LEASES

9 Months Ended

Jun. 28, 2024

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 June 28, 2024, the Company had approximately 150 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 nine months ended June 28, 2024 and June 30, 2023 were as follows:


	Three months ended				Nine months ended
	June 28, 2024		June 30, 2023		June 28, 2024		June 30, 2023
Lease Cost
Operating lease costs	$	2,470	$	2,541	$	7,411	$	7,480
Short-term lease costs	602		611		1,828		1,738
Variable lease costs	43		43		129		128
Total lease cost	$	3,115	$	3,195	$	9,368	$	9,346

Included in the amounts in the table above was rent expense to related parties of $314 and $941 for the three and nine months ended June 28, 2024, respectively, and $314 and $942 for the three and nine months ended June 30, 2023, respectively.

As of June 28, 2024, 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 June 28, 2024. During the second quarter of fiscal 2024, the Company entered into an agreement to obtain additional space at an existing lease site that will begin in fiscal 2025 and will result in additional estimated lease payments of approximately $2,000 over the remaining lease term, which are not included in the future minimum rental commitments below. As of June 28, 2024, the Company did not have any other significant operating lease commitments that have not yet commenced. Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:


	Nine months ended
	June 28, 2024			June 30, 2023
Operating leases:

Operating lease ROU assets	$	49,017		$	53,104

Current operating lease liabilities	7,648			6,985
Non-current operating lease liabilities	43,124			47,691
Total operating lease liabilities	$	50,772		$	54,676

Weighted average remaining lease term (in years)	11.21			11.93

Weighted average discount rate	3.22		%	3.18		%

Cash paid for amounts included in the measurement of lease liabilities	$	6,884		$	6,611

ROU assets obtained in exchange for lease liabilities	$	3,497		$	3,421

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at June 28, 2024 were as follows:


Year	Related parties included in total		Total
Remainder of 2024	$	319	$	2,391
2025	1,308		9,180
2026	1,348		7,471
2027	226		5,771
2028	—		3,817
Thereafter	—		32,575
Total undiscounted lease payments	3,201		61,205
Less: Imputed interest	(61)		(10,433)
Total net lease liability	$	3,140	$	50,772