Leases

9 Months Ended

Jun. 30, 2026

5. Leases

The following table provides information about the financial statement classification of our lease balances reported within the Condensed Consolidated Balance Sheets, in thousands:


	June 30, 2026		September 30, 2025
Assets
Right-of-use assets - operating	$	16,318	$	18,293
Right-of-use assets - finance		207		247
Total right-of-use assets	$	16,525	$	18,540
Liabilities
Current
Operating lease liabilities	$	2,032	$	1,903
Finance lease liabilities		130		126
Total current portion of long-term lease liabilities		2,162		2,029
Long-term
Operating lease liabilities		15,621		17,316
Finance lease liabilities		108		168
Total long-term lease liabilities		15,729		17,484
Total lease liabilities	$	17,891	$	19,513

The following table provides information about the financial statement classification of our lease expenses reported in the Condensed Consolidated Statements of Operations, in thousands:


		Three Months Ended June 30,				Nine Months Ended June 30,
Lease cost	Classification	2026		2025		2026		2025
Operating lease cost	Cost of sales	$	461	$	454	$	1,400	$	1,373
Operating lease cost	Selling, general and administrative		516		371		1,249		1,098
Operating lease cost	Research, development and engineering		—		3		—		9
Finance lease cost	Cost of sales		5		—		14		—
Finance lease cost	Selling, general and administrative		30		26		89		76
Total lease cost		$	1,012	$	854	$	2,752	$	2,556

Future minimum lease payments under non-cancelable leases as of June 30, 2026 are as follows, in thousands:


	Operating Leases		Finance Leases		Total
Remainder of 2026	$	809	$	40	$	849
2027		3,248		120		3,368
2028		3,316		42		3,358
2029		3,389		35		3,424
2030		3,451		20		3,471
Thereafter		8,314		—		8,314
Total lease payments		22,527		257		22,784
Less: Interest		4,874		19		4,893
Present value of lease liabilities	$	17,653	$	238	$	17,891

During the quarter ended June 30, 2026, the Company’s subsidiary, Advanced Compound Materials, Inc., entered into a sublease agreement with a third party with respect to the real property located in Spartanburg, South Carolina. The sublease is effective August 1, 2026 through November 28, 2033. The sublease ends contemporaneously with the head lease. Sublease income will be recognized on a straight-line basis over the term of the sublease. The Company recognized $0.2 million of right‑of‑use asset impairment related to the right of use asset for the head lease during the quarter ended June 30, 2026.

Additionally, on April 1, 2026, the Company remeasured certain operating lease liabilities and corresponding right‑of‑use (“ROU”) assets to reflect changes in lease payments resulting from a modification and reassessment of lease terms. The remeasurement was accounted for as a modification under ASC 842. The impact of this remeasurement is reflected in the accompanying consolidated balance sheets as of June 30, 2026, and in the undiscounted future minimum lease payment table above. The remeasurement resulted in a decrease to operating lease ROU assets and corresponding operating lease liabilities by approximately $0.4 million.

The following table provides information about the remaining lease terms and discount rates applied:


	June 30, 2026			September 30, 2025
Weighted average remaining lease term
Operating leases	6.89 years			7.57 years
Finance leases	2.47 years			2.76 years
Weighted average discount rate
Operating leases		7.23	%		6.91	%
Finance leases		7.06	%		6.85	%