LEASES

6 Months Ended

Mar. 31, 2024

Leases [Abstract]

LEASES

LEASES

The Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments primarily include rent and insurance costs (lease components). The Company's leases also include non-lease components such as real estate taxes and common-area maintenance costs. The Company elected the practical expedient to account for lease and non-lease components as a single component. In certain of the Company's leases, the non-lease components are variable and in accordance with the standard are therefore excluded from lease payments to determine the ROU asset. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Components of operating lease costs are as follows:

	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2024		2023		2024		2023
Fixed	$	11,863	$	11,373	$	23,437	$	22,667
Variable (a), (b)	2,436		3,246		4,910		6,018
Short-term (b)	1,081		1,844		2,662		4,048
Total	$	15,380	$	16,463	$	31,009	$	32,733

________________

(a) Primarily relates to common-area maintenance and property taxes.

(b) Not recorded on the balance sheet.

Supplemental cash flow information were as follows:

	For the Six Months Ended March 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	22,707	$	19,701
Financing cash flows from finance leases	196		1,309
Total	$	22,903	$	21,010

Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:

	March 31, 2024		September 30, 2023
Operating Leases:
Right of use assets:
Operating right-of-use assets	$	168,252	$	169,942
Lease Liabilities:
Current portion of operating lease liabilities	$	33,433	$	32,632
Long-term operating lease liabilities	145,295		147,224
Total operating lease liabilities	$	178,728	$	179,856
Finance Leases:
Property, plant and equipment, net(1)	$	768	$	994
Lease Liabilities:
Notes payable and current portion of long-term debt	$	152	$	280
Long-term debt, net	127		184
Total financing lease liabilities	$	279	$	464

(1) Finance lease assets are recorded net of accumulated depreciation of $1,547 and $6,769 as of March 31, 2024 and September 30, 2023, respectively.

On September 28, 2023, the Company closed on the exercise of its lease purchase option, as permitted under the lease agreement, to acquire ownership of the manufacturing facility located in Ocala, Florida for a cash purchase price of $23,207. The Ocala lease had a maturity date in 2025 and bore interest at a fixed rate of approximately 5.6%. As a result of exercising the purchase option, the Company no longer has any future lease obligations related to this real estate. The remaining lease liability balance relates to finance equipment leases.

The aggregate future maturities of lease payments for operating leases and finance leases as of March 31, 2024 are as follows (in thousands):

	Operating Leases		Finance Leases
2024(a)	$	22,572	$	97
2025	39,545		125
2026	30,430		67
2027	25,660		6
2028	20,686		—
2029	16,284		—
Thereafter	69,084		—
Total lease payments	$	224,261	$	295
Less: Imputed Interest	(45,533)		(16)
Present value of lease liabilities	$	178,728	$	279

(a) Excluding the six months ended March 31, 2024.

Average lease terms and discount rates at March 31, 2024 were as follows:

Weighted-average remaining lease term (years):
Operating leases	7.5
Finance Leases	3.3
Weighted-average discount rate:
Operating Leases	6.12	%
Finance Leases	6.07	%

LEASES

LEASES

The Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments primarily include rent and insurance costs (lease components). The Company's leases also include non-lease components such as real estate taxes and common-area maintenance costs. The Company elected the practical expedient to account for lease and non-lease components as a single component. In certain of the Company's leases, the non-lease components are variable and in accordance with the standard are therefore excluded from lease payments to determine the ROU asset. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Components of operating lease costs are as follows:

	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2024		2023		2024		2023
Fixed	$	11,863	$	11,373	$	23,437	$	22,667
Variable (a), (b)	2,436		3,246		4,910		6,018
Short-term (b)	1,081		1,844		2,662		4,048
Total	$	15,380	$	16,463	$	31,009	$	32,733

________________

(a) Primarily relates to common-area maintenance and property taxes.

(b) Not recorded on the balance sheet.

Supplemental cash flow information were as follows:

	For the Six Months Ended March 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	22,707	$	19,701
Financing cash flows from finance leases	196		1,309
Total	$	22,903	$	21,010

Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:

	March 31, 2024		September 30, 2023
Operating Leases:
Right of use assets:
Operating right-of-use assets	$	168,252	$	169,942
Lease Liabilities:
Current portion of operating lease liabilities	$	33,433	$	32,632
Long-term operating lease liabilities	145,295		147,224
Total operating lease liabilities	$	178,728	$	179,856
Finance Leases:
Property, plant and equipment, net(1)	$	768	$	994
Lease Liabilities:
Notes payable and current portion of long-term debt	$	152	$	280
Long-term debt, net	127		184
Total financing lease liabilities	$	279	$	464

(1) Finance lease assets are recorded net of accumulated depreciation of $1,547 and $6,769 as of March 31, 2024 and September 30, 2023, respectively.

On September 28, 2023, the Company closed on the exercise of its lease purchase option, as permitted under the lease agreement, to acquire ownership of the manufacturing facility located in Ocala, Florida for a cash purchase price of $23,207. The Ocala lease had a maturity date in 2025 and bore interest at a fixed rate of approximately 5.6%. As a result of exercising the purchase option, the Company no longer has any future lease obligations related to this real estate. The remaining lease liability balance relates to finance equipment leases.

The aggregate future maturities of lease payments for operating leases and finance leases as of March 31, 2024 are as follows (in thousands):

	Operating Leases		Finance Leases
2024(a)	$	22,572	$	97
2025	39,545		125
2026	30,430		67
2027	25,660		6
2028	20,686		—
2029	16,284		—
Thereafter	69,084		—
Total lease payments	$	224,261	$	295
Less: Imputed Interest	(45,533)		(16)
Present value of lease liabilities	$	178,728	$	279

(a) Excluding the six months ended March 31, 2024.

Average lease terms and discount rates at March 31, 2024 were as follows:

Weighted-average remaining lease term (years):
Operating leases	7.5
Finance Leases	3.3
Weighted-average discount rate:
Operating Leases	6.12	%
Finance Leases	6.07	%