LEASES

6 Months Ended

Mar. 31, 2023

The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. The Company determines if an arrangement is a lease at inception.

As of March 31, 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 applicable 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.

The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2023 and April 1, 2022 were as follows:


	Three months ended				Six months ended
	March 31, 2023		April 1, 2022		March 31, 2023		April 1, 2022
Lease Cost
Operating lease costs	$	2,509	$	2,111	$	4,939	$	4,218
Short-term lease costs	598		545		1,127		959
Variable lease costs	44		43		85		88
Total lease cost	$	3,151	$	2,699	$	6,151	$	5,265

Included in the amounts in the table above was rent expense to related parties of $314 and $628 for the three and six months ended March 31, 2023, respectively, and $290 and $581 for the three and six months ended April 1, 2022, respectively.

As of March 31, 2023, the Company did not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor. While the Company extended or renewed various existing leases during the quarter, there were no significant new leases entered into during the quarter ended March 31, 2023. As of March 31, 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:


	Six months ended
	March 31, 2023			April 1, 2022
Operating leases:

Operating lease ROU assets	$	54,080		$	47,225

Current operating lease liabilities	7,148			6,080
Non-current operating lease liabilities	48,413			42,233
Total operating lease liabilities	$	55,561		$	48,313

Weighted average remaining lease term (in years)	12.07			11.86

Weighted average discount rate	3.18		%	3.09		%

Cash paid for amounts included in the measurement of lease liabilities	$	4,360		$	3,739

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at March 31, 2023 were as follows:


Year	Related parties included in total		Total
Remainder of 2023	$	620	$	4,648
2024	1,270		8,399
2025	1,308		7,774
2026	1,348		6,010
2027	226		4,765
Thereafter	—		36,123
Total undiscounted lease payments	4,772		67,719
Less: Imputed interest	(136)		(12,158)
Total net lease liability	$	4,636	$	55,561