LEASES
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 October 3, 2025, 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). Variable lease payments are expensed in the period in which the obligation for those payments was incurred. 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 October 3, 2025, the components of lease expense recognized in the accompanying Consolidated Statements of Operations were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year ended | | Year ended | | Year ended |
| | October 3, 2025 | | September 27, 2024 | | September 29, 2023 |
| Lease Cost | | | | | | |
| Operating lease costs | | $ | 10,780 | | | $ | 9,889 | | | $ | 9,819 | |
| Short-term lease costs | | 2,188 | | | 2,393 | | | 2,493 | |
| Variable leases costs | | 207 | | | 172 | | | 171 | |
| Total lease cost | | $ | 13,175 | | | $ | 12,454 | | | $ | 12,483 | |
Included in the amounts in the table above was rent expense to related parties of $1,278, $1,255 and $1,255, for the years ended October 3, 2025 September 27, 2024, and September 29, 2023, respectively.
As of October 3, 2025 and September 27, 2024, 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 October 3, 2025. As of October 3, 2025, 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 | | |
| | October 3, 2025 | | September 27, 2024 | | |
| Operating leases: | | | | | | |
| | | | | | |
| Operating lease ROU assets | | $ | 46,570 | | | $ | 47,547 | | | |
| | | | | | |
| Current operating leases liabilities | | 8,260 | | | 7,528 | | | |
| Non-current operating lease liabilities | | 40,424 | | | 41,806 | | | |
| Total operating lease liabilities | | $ | 48,684 | | | $ | 49,334 | | | |
| | | | | | |
| Weighted average remaining lease term (in years) | | 10.14 | | 11.15 | | |
| | | | | | |
| Weighted average discount rate | | 3.38 | % | | 3.21 | % | | |
| | | | | | |
| Cash paid for amounts included in the measurement of lease liabilities | | $ | 10,106 | | | $ | 9,194 | | | |
| | | | | | |
| ROU assets obtained in exchange for lease liabilities | | $ | 8,123 | | | $ | 3,906 | | | |
Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at October 3, 2025 were as follows:
| | | | | | | | | | | |
| Year | Related parties included
in total | | Total |
| 2026 | $ | 1,348 | | | $ | 9,760 | |
| 2027 | 226 | | | 8,026 | |
| 2028 | — | | | 5,478 | |
| 2029 | — | | | 4,099 | |
| 2030 | — | | | 3,796 | |
| Thereafter | — | | | 26,538 | |
| Total undiscounted lease payments | 1,574 | | | 57,697 | |
| Less: Imputed interest | (15) | | | (9,013) | |
| Total net lease liability | $ | 1,559 | | | $ | 48,684 | |
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