LEASES
Included in our Consolidated Balance Sheets were the following amounts related to operating and finance lease assets and liabilities (in thousands):
| | | | | | | | | | | | | | | | | |
| | October 3, 2025 | | September 27, 2024 | Consolidated Balance Sheets Classification |
| Assets: | | | | | |
| Operating lease ROU assets | | $ | 31,883 | | | $ | 29,279 | | Other long-term assets |
| Finance lease assets | | 28,701 | | | 55,389 | | Property and equipment, net |
| | | | | |
| Total lease assets | | $ | 60,584 | | | $ | 84,668 | | |
| Liabilities: | | | | | |
| Current: | | | | | |
| Operating lease liabilities | | $ | 6,284 | | | $ | 7,727 | | Accrued liabilities |
| Finance lease liabilities | | 626 | | | 646 | | Current portion of finance lease obligations |
| | | | | |
| Long-term: | | | | | |
| Operating lease liabilities | | 28,448 | | | 24,173 | | Other long-term liabilities |
| Finance lease liabilities | | 30,504 | | | 31,130 | | Finance lease obligations, less current portion |
| | | | | |
| Total lease liabilities | | $ | 65,862 | | | $ | 63,676 | | |
The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows:
| | | | | | | | |
| October 3, 2025 | September 27, 2024 |
| Weighted-average remaining lease term (in years): | | |
| Operating leases | 7.1 | 4.7 |
| Finance leases | 18.1 | 19.0 |
| Weighted-average discount rate: | | |
| Operating leases | 6.3 | % | 6.4 | % |
| Finance leases | 6.7 | % | 6.7 | % |
The components of lease expense were as follows (in thousands):
| | | | | | | | | | | |
| Fiscal Year Ended |
| October 3, 2025 | September 27, 2024 | September 29, 2023 |
| Finance lease cost: | | | |
| Amortization of lease assets | $ | 1,788 | | $ | 2,332 | | $ | 2,106 | |
| Interest on lease liabilities | 2,141 | | 2,160 | | 2,089 | |
| Total finance lease cost | $ | 3,929 | | $ | 4,492 | | $ | 4,195 | |
| | | |
| Operating lease cost | $ | 9,438 | | $ | 10,280 | | $ | 7,965 | |
| Variable lease cost | $ | 3,389 | | $ | 3,604 | | $ | 2,572 | |
| Short-term lease cost | $ | 289 | | $ | 36 | | $ | 25 | |
| Sublease income | $ | 426 | | $ | 1,324 | | $ | 1,340 | |
Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):
| | | | | | | | | | | |
| Fiscal Year Ended |
| October 3, 2025 | September 27, 2024 | September 29, 2023 |
| Cash paid for amounts included in measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 9,247 | | $ | 10,567 | | $ | 8,644 | |
| Operating cash flows from finance leases | $ | 2,141 | | $ | 2,160 | | $ | 2,089 | |
| Financing cash flows from finance leases | $ | 741 | | $ | 1,175 | | $ | 1,012 | |
| | | |
| Non-cash activities: | | | |
| Operating lease ROU assets obtained in exchange for new lease liabilities | $ | 10,363 | | $ | 10,643 | | $ | 6,758 | |
| Financing lease assets obtained in exchange for new lease liabilities | $ | — | | $ | — | | $ | 5,905 | |
As of October 3, 2025, maturities of lease payments by fiscal year were as follows (in thousands):
| | | | | | | | | | | | | | |
| Fiscal year ending: | | Operating Leases | | Finance Leases |
| 2026 | | $ | 8,264 | | | $ | 2,680 | |
| 2027 | | 6,970 | | | 2,718 | |
| 2028 | | 5,200 | | | 2,754 | |
| 2029 | | 4,436 | | | 2,803 | |
| 2030 | | 3,742 | | | 2,842 | |
| Thereafter | | 15,277 | | | 41,219 | |
| Total lease payments | | 43,889 | | | 55,016 | |
| Less: interest | | (9,157) | | | (23,886) | |
| Present value of lease liabilities | | $ | 34,732 | | | $ | 31,130 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.