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Note 16 - Related Parties
 3 Months Ended
Dec. 28, 2024
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

Note 16

Related Parties

 

NFI Industries, Inc.

 

We have related party expenses for distribution and shipping related costs with NFI Industries, Inc. and its affiliated entities (“NFI”). Our director, Sidney R. Brown, is CEO and an owner of NFI Industries, Inc. In the three months ended December 28, 2024 and December 30 2023, the Company paid NFI $18.8 million and $14.5 million, respectively.

 

Of the amounts paid to NFI, the amount related to transportation management services performed by NFI was $0.2 million in the three months ended December 28, 2024 and $0.3 million in the three months ended December 30, 2023.

 

Of the amounts paid to NFI, the amount related to labor management services performed by NFI was $3.8 million in the three months ended December 28, 2024 and $1.3 million in the three months ended December 30, 2023.

 

In June 2023, the Company began leasing a regional distribution center in Terrell, Texas that was constructed by, and is owned by, a subsidiary of NFI. The distribution center is operated by NFI for the Company, pursuant to a Service Labor Management Agreement. Under the Service Labor Management Agreement, NFI provides logistics and warehouse management services. NFI continues to perform transportation-related management services for the Company as well. At the lease commencement date, $28.7 million was recorded as an operating right-of-use asset, $0.2 million was recorded as a current operating lease liability, and $28.5 million was recorded as a non-current operating lease liability. As of December 28, 2024, $27.2 million was recorded as an operating right-of-use asset, $0.6 million was recorded as a current operating lease liability, and $27.9 million was recorded as a non-current operating lease liability. As of September 28, 2024, $27.4 million was recorded as an operating right-of-use asset, $0.6 million was recorded as a current operating lease liability, and $28.0 million was recorded as a non-current operating lease liability. Of the amounts paid to NFI, the Company made lease payments totaling $0.5 million in both of the three months ended December 28, 2024 and December 30, 2023.

 

The remainder of the costs related to amounts that were passed through to the third-party distribution and shipping vendors that are being managed on the Company’s behalf by NFI. In the three months ended December 28, 2024 and December 30, 2023, the Company made payments to NFI that were passed through to the third party distribution and shipping vendors totaling $14.3 million and $12.4 million, respectively.

 

As of December 28, 2024, and September 28, 2024, related party trade payables of approximately $2.6 million and $0.6 million, respectively, were recorded as accounts payable.

 

All agreements with NFI include terms that are consistent with those that we believe would have been negotiated at an arm’s length with an independent party.

 

AMC Global

 

We incur related party expenses for attitudinal and research services with AMC Global, a global marketing research company. The husband of our director, Marjorie Roshkoff, is CEO and owner of AMC Global. In the three months ended December 28, 2024, the Company did not incur any expenses with AMC Global, and in the three months ended December 30, 2023, the Company paid AMC Global $11,000 for these expenses.

 

Additionally, the Company pays board advisory consulting fees to the husband of our director, Marjorie Roshkoff. In both the three months ended December 28, 2024 and December 30, 2023, the Company paid $13,000 for these board advisory consulting fees.