabilities 7  27 
Total lease cost $ 2,147  $ 6,298 
Other information related to leases was as follows:
October 1, 2022
Weighted Average Remaining Lease Term
Operating Leases 9.79
Finance Leases 3.61
Weighted Average Discount Rate
Operating Leases 7.0%
Finance Leases 6.8%
As of October 1, 2022, future minimum lease payments under noncancellable operating leases with initial or remaining lease terms in excess of one year were as follows:
(in thousands)
2022 $ 1,915 
2023 8,278 
2024 7,481 
2025 6,470 
2026 5,938 
Thereafter 36,944 
Total future lease payments $ 67,026 
Less imputed interest $ (20,045)
Present value of future lease payments $ 46,981 
As of October 1, 2022, future minimum repayments of finance leases were as follows:
(in thousands)
2022 $ 96 
2023 385 
2024 385 
2025 385 
2026 161 
Thereafter 10 
Total future lease payments $ 1,422 
Less imputed interest $ (162)
Present value of future lease payments $ 1,260 
Leases Leases
On January 2, 2022, the Group adopted ASU 2016-02, Leases, using the optional transition method. Under this method, the Group has recognized the cumulative effect adjustment to the opening balance of retained earnings. The Group has elected to adopt the package of practical expedients which apply to leases that commenced before the adoption date. By electing the package of practical expedients, the Group did not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and the initial direct costs for any existing leases. At lease commencement, a right-of-use (“ROU”) asset and lease liability is recorded based on the present value of the future lease payments over the lease term. The Group has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. The Group leases facilities, vehicles, and other equipment under long-term operating and financing leases with varying terms.
In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar service, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. Furthermore, for all other types of leases the practical expedient was also elected whereby lease and non-lease components have been combined. The Group uses the non-cancellable lease term unless it is reasonably certain that a renewal or termination option will be exercised. When available, the Group will use the rate implicit in the lease to discount lease payments to present value, however as most leases do not provide an implicit rate, the Group will estimate the incremental borrowing rate to discount the lease payments. The Group estimates the incremental borrowing rate based on the rates of interest that the Group would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term, and in a similar economic environment. The ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. The Group does not consider renewal periods or early terminations to be reasonably certain and are thus not included in the lease term for real estate or equipment assets.
The components of ROU assets and lease liabilities were as follows:
(in thousands) Balance Sheet Classification October 1, 2022
Assets:
Operating lease assets Right-of-use assets, net $ 44,283 
Finance lease assets Right-of-use assets, net 1,246 
Total leased assets $ 45,529 
Liabilities:
Current:
Operating Other accrued expenses $ 5,293 
Financing Current maturities of long-term debt 312 
Noncurrent:
Operating Other long-term liabilities $ 41,688 
Financing Long-term debt 948 
Total lease liabilities $ 48,241 
The components of lease expense were as follows:
Three Months Ended Nine Months Ended
(in thousands) October 1, 2022 October 1, 2022
Operating lease cost $ 2,078  $ 6,083 
Short-term lease cost —  60 
Finance lease cost:
Amortization of right-of-use assets $ 62  $ 128 
Interest on lease liabilities 7  27 
Total lease cost $ 2,147  $ 6,298 
Other information related to leases was as follows:
October 1, 2022
Weighted Average Remaining Lease Term
Operating Leases 9.79
Finance Leases 3.61
Weighted Average Discount Rate
Operating Leases 7.0%
Finance Leases 6.8%
As of October 1, 2022, future minimum lease payments under noncancellable operating leases with initial or remaining lease terms in excess of one year were as follows:
(in thousands)
2022 $ 1,915 
2023 8,278 
2024 7,481 
2025 6,470 
2026 5,938 
Thereafter 36,944 
Total future lease payments $ 67,026 
Less imputed interest $ (20,045)
Present value of future lease payments $ 46,981 
As of October 1, 2022, future minimum repayments of finance leases were as follows:
(in thousands)
2022 $ 96 
2023 385 
2024 385 
2025 385 
2026 161 
Thereafter 10 
Total future lease payments $ 1,422 
Less imputed interest $ (162)
Present value of future lease payments $ 1,260