Note 18 - Leases

12 Months Ended

Sep. 27, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

18    LEASES

We lease certain real estate, vehicles, and equipment. Our leases have a remaining lease terms of 1 to 40 years, some of which may include options to extend the leases, and some of which may include options to terminate the leases. The exercise of lease renewal options is at our sole discretion. The depreciable lives of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

As of September 27, 2020, our Consolidated balance sheets include $70,933,000 of operating lease right-to-use assets, $8,577,000 of short-term operating lease liabilities included in Other current liabilities, and $62,374,000 of long-term operating lease liabilities.

Total lease expense consists of the following:

(Thousands of Dollars)	September 27, 2020
Operating lease costs		10,148
Variable lease costs		1,911
Short-term lease costs		426
Total Operating Lease Expense		12,485

Supplemental cash flow information related to our operating leases was as follows:

(Thousands of Dollars)	September 27, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases		10,003
Right-of-use assets obtained in exchange for operating lease liabilities		1,630

As of September 27, 2020, maturities of lease liabilities were as follows:

(Thousands of Dollars)	September 27, 2020
2021		14,438
2022		12,103
2023		11,213
2024		10,538
2025		9,763
Thereafter		41,390
Total lease payments		99,445
Less: interest		(28,494)
Present value of lease liabilities		70,951

As of the year ended September 29, 2019, minimum lease payments during the five years ending September 2024 and thereafter were $3,403,000, $2,290,000, $2,238,000, $1,637,000, $1,367,000, and $4,991,000, respectively.

Our lease contracts are discounted using the incremental borrowing rate for the Company. We determined the incremental borrowing rate based on a senior secured collateral adjusted yield curve for the Company. This yield curve reflects the estimated rate that would have been paid by the Company to borrow on a collateralized basis over a similar term in a similar economic environment. This rate was reassessed as part of the Transactions and was utilized to re-measure the assumed lease liabilities as well as the BH Lease as of March 16, 2020. We will assess this rate annually to determine whether it needs to be updated. The weighted average revolving lease terms and discount rates for all of our operating leases were as follows.

	September 27, 2020
Weighted average remaining lease term (years)		8.64
Weighted Average discount rate		8.24	%