XML 32 R22.htm IDEA: XBRL DOCUMENT

Note 15 - Leases

9 Months Ended

Jun. 25, 2022

Note 15 –

Leases

General Lease Description

We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate for some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 month to 13 years.

We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 5 years.

Significant Assumptions and Judgments

Contract Contains a Lease

In evaluating our contracts to determine whether a contract is or contains a lease, we considered the following:

• Whether explicitly or implicitly identified assets have been deployed in the contract; and

• Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.

Allocation of Consideration

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we used judgment and consistent application of assumptions to reasonably allocate the consideration.

Options to Extend or Terminate Leases

We have leases which contain options to extend or terminate the leases. On a lease-by-lease basis, we have determined if the extension should be considered reasonably certain to be exercised and thus a right-of-use asset and a lease liability should be recorded.

Discount Rate

The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

We used the discount rate to calculate the present value of the lease liability at the date of adoption. In the development of the discount rate, we considered our incremental borrowing rate as provided by our lender which was based on cash collateral and credit risk specific to us, and our lease portfolio characteristics.

As of June 25, 2022, the weighted-average discount rate of our operating and finance leases was 3.3% and 3.2%, respectively. As of June 26, 2021, the weighted-average discount rate of our operating and finance leases was 3.2% and 3.2%, respectively.

Practical Expedients and Accounting Policy Elections

We elected the package of practical expedients that permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs and made an accounting policy election to exclude short-term leases with an initial term of 12 months or less from our Consolidated Balance Sheets.

Amounts Recognized in the Financial Statements

The components of lease expense were as follows:

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
	(in thousands)		(in thousands)		(in thousands)		(in thousands)

Operating lease cost in cost of goods sold and operating expenses	$	3,630	$	3,846	$	11,550	$	11,747
Finance lease cost:
Amortization of assets in cost of goods sold and operating expenses		19		62		141		216
Interest on lease liabilities in Interest expense & other		1		5		8		30
Total finance lease cost	$	20	$	67	$	149	$	246
Short-term lease cost in cost of goods sold and operating expenses		-		-		-		-
Total net lease cost	$	3,650	$	3,913	$	11,699	$	11,993

Supplemental balance sheet information related to leases is as follows:

	June 25, 2022		September 25, 2021
	(in thousands)		(in thousands)
Operating Leases
Operating lease right-of-use assets	$	54,990	$	54,555

Current operating lease liabilities	$	14,062	$	13,395
Noncurrent operating lease liabilities		46,017		46,557
Total operating lease liabilities	$	60,079	$	59,952

Finance Leases
Finance lease right-of-use assets in property, plant and equipment, net	$	441	$	561

Current finance lease liabilities	$	189	$	182
Noncurrent finance lease liabilities		318		392
Total finance lease liabilities	$	507	$	574

Supplemental cash flow information related to leases is as follows:

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
	(in thousands)		(in thousands)		(in thousands)		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,181	$	3,860	$	12,189	$	11,847
Operating cash flows from finance leases	$	1	$	64	$	8	$	237
Financing cash flows from finance leases	$	39	$	23	$	150	$	48

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets	$	4,652	$	1,317	$	11,717	$	2,671
Supplemental noncash information on lease liabilities removed due to purchase of leased asset	$	-	$	-	$	-	$	-

As of June 25, 2022, the maturities of lease liabilities were as follows:

				(in thousands)
	Operating Leases			Finance Leases
Three months ending September 24, 2022	$	4,187		$	64
2023		14,973			181
2024		12,251			140
2025		8,753			65
2026		5,666			39
Thereafter		20,515			33
Total minimum payments	$	66,345		$	522
Less amount representing interest		(6,266	)		(15	)
Present value of lease obligations	$	60,079		$	507