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Note P - Leases

12 Months Ended

Sep. 28, 2024

NOTE P – 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 from some of our office, warehouse, 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 19 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 4 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 a lessee 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 a 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 internal borrowing rate, treasury security rates, collateral, and credit risk specific to us, and our lease portfolio characteristics.

As of September 28, 2024, the weighted-average discount rate of our operating and finance leases was 5.2% and 4.0%, respectively. As of September 30, 2023, the weighted-average discount rate of our operating and finance leases was 4.4% and 3.9%, respectively.

Amounts Recognized in the Financial Statements

The components of lease expense were as follows:

	Fiscal year ended		Fiscal year ended
	September 28, 2024		September 30, 2023
Operating lease cost in Cost of goods sold and Operating expenses	$	27,646	$	17,352
Finance lease cost:
Amortization of assets in Cost of goods sold and Operating expenses	$	159	$	270
Interest on lease liabilities in Interest expense & other		30		22
Total finance lease cost	$	189	$	292
Short-term lease cost in Cost of goods sold and Operating expenses		-		-
Total net lease cost	$	27,835	$	17,644

Supplemental balance sheet information related to leases is as follows:

	September 28, 2024		September 30, 2023
Operating Leases
Operating lease right-of-use assets	$	152,383	$	88,868

Current operating lease liabilities	$	19,063	$	16,478
Noncurrent operating lease liabilities		140,751		77,631
Total operating lease liabilities	$	159,814	$	94,109

Finance Leases
Finance lease right-of-use assets in Property, plant and equipment, net	$	601	$	789

Current finance lease liabilities	$	243	$	201
Noncurrent finance lease liabilities		445		600
Total finance lease liabilities	$	688	$	801

Supplemental cash flow information related to leases is as follows:

	Fiscal year ended		Fiscal year ended
	September 28, 2024		September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	25,784	$	17,536
Operating cash flows from finance leases	$	30	$	22
Financing cash flows from finance leases	$	151	$	180

Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets	$	84,565	$	54,050
Supplemental noncash information on lease liabilities removed due to purchase of leased asset	$	-	$	-

As of September 28, 2024, the maturities of lease liabilities were as follows:

	Operating Leases			Finance Leases
2025	$	26,021		$	259
2026		22,992			193
2027		21,881			158
2028		18,666			109
2029		14,068			18
Thereafter		121,275			-
Total minimum payments		224,903			737
Less amount representing interest		(65,089	)		(49	)
Present value of lease obligations	$	159,814		$	688

As of September 28, 2024, the weighted-average remaining term of our operating and finance leases was 12.6 years and 3.6 years, respectively.

As of September 30, 2023, the weighted-average remaining term of our operating and finance leases was 10.3 years and 4.2 years, respectively.