Leases
The Company primarily leases certain office and manufacturing facilities, as well as vehicles, copiers and other equipment. These operating leases generally have an original lease term between 1 year and 20 years, and some include multiple options to extend (generally in increments of 5 to 10 years). Lease agreements generally do not include material variable lease payments, residual value guarantees or restrictive covenants.
The components of ROU assets and lease liabilities were as follows:
| | | | | | | | | | | | | | |
| (dollar amounts in millions) | Balance Sheet Classification | December 28, 2024 | | December 30, 2023 |
| Assets: | | | | |
| Operating lease assets | Right-of-use assets, net | $ | 56.3 | | | $ | 47.6 | |
| Finance lease assets | Right-of-use assets, net | 3.4 | | | 3.3 | |
| Total leased assets | | $ | 59.7 | | | $ | 50.9 | |
| Liabilities: | | | | |
| Current: | | | | |
| Operating | Accrued expenses and other current liabilities | $ | 5.4 | | | $ | 5.4 | |
| Finance | Current maturities of long-term debt | 1.3 | | | 1.0 | |
| Noncurrent: | | | | |
| Operating | Other long-term liabilities | $ | 56.2 | | | $ | 46.9 | |
| Finance | Long-term debt | 2.1 | | | 2.4 | |
| Total lease liabilities | | $ | 65.0 | | | $ | 55.7 | |
The components of lease expense were as follows:
| | | | | | | | | | | | | | | | | |
| (dollar amounts in millions) | December 28, 2024 | | December 30, 2023 | | December 31, 2022 |
| Operating lease cost | $ | 10.1 | | | $ | 8.9 | | | $ | 8.3 | |
| Variable lease cost | 0.9 | | | 0.7 | | | 0.4 | |
| Short-term lease cost | 1.7 | | | 0.9 | | | 0.1 | |
| Finance lease cost: | | | | | |
| Amortization of right-of-use assets | 1.4 | | | 0.8 | | | 0.2 | |
| Interest on lease liabilities | 0.3 | | | 0.2 | | | — | |
| Total lease cost | $ | 14.4 | | | $ | 11.5 | | | $ | 9.0 | |
Other information related to leases was as follows:
| | | | | | | | | | | |
| December 28, 2024 | | December 30, 2023 |
Weighted Average Remaining Lease Term (in years) | | | |
| Operating Leases | 12.6 | | 8.9 |
| Finance Leases | 2.9 | | 3.4 |
| Weighted Average Discount Rate | | | |
| Operating Leases | 7.4% | | 7.6% |
| Finance Leases | 7.9% | | 8.4% |
As of December 28, 2024, future minimum lease payments under noncancellable operating leases with initial or remaining lease terms in excess of one year were as follows:
| | | | | |
| (dollar amounts in millions) | |
| 2025 | $ | 9.7 | |
| 2026 | 9.7 | |
| 2027 | 8.8 | |
| 2028 | 8.6 | |
| 2029 | 7.5 | |
| Thereafter | 53.8 | |
| Total future lease payments | $ | 98.1 | |
| Less: imputed interest | $ | (36.5) | |
| Present value of future lease payments | $ | 61.6 | |
As of December 28, 2024, future minimum repayments of finance leases were as follows:
| | | | | |
| (dollar amounts in millions) | |
| 2025 | $ | 1.5 | |
| 2026 | 1.0 | |
| 2027 | 0.8 | |
| 2028 | 0.3 | |
| 2029 | 0.2 | |
| Total future lease payments | $ | 3.8 | |
| Less: imputed interest | $ | (0.4) | |
| Present value of future lease payments | $ | 3.4 | |
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.