Note P - Leases

12 Months Ended

Sep. 24, 2022

Notes to Financial Statements

Lessee, Leases [Text Block]

NOTE P – LEASES

General Lease Description                                                                        

We have operating leases with initial noncancelable lease terms in excess of one year covering the rental of various facilities and equipment. Certain of these leases contain renewal options and some provide options to purchase during the lease term. Our operating leases include leases for real estate from some of our office and manufacturing facilities as well as manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these operating leases range from 1 month to 12 years.                                                                                 

We have finance leases with initial noncancelable lease terms in excess of one year covering the rental of various equipment. These leases are generally for manufacturing and non-manufacturing equipment used in our business. The remaining lease terms for these finance leases range from 1 year to 5 years.                                                                                 

Significant Assumptions and Judgments

Contract Contains a Lease

In evaluating our contracts to determine whether a contract is or contains a lease, we considered the following:                                                               

•         Whether explicitly or implicitly identified assets have been deployed in the contract; and                  

•         Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.         

Allocation of Consideration                                                               

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we used judgment and consistent application of assumptions to reasonably allocate the consideration.          

Options to Extend or Terminate Leases                                             

We have leases which contain options to extend or terminate the leases. On a lease-by-lease basis, we have determined if the extension should be considered reasonably certain to be exercised and thus a right-of-use asset and a lease liability should be recorded.         

Discount Rate                                                                        

The discount rate for leases, if not explicitly stated in the lease, is the incremental borrowing rate, which is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.         

We used a discount rate to calculate the present value of the lease liability at the date of adoption. In the development of the discount rate, we considered our internal borrowing rate, treasury security rates, collateral, and credit risk specific to us, and our lease portfolio characteristics.   

As of  September 24, 2022, the weighted-average discount rate of our operating and finance leases was 3.3% and 3.2%, respectively. As of September 25, 2021, the weighted-average discount rate of our operating and finance leases was 3.3% and 3.2%, respectively

Amounts Recognized in the Financial Statements

The components of lease expense were as follows:

	Fiscal year ended		Fiscal year ended
	September 24, 2022		September 25, 2021
Operating lease cost in Cost of goods sold and Operating Expenses	$	15,611	$	15,471
Finance lease cost:
Amortization of assets in Cost of goods sold and Operating Expenses	$	160	$	346
Interest on lease liabilities in Interest expense & other		13		25
Total finance lease cost	$	173	$	371
Short-term lease cost in Cost of goods sold and Operating Expenses		-		-
Total net lease cost	$	15,784	$	15,842

Supplemental balance sheet information related to leases is as follows:

	September 24, 2022		September 25, 2021
Operating Leases
Operating lease right-of-use assets	$	51,137	$	54,555
Current operating lease liabilities	$	13,524	$	13,395
Noncurrent operating lease liabilities		42,660		46,557
Total operating lease liabilities	$	56,184	$	59,952
Finance Leases
Finance lease right-of-use assets in Property, plant and equipment, net	$	328	$	561
Current finance lease liabilities	$	124	$	182
Noncurrent finance lease liabilities		254		392
Total finance lease liabilities	$	378	$	574

Supplemental cash flow information related to leases is as follows:

	Fiscal year ended		Fiscal year ended
	September 24, 2022		September 25, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	16,505	$	15,651
Operating cash flows from finance leases	$	13	$	144
Financing cash flows from finance leases	$	279	$	25
Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets	$	11,783	$	6,513
Supplemental noncash information on lease liabilities removed due to purchase of leased asset	$	-	$	-

As of  September 24, 2022, the maturities of lease liabilities were as follows:

	Operating Leases			Finance Leases
2023	$	15,138		$	160
2024		12,410			113
2025		8,969			53
2026		5,822			39
2027		4,762			32
Thereafter		15,163			-
Total minimum payments		62,264			397
Less amount representing interest		(6,080	)		(19	)
Present value of lease obligations	$	56,184		$	378

As of September 24, 2022 the weighted-average remaining term of our operating and finance leases was 5.8 years and 3.3 years, respectively.