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Leases
 12 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Leases

11. Leases

We have entered into a number of facility and equipment leases which qualify as operating leases under GAAP. We also have a limited number of equipment leases that qualify as finance leases. We determine if contracts with vendors represent a lease or have a lease component under GAAP at contract inception. Our leases have remaining terms ranging from less than one year to six years. Some of our leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

Operating lease right of use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. As our leases generally do not provide an implicit rate, we use an estimated incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular location and currency environment.

The following table presents certain information related to lease term and incremental borrowing rates for leases as of September 30, 2022 and 2021:

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Weighted-average remaining lease term (in months):

 

 

 

 

 

 

Operating leases

 

 

46.5

 

 

 

52.2

 

Finance leases

 

 

35.6

 

 

 

47.1

 

Weighted-average discount rate:

 

 

 

 

 

 

Operating leases

 

 

3.7

%

 

 

5.1

%

Finance leases

 

 

4.4

%

 

 

4.4

%

 

The following table presents the lease-related assets and liabilities reported in the Consolidated Balance Sheets as of September 30, 2022 and 2021 (dollars in thousands):

 

 

 

Classification

 

September 30, 2022

 

 

September 30, 2021

 

Assets

 

 

 

 

 

 

 

 

Operating lease assets

 

Operating lease right of use assets

 

$

14,702

 

 

$

14,901

 

Finance lease assets

 

Property and equipment, net

 

 

1,259

 

 

 

1,700

 

Total lease assets

 

 

 

$

15,961

 

 

$

16,601

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

 

Operating

 

Short-term operating lease liabilities

 

$

5,071

 

 

$

4,562

 

Finance

 

Accrued expenses and other current liabilities

 

 

441

 

 

 

430

 

Noncurrent

 

 

 

 

 

 

 

 

Operating

 

Long-term operating lease liabilities

 

$

11,375

 

 

$

12,216

 

Finance

 

Other liabilities

 

 

802

 

 

 

1,234

 

Total lease liability

 

 

 

$

17,689

 

 

$

18,442

 

 

The following table presents lease expense for the fiscal years ended September 30, 2022, 2021 and 2020 (dollars in thousands):

 

 

 

Year Ended September 30,

 

 

 

2022

 

 

2021

 

 

2020

 

Finance lease costs:

 

 

 

 

 

 

 

 

 

Amortization of right of use asset

 

$

435

 

 

$

410

 

 

$

255

 

Interest on lease liability

 

 

50

 

 

 

63

 

 

 

22

 

Operating lease cost

 

 

6,788

 

 

 

7,619

 

 

 

8,245

 

Variable lease cost

 

 

3,492

 

 

 

2,142

 

 

 

1,060

 

Sublease income

 

 

(187

)

 

 

(207

)

 

 

(206

)

Total lease cost

 

$

10,578

 

 

$

10,027

 

 

$

9,376

 

 

For the fiscal years ended September 30, 2022, 2021 and 2020 cash payments related to operating leases were $6.7 million, $7.8 million and $8.0 million, respectively. For the fiscal years ended September 30, 2022, 2021 and 2020, cash payments related to financing leases were $0.5 million, $0.5 million and $0.1 million, respectively, of which an immaterial amount related to the interest portion of the lease liability. For the fiscal years ended September 30, 2022, 2021 and 2020 right of use assets obtained in exchange for lease obligations were $7.5 million, $2.9 million and $7.9 million, respectively.

The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases to the total lease liabilities recognized on the Consolidated Balance Sheet as of September 30, 2022 (dollars in thousands):

 

Year Ending September 30,

 

Operating Leases

 

 

Financing Leases

 

 

Total

 

2023

 

$

5,570

 

 

$

476

 

 

$

6,046

 

2024

 

 

4,758

 

 

 

417

 

 

 

5,175

 

2025

 

 

3,221

 

 

 

362

 

 

 

3,583

 

2026

 

 

1,759

 

 

 

53

 

 

 

1,812

 

2027

 

 

1,455

 

 

 

—

 

 

 

1,455

 

Thereafter

 

 

819

 

 

 

—

 

 

 

819

 

Total future minimum lease payments

 

$

17,582

 

 

$

1,308

 

 

$

18,890

 

Less effects of discounting

 

 

(1,136

)

 

 

(65

)

 

 

(1,201

)

Total lease liabilities

 

$

16,446

 

 

$

1,243

 

 

$

17,689

 

Reported as of September 30, 2022

 

 

 

 

 

 

 

 

 

Short-term lease liabilities

 

$

5,071

 

 

$

441

 

 

$

5,512

 

Long-term lease liabilities

 

 

11,375

 

 

 

802

 

 

 

12,177

 

Total lease liabilities

 

$

16,446

 

 

$

1,243

 

 

$

17,689