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Note 13 - Commitments and Contingencies
 3 Months Ended
Dec. 28, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

Note 13

Commitments and Contingencies

 

We are a party to litigation which has arisen in the normal course of business which management currently believes will not have a material adverse effect on our financial condition or results of operations.

 

We self-insure, up to loss limits, certain insurable risks such as workers’ compensation, automobile, and general liability claims. Accruals for claims under our self-insurance program are recorded on a claims incurred basis. Our total recorded liability for all years’ claims incurred but not yet paid was $16.0 million and $15.3 million at December 28, 2024 and September 28, 2024, respectively. In connection with certain self-insurance agreements, we customarily enter into letters of credit arrangements with our insurers. At both December 28, 2024 and September 28, 2024, we had outstanding letters of credit totaling $12.3 million.

 

We have a self-insured medical plan which covers approximately 1,800 of our employees. We record a liability for incurred but not yet reported or paid claims based on our historical experience of claim payments and a calculated lag time period. Our recorded liability at December 28, 2024 and September 28, 2024 was $1.7 million and $1.6 million, respectively.

 

On August 19, 2024, we experienced a fire at our Holly Ridge plant in North Carolina. The building was damaged as a result of the fire, and plant operations were interrupted. We maintain property, general liability and business interruption insurance coverage. Based on the provisions of our insurance policies, we record estimated insurance recoveries for fire related costs for which recovery is deemed to be probable.

 

In the three months ended September 28, 2024, we recorded $6.8 million of fire related costs, for all of which recovery was deemed to be probable, and we received $5.0 million of insurance proceeds for inventory, fixed asset losses, and other fire related costs. Additionally, we recorded an insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable of $1.8 million, which was recorded in prepaid expenses and other, in the Consolidated Balance Sheet as of September 28, 2024.

 

In the three months ended December 28, 2024, we recorded an additional $8.4 million of fire related costs, for all of which recovery was deemed to be probable, and we received $1.0 million of insurance proceeds for inventory and business interruption losses. Additionally, we recorded a gain of $0.5 million in cost of goods sold in the Consolidated Statement of Earnings representing the proceeds received in excess of losses recognized and we recorded an insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable of $9.7 million, which was recorded in prepaid expenses and other, in the Consolidated Balance Sheet as of December 28, 2024.