LEASES

12 Months Ended

Jun. 29, 2024

Leases [Abstract]

LEASES

LEASES

The Company has several commitments under operating and financing leases for warehouses, manufacturing facilities, office buildings, and equipment with initial terms that expire at various dates during the next 1 year to 10 years.

The Company has some leases that include an extension clause. Management has considered the likelihood of exercising each extension option included and estimated the duration of the extension option, for those leases management determined to be reasonably certain, in calculating the lease term for measurement of the right of use asset and liability.

For operating leases, management assumed a discount rate of 4.0%. The weighted average discount rate is disclosed in the tables below.

The components of lease cost were as follows as of June 29, 2024, July 1, 2023 and July 2, 2022 (in thousands):

		Year Ended		Year Ended		Year Ended
Lease cost	Classification	June 29, 2024		July 1, 2023		July 2, 2022
Operating lease cost	Cost of sales	$	4,814	$	4,519	$	6,442
Operating lease cost	Selling, general and administrative expenses	$	734	$	737	$	929
Financing lease cost	Cost of sales	$	4,865	$	3,891	$	2,054
Financing lease cost	Selling, general and administrative expenses	$	206	$	161	$	64
Total lease cost		$	10,619	$	9,308	$	9,489
Fixed lease cost		$	6,169	$	8,171	$	7,941
Short-term lease cost		4,450		1,137		1,548
Total lease cost		$	10,619	$	9,308	$	9,489

Amounts reported in the Consolidated Balance Sheet as of June 29, 2024, July 1, 2023 and July 2, 2022 were (in thousands, except weighted average lease term and discount rate):

	June 29, 2024		July 1, 2023		July 2, 2022
Operating Leases:
Operating lease right of use assets	$	15,416	$	16,202	$	16,731
Operating lease liabilities (1)	$	15,416	$	16,202	$	16,731
Weighted-average remaining lease term (in years)
Operating leases	3.97		4.55		5.28
Weighted-average discount rate
Operating leases	4.00%		4.00%		4.00		%
Financing Leases (2):
Financing lease right of use assets	$	3,569	$	9,718	$	12,464
Financing lease liabilities	$	2,128	$	8,278	$	11,211
Weighted-average remaining lease term (in years)
Financing leases	1.06		1.89		2.56
Weighted-average discount rate
Financing leases	11.18%		9.96%		8.82		%

(1) The current portion of the total operating lease liabilities of $5.1 million is classified under Other Current Liabilities, resulting in $10.3 million classified under Operating Lease Liabilities in the Long-term Liabilities section of the condensed consolidated balance sheet.

(2) The total finance lease right of use assets of $3.6 million is classified under Other Long-term Assets. The current portion of the total finance lease liabilities of $1.9 million is classified under Other Current Liabilities, resulting in $0.2 million classified in Other Long-term Liabilities section of the condensed consolidated balance sheet.

Future lease payments under non-cancellable leases as of June 29, 2024 are as follows (in thousands):

Fiscal Years Ending	Operating Leases		Finance Leases
2025	$	5,104	$	1,909
2026	4,147		501
2027	3,238		—
2028	2,281		—
2029	1,051		—
Thereafter	822		—
Total undiscounted lease payments	16,643		2,410
Less: present value discount	(1,227)		(282)
Total lease liabilities	$	15,416	$	2,128

LEASES

LEASES

The Company has several commitments under operating and financing leases for warehouses, manufacturing facilities, office buildings, and equipment with initial terms that expire at various dates during the next 1 year to 10 years.

The Company has some leases that include an extension clause. Management has considered the likelihood of exercising each extension option included and estimated the duration of the extension option, for those leases management determined to be reasonably certain, in calculating the lease term for measurement of the right of use asset and liability.

For operating leases, management assumed a discount rate of 4.0%. The weighted average discount rate is disclosed in the tables below.

The components of lease cost were as follows as of June 29, 2024, July 1, 2023 and July 2, 2022 (in thousands):

		Year Ended		Year Ended		Year Ended
Lease cost	Classification	June 29, 2024		July 1, 2023		July 2, 2022
Operating lease cost	Cost of sales	$	4,814	$	4,519	$	6,442
Operating lease cost	Selling, general and administrative expenses	$	734	$	737	$	929
Financing lease cost	Cost of sales	$	4,865	$	3,891	$	2,054
Financing lease cost	Selling, general and administrative expenses	$	206	$	161	$	64
Total lease cost		$	10,619	$	9,308	$	9,489
Fixed lease cost		$	6,169	$	8,171	$	7,941
Short-term lease cost		4,450		1,137		1,548
Total lease cost		$	10,619	$	9,308	$	9,489

Amounts reported in the Consolidated Balance Sheet as of June 29, 2024, July 1, 2023 and July 2, 2022 were (in thousands, except weighted average lease term and discount rate):

	June 29, 2024		July 1, 2023		July 2, 2022
Operating Leases:
Operating lease right of use assets	$	15,416	$	16,202	$	16,731
Operating lease liabilities (1)	$	15,416	$	16,202	$	16,731
Weighted-average remaining lease term (in years)
Operating leases	3.97		4.55		5.28
Weighted-average discount rate
Operating leases	4.00%		4.00%		4.00		%
Financing Leases (2):
Financing lease right of use assets	$	3,569	$	9,718	$	12,464
Financing lease liabilities	$	2,128	$	8,278	$	11,211
Weighted-average remaining lease term (in years)
Financing leases	1.06		1.89		2.56
Weighted-average discount rate
Financing leases	11.18%		9.96%		8.82		%

(1) The current portion of the total operating lease liabilities of $5.1 million is classified under Other Current Liabilities, resulting in $10.3 million classified under Operating Lease Liabilities in the Long-term Liabilities section of the condensed consolidated balance sheet.

(2) The total finance lease right of use assets of $3.6 million is classified under Other Long-term Assets. The current portion of the total finance lease liabilities of $1.9 million is classified under Other Current Liabilities, resulting in $0.2 million classified in Other Long-term Liabilities section of the condensed consolidated balance sheet.

Future lease payments under non-cancellable leases as of June 29, 2024 are as follows (in thousands):

Fiscal Years Ending	Operating Leases		Finance Leases
2025	$	5,104	$	1,909
2026	4,147		501
2027	3,238		—
2028	2,281		—
2029	1,051		—
Thereafter	822		—
Total undiscounted lease payments	16,643		2,410
Less: present value discount	(1,227)		(282)
Total lease liabilities	$	15,416	$	2,128