LEASES
We have entered into various non-cancellable operating and finance lease agreements for certain of our offices, manufacturing, technology, sales support and service centers, equipment, and vehicles. We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. Our lease terms may include one or more options to extend the lease terms, for periods from one year to 20 years, when it is reasonably certain that we will exercise that option. As of October 4, 2025, there were no options to extend the lease which was recognized as a right-of-use (“ROU”) asset, or a lease liability. We have lease agreements with lease and non-lease components, and non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. We have elected not to present short-term leases on the Consolidated Balance Sheets as these leases have a lease term of 12 months or less at lease inception.
Operating leases are included in operating ROU assets, current operating lease liabilities and non-current operating lease liabilities, and finance leases are included in property, plant and equipment, accrued expenses and other current liabilities, and other liabilities on the Consolidated Balance Sheets. As of October 4, 2025 and September 28, 2024, our finance leases were not material.
The following table shows the components of lease expense:
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| (in thousands) | | | | | Fiscal | |
| | | | | 2025 | | 2024 | | 2023 | |
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Operating lease expense (1) | | | | | $ | 9,221 | | | $ | 10,015 | | | $ | 10,746 | | |
(1)Operating lease expense includes short-term lease expense and variable lease expenses, which is immaterial for the fiscal years ended October 4, 2025, September 28, 2024 and September 30, 2023.
The following table shows the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below:
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| (in thousands) | Fiscal | | |
| 2025 | | 2024 | | 2023 | | |
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| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
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| Operating cash outflows from operating leases | $ | 10,517 | | | $ | 9,612 | | | $ | 9,314 | | | |
The following table shows the weighted-average lease terms and discount rates for operating leases:
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| As of | | |
| October 4, 2025 | | September 28, 2024 | | |
| Operating leases: | | | | | |
Weighted-average remaining lease term (in years): | 6.6 | | 7.3 | | |
| Weighted-average discount rate: | 6.9 | % | | 7.2 | % | | |
Future lease payments, excluding short-term leases, as of October 4, 2025, are detailed as follows:
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| Operating Leases | | |
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| Fiscal 2026 | $ | 8,714 | | | |
| Fiscal 2027 | 7,577 | | | |
| Fiscal 2028 | 6,927 | | | |
| Fiscal 2029 | 6,646 | | | |
| Fiscal 2030 | 5,209 | | | |
| Thereafter | 13,522 | | | |
| Total minimum lease payments | 48,595 | | | |
| Less: Interest | $ | 10,045 | | | |
| Present value of lease obligations | $ | 38,550 | | | |
| Less: Current portion | $ | 6,178 | | | |
| Long-term portion of lease obligations | $ | 32,372 | | | |