LEASES

9 Months Ended

Jun. 29, 2024

8. LEASES

We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of June 29, 2024, there were no options to extend the lease which was recognized as a right-of-use (“ROU”) asset, or a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Condensed Balance Sheets as these leases have a lease term of 12 months or less at lease inception.

Operating leases are included in operating ROU assets, current operating lease liabilities and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Condensed Balance Sheets. As of June 29, 2024 and September 30, 2023, our finance leases are not material.

The following table shows the components of lease expense:


	Three months ended				Nine months ended
(in thousands)	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Operating lease expense (1)	$	2,310	$	2,846	$	7,725	$	8,119

(1)Operating lease expense includes short-term lease expense and variable lease expenses, which is immaterial for the three and nine months ended June 29, 2024 and July 1, 2023.

The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:


	Nine months ended
(in thousands)	June 29, 2024		July 1, 2023
Cash paid for amounts included in the measurement of lease liabilities:


Operating cash outflows from operating leases	$	7,867	$	6,913

The following table shows the weighted-average lease terms and discount rates for operating leases:


	As of
	June 29, 2024		September 30, 2023
Operating leases:
Weighted-average remaining lease term (in years):	7.4		7.7


Weighted-average discount rate:	7.1	%	6.7	%

Future lease payments, excluding short-term leases, as of June 29, 2024, are detailed as follows:


	As of
(in thousands)	June 29, 2024
Remaining fiscal 2024	$	2,473
Fiscal 2025	9,468
Fiscal 2026	7,109
Fiscal 2027	5,036
Fiscal 2028	4,756
Thereafter	22,489
Total minimum lease payments	$	51,331
Less: Interest	$	11,679
Present value of lease obligations	$	39,652
Less: Current portion	$	7,128
Long-term portion of lease obligations	$	32,524