Leases
The Company leases office space, assembly facilities, repair and service centers, and warehouses globally. Operating lease right-of-use assets and lease liabilities are recognized with initial lease terms greater than one year. Leases with an initial term of 12 months or less are not recognized on the consolidated balance sheets. Lease expense is recognized on a straight-line basis over the lease term.
Supplemental lease information is as follows:
| | | | | | | | | | | |
| Fiscal |
| (In thousands) | 2025 | | 2024 |
| Operating lease cost | $ | 1,790 | | | $ | 1,114 | |
| Short-term lease cost | 5,801 | | | 3,065 | |
| Variable lease cost | 83 | | | 249 | |
| Total lease cost | $ | 7,674 | | | $ | 4,428 | |
| | | | | | | | | | | |
| Fiscal |
| (In thousands, except for weighted-average) | 2025 | | 2024 |
| Weighted-average remaining lease term | 4.8 years | | 5.7 years |
| Weighted-average discount rate | 5.0 | % | | 5.2 | % |
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | 726 | | | $ | 2,105 | |
| Cash paid for operating lease liabilities | $ | 1,731 | | | $ | 1,044 | |
As of June 27, 2025, future minimum lease payments under all non-cancelable operating leases with an initial term greater than one year are as follows (in thousands):
| | | | | | | | |
| 2026 | | $ | 1,385 | |
| 2027 | | 646 | |
| 2028 | | 543 | |
| 2029 | | 308 | |
| 2030 | | 190 | |
| Thereafter | | 838 | |
| Total lease payments | | 3,910 | |
| Less: interest | | (579) | |
| Present value of lease liabilities | | $ | 3,331 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.