Champion Homes, Inc. Leases Disclosure
The Company has operating leases for land, manufacturing and office facilities, and equipment. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company's leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. Lease expense included in selling, general, and administrative expenses in the accompanying consolidated income statements is shown below:
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Year ended |
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(Dollars in thousands) |
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March 29, |
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March 30, |
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Operating lease expense |
|
$ |
12,463 |
|
|
$ |
10,230 |
|
Short-term lease expense |
|
|
2,186 |
|
|
|
2,170 |
|
Total lease expense |
|
$ |
14,649 |
|
|
$ |
12,400 |
|
Operating lease assets and obligations included in the accompanying consolidated balance sheet are shown below:
(Dollars in thousands) |
|
March 29, |
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|
March 30, |
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Right-of-use assets under operating leases: |
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|
|
|
|
|
||
|
$ |
32,351 |
|
|
$ |
38,661 |
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|
Lease obligations under operating leases: |
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|
|
|
|
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||
|
|
9,295 |
|
|
|
7,476 |
|
|
|
|
23,646 |
|
|
|
31,266 |
|
|
Total lease obligation |
|
$ |
32,941 |
|
|
$ |
38,742 |
|
Maturities of operating lease obligations as of March 29, 2025 are shown below:
(Dollars in thousands) |
|
March 29, |
|
|
Fiscal 2026 |
|
$ |
11,032 |
|
Fiscal 2027 |
|
|
9,634 |
|
Fiscal 2028 |
|
|
6,250 |
|
Fiscal 2029 |
|
|
2,167 |
|
Fiscal 2030 |
|
|
1,389 |
|
Thereafter |
|
|
14,089 |
|
Total undiscounted cash flows |
|
|
44,561 |
|
Less: imputed interest |
|
|
(11,620 |
) |
Lease obligations under operating leases |
|
$ |
32,941 |
|
The weighted average lease term and discount rate for operating leases are shown below:
|
|
March 29, |
|
|
Weighted average remaining lease term (in years) |
|
|
7.7 |
|
Weighted average discount rate (as percent) |
|
|
7.1 |
|
Other information related to leases is as follows:
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|
Year ended |
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(Dollars in thousands) |
|
March 29, |
|
|
March 30, |
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Non-cash activity: |
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|
|
|
|
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Right-of-use assets obtained in exchange for operating lease obligations |
|
$ |
3,002 |
|
|
$ |
10,306 |
|
Operating cash flows: |
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|
|
|
|
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Cash paid related to operating lease obligations |
|
$ |
12,407 |
|
|
$ |
9,878 |
|
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.