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Commitments and Contingencies | 12 Months Ended
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Sep. 24, 2016
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Finance Lease Obligations The Company has two non-cancelable lease agreements for buildings that are primarily used for manufacturing. The Company was responsible for a significant portion of the construction costs, and in accordance with ASC 840, Leases, Subsection 40-15-5, the Company was deemed to be the owner of the respective buildings during the construction period. At the completion of the construction period, the Company reviewed the lease for potential sale-leaseback treatment in accordance with ASC 840, Subsection 40, Sale-Leaseback Transactions. Based on its analysis, the Company determined that the lease did not qualify for sale-leaseback treatment. Therefore, the building, leasehold improvements and associated liabilities remain on the Company’s financial statements throughout the lease term, and the building and leasehold improvements are being depreciated on a straight line basis over their estimated useful lives of 35 years. The Company recorded the fair market value of the buildings and land aggregating $28.3 million within property and equipment on its Consolidated Balance Sheets. Depreciation expense related to the buildings and land is recorded within depreciation in the Company's Consolidated Statements of Cash Flows. During fiscal 2016, the Company executed an amendment to one of the leases extending the term to 2024, and a renewal option was removed. There were no other significant provisions to the terms of the lease agreement. At September 24, 2016, the Company has recorded $2.9 million in accrued expenses and $34.8 million in other long-term liabilities related to these obligations. The current term of the leases is for a period of approximately 10 and 8 years, respectively, with the option to extend for one lease for two consecutive 5-year terms and the other for one 5-year term. Future minimum lease payments, including principal and interest, under these leases were as follows at September 24, 2016:
Fiscal 2017 | $ | 3.1 |
Fiscal 2018 | 2.9 |
Fiscal 2019 | 1.2 |
Fiscal 2020 | 1.2 |
Fiscal 2021 | 1.2 |
Thereafter | 2.8 |
Total minimum payments | 12.4 |
Less-amount representing interest | (3.9 | )
Total | $ | 8.5 |
Non-cancelable Purchase and Royalty Commitments The Company has certain non-cancelable purchase obligations primarily related to inventory purchases and diagnostics instruments, primarily the Tigris and Panther systems, and to a lesser extent other operating expense commitments. These obligations are not recorded in the Consolidated Balance Sheets. For reasons of quality assurance, sole source availability or cost effectiveness, certain key components and raw materials and instruments are available only from a sole supplier and the Company has certain long-term supply contracts to assure continuity of supply. At September 24, 2016, purchase commitments are as follows:
Fiscal 2017 | $ | 58.5 |
Fiscal 2018 | 15.6 |
Fiscal 2019 | 13.0 |
Total | $ | 87.1 |
In connection with its R&D efforts, the Company has various license agreements with unrelated parties that provide the Company with rights to develop and market products using certain technology and patent rights. Terms of the various license agreements require the Company to pay royalties ranging from less than 1% up to 35% of future sales on products using the specified technology. Such agreements generally provide for a term that commences upon execution and continues until expiration of the last patent covering the licensed technology. Under certain of these agreements, the Company is required to pay minimum annual royalty payments regardless of the level of sales. In addition, the Company has commitments for minimum payments under certain collaboration agreements. At September 24, 2016, minimum commitments for these agreements are as follows:
Fiscal 2017 | $ | 0.7 |
Fiscal 2018 | 0.7 |
Fiscal 2019 | 0.5 |
Fiscal 2020 | 0.5 |
Fiscal 2021 | 0.5 |
Thereafter | 2.7 |
Total | $ | 5.6 |
Concentration of Suppliers The Company purchases certain components of its products from a single or small number of suppliers. A change in or loss of these suppliers could cause a delay in filling customer orders and a possible loss of sales, which could adversely affect results of operations; however, management believes that suitable replacement suppliers could be obtained in such an event. Operating Leases The Company conducts its operations in leased facilities under operating lease agreements that expire through fiscal 2035. Substantially all of the Company’s lease agreements require the Company to maintain the facilities during the term of the lease and to pay all taxes, insurance, utilities and other costs associated with those facilities. The Company makes customary representations and warranties and agrees to certain financial covenants and indemnities. In the event the Company defaults on a lease, typically the landlord may terminate the lease, accelerate payments and collect liquidated damages. As of September 24, 2016, the Company was not in default of any covenants contained in its lease agreements. Certain of the Company’s lease agreements provide for renewal options. Such renewal options are at rates similar to the current rates under the agreements. Future minimum lease payments under all of the Company’s operating leases at September 24, 2016 are as follows:
Fiscal 2017 | $ | 17.3 |
Fiscal 2018 | 15.5 |
Fiscal 2019 | 10.5 |
Fiscal 2020 | 8.3 |
Fiscal 2021 | 6.6 |
Thereafter | 14.3 |
Total | $ | 72.5 |
Rent expense, net of sublease income from these locations, was $17.9 million, $19.2 million, and $21.1 million for fiscal 2016, 2015 and 2014, respectively. The Company subleases a portion of a building it owns and some of its facilities and has received aggregate rental income of $2.4 million, $2.0 million and $1.8 million in fiscal 2016, 2015 and 2014, respectively, which has been recorded as an offset to rent expense. The future minimum annual rental income payments under these sublease agreements at September 24, 2016 are as follows:
Fiscal 2017 | $ | 2.3 |
Fiscal 2018 | 2.2 |
Fiscal 2019 | 2.1 |
Fiscal 2020 | 1.3 |
Fiscal 2021 | 0.3 |
Thereafter | 0.9 |
Total | $ | 9.1 |

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