LEASES

9 Months Ended

Jun. 30, 2023

The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. The Company determines if an arrangement is a lease at inception.

As of June 30, 2023, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 16 years. Some of the leases contain variable payment terms, such as payments based on fluctuations in the Consumer Price Index (CPI). Some leases also contain options to extend or terminate the lease. To the extent the Company is reasonably certain to exercise these options, they have been considered in the calculation of the right-of-use ("ROU") assets and lease liabilities. Under current lease agreements, there are no residual value guarantees or restrictive lease covenants. In calculating the ROU assets and lease liabilities, several assumptions and judgments were made by the Company, including whether a contract is or contains a lease under the applicable definition, and the determination of the discount rate, which is assumed to be the incremental borrowing rate. The incremental borrowing rate is derived from information available to the Company at the lease commencement date based on lease length and location.

The components of lease expense recognized in the accompanying Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2023 and July 1, 2022 were as follows:


	Three months ended				Nine months ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
Lease Cost
Operating lease costs	$	2,541	$	2,212	$	7,480	$	6,430
Short-term lease costs	611		542		1,738		1,501
Variable lease costs	43		43		128		131
Total lease cost	$	3,195	$	2,797	$	9,346	$	8,062

Included in the amounts in the table above was rent expense to related parties of $314 and $942 for the three and nine months ended June 30, 2023, respectively, and $314 and $895 for the three and nine months ended July 1, 2022, respectively.

As of June 30, 2023, the Company did not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor. While the Company extended or renewed various existing leases during the quarter, there were no significant new leases entered into during the quarter ended June 30, 2023. As of June 30, 2023, the Company did not have any significant operating lease commitments that have not yet commenced. Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:


	Nine months ended
	June 30, 2023			July 1, 2022
Operating leases:

Operating lease ROU assets	$	53,104		$	50,284

Current operating lease liabilities	6,985			6,348
Non-current operating lease liabilities	47,691			45,111
Total operating lease liabilities	$	54,676		$	51,459

Weighted average remaining lease term (in years)	11.93			12.10

Weighted average discount rate	3.18		%	3.11		%

Cash paid for amounts included in the measurement of lease liabilities	$	6,611		$	5,674

Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at June 30, 2023 were as follows:


Year	Related parties included in total		Total
Remainder of 2023	$	310	$	2,364
2024	1,270		8,606
2025	1,308		7,986
2026	1,348		6,196
2027	226		5,888
Thereafter	—		36,292
Total undiscounted lease payments	4,462		67,332
Less: Imputed interest	(119)		(12,656)
Total net lease liability	$	4,343	$	54,676