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Note 13 - Leases

12 Months Ended

Sep. 27, 2025

(13) Leases

We use operating leases for certain equipment, office space and vehicles. We determine whether an arrangement is a lease at its inception if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases with an initial term of twelve months or less are not recorded on our consolidated balance sheet. Lease expense for operating leases with original terms of more than twelve months was $1.9 million in 2025, $1.3 million in 2024 and $1.3 million in 2023.

Most of our leases include options to extend or terminate the leases which are exercised at our sole discretion. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate as of the commencement date in determining the present value of lease payments, which represents an estimate of the interest rate we would incur at the lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term.

Supplemental cash flow and non-cash information related to leases is as follows:

(In thousands)	September 27, 2025		September 28, 2024
Cash paid for operating leases included in operating cash flows	$	1,875	$	1,348
Right-of-use assets obtained in exchange for new lease obligations		3,811		946

Supplemental balance sheet information related to leases is as follows:

(In thousands)	September 27, 2025		September 28, 2024
Right-of-use assets:
Other assets	$	3,939	$	1,703

Lease liabilities:
Accrued expenses	$	1,852	$	877
Other liabilities		2,051		811
Total operating lease liabilities	$	3,903	$	1,688

The weighted average remaining lease terms and discount rates for operating leases are as follows:

	September 27, 2025			September 28, 2024
Weighted average lease term (in years)		2.2			2.0
Weighted average discount rate		8.0	%		8.4	%

Aggregate future operating lease payments as of September 27, 2025, are as follows:

(In thousands)
2026	$	2,085
2027		1,539
2028		611
2029		13
2030		3
Total future operating lease payments		4,251
Less: imputed interest		(348	)
Present value of operating lease liabilities	$	3,903