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Leases

9 Months Ended

Jun. 30, 2023

12. Leases

The Company has operating leases for real estate and non-real estate and finance leases for non-real estate in North America, Europe, and Asia. Non-real estate leases are primarily related to vehicles and office equipment. Lease expiration dates range between 2023 and 2043.

The components of lease expense were as follows (in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022

Operating lease costs	$	3,332	$	2,468	$	9,450	$	7,028
Finance lease costs:
Amortization of assets		183		18		409		147
Interest on lease liabilities		12		-		26		5
Total finance lease costs		195		18		435		152
Total operating and finance lease costs		3,527		2,486		9,885		7,180
Variable lease costs		752		783		2,764		2,056
Short-term lease costs		415		640		1,009		1,357
Sublease income		(2)		-		(6)		-
Total lease costs	$	4,692	$	3,909	$	13,652	$	10,593

Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate):


	June 30, 2023			September 30, 2022
Operating Leases:
Operating lease right-of-use assets	$	67,352		$	54,059

Accrued expenses and other current liabilities	$	8,675		$	6,924
Long-term operating lease liabilities		61,799			49,227
Total operating lease liabilities	$	70,474		$	56,151

Finance Leases:
Property, plant and equipment, at cost	$	4,511		$	2,476
Accumulated amortization		(2,501)			(2,276)
Property, plant and equipment, net	$	2,010		$	200

Accrued expenses and other current liabilities	$	673		$	96
Other long-term liabilities		1,467			98
Total finance lease liabilities	$	2,140		$	194

Weighted average remaining lease term (in years):
Operating leases		11.22			10.82
Finance leases		3.54			2.19

Weighted average discount rate:
Operating leases		4.21	%		3.93	%
Finance leases		2.50	%		1.29	%

Supplemental cash flow information related to leases was as follows (in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Cash paid for amounts included in measurement of liabilities:
Operating cash flows - operating leases	$	2,947	$	2,116	$	7,895	$	5,715
Operating cash flows - finance leases	$	12	$	-	$	26	$	4
Financing cash flows - finance leases	$	169	$	43	$	377	$	360

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	6,585	$	122	$	13,021	$	7,612
Finance leases	$	576	$	-	$	1,672	$	-

Future lease payments for operating and finance leases as of June 30, 2023 were as follows for the remainder of fiscal year 2023, the subsequent five fiscal years and thereafter (in thousands):


		Finance Leases	Operating Leases

2023	$	190	$	2,937
2024		711		11,107
2025		619		10,797
2026		453		8,311
2027		217		7,875
2028		38		7,548
Thereafter		9		42,672
Total future lease payments		2,237		91,247
Less imputed interest		(97)		(20,773)
Total lease liability balance	$	2,140	$	70,474

As of June 30, 2023, the Company had entered into leases that had not commenced with future lease payments of $9.3 million. These leases are not reflected in the ROU asset and lease liability in the Condensed Consolidated Balance Sheets. These leases commence in the fourth quarter of fiscal 2023.