LEASES

12 Months Ended

Sep. 29, 2023

The Company determines if an arrangement is a lease at inception. The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. As an ongoing accounting policy election under Topic 842, the Company excludes short-term leases (terms of 12 months or less) from the balance sheet presentation and accounts for non-lease and lease components in a contract as a single lease component for most asset classes. All leases in which the Company is the lessee are classified as operating leases, and the Company does not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor.

As of September 29, 2023, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 16 years. Some of the leases contain variable payment terms, such as payments based on fluctuations in the Consumer Price Index (CPI). Some leases also contain options to extend or terminate the lease. To the extent the Company is reasonably certain to exercise these options, they have been considered in the calculation of the right-of-use ("ROU") assets and lease liabilities. Under current lease agreements, there are no residual value guarantees or restrictive lease covenants. In calculating the ROU assets and lease liabilities, several assumptions and judgments were made by the Company, including whether a contract is or contains a lease under the new definition, and the determination of the discount rate, which is assumed to be the

incremental borrowing rate. The incremental borrowing rate is derived from information available to the Company at the lease commencement date based on lease length and location.

As of September 29, 2023, the components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations were as follows:


	Year ended		Year ended		Year ended
	September 29, 2023		September 30, 2022		October 1, 2021
Lease Cost
Operating lease costs	$	9,819	$	9,129	$	8,323
Short-term lease costs	2,493		1,739		1,549
Variable leases costs	171		172		184
Total lease cost	$	12,483	$	11,040	$	10,056

Included in the amounts in the table above was rent expense to related parties of $1,255, $1,209 and $1,043, for the years ended September 29, 2023 September 30, 2022, and October 1, 2021, respectively.

As of September 29, 2023 and September 30, 2022, the Company did not have any finance leases. While the Company extended or renewed various existing leases during the year, there were no significant new leases entered into during the year ended September 29, 2023. As of September 29, 2023, the Company did not have any significant operating lease commitments that have not yet commenced.

Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:


	Year ended			Year ended
	September 29, 2023			September 30, 2022
Operating leases:

Operating lease ROU assets	$	50,746		$	56,625

Current operating leases liabilities	7,009			7,223
Non-current operating lease liabilities	45,335			50,680
Total operating lease liabilities	$	52,344		$	57,903

Weighted average remaining lease term (in years)	11.96			12.59

Weighted average discount rate	3.21		%	3.15		%

Cash paid for amounts included in the measurement of lease liabilities	$	8,858		$	8,066

ROU assets obtained in exchange for lease liabilities	$	3,686		$	13,296

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at September 29, 2023 were as follows:


Year	Related parties included in total		Total
2024	$	1,270	$	8,506
2025	1,308		7,846
2026	1,348		6,142
2027	226		4,914
2028	—		3,728
Thereafter	—		32,551
Total undiscounted lease payments	4,152		63,687
Less: Imputed interest	(103)		(11,343)
Total net lease liability	$	4,049	$	52,344