v3.22.4
Leases
 3 Months Ended
Dec. 24, 2022
Leases [Abstract]  
Leases Leases
In connection with the adoption of ASUs 2016-02 and 2018-11 (see Note 2, Summary of Significant Accounting Policies), the Company updated its policy for recognizing leases under ASC Topic 842. A summary of the updated policy is included in Note 2, Summary of Significant Accounting Policies. Prior to September 25, 2022, the Company accounted for leases under ASC Topic 840, Leases.
Lease Portfolio
The Company leases office space in Wilmington, MA, Douglas, GA, and Montreal, QC through operating lease arrangements. The Company has no finance lease agreements. The operating lease arrangements expire at various dates through June 2026.
Impact of Adoption
The Company utilized the cumulative effect adjustment method of adoption and, accordingly, recorded ROU assets and lease liabilities of $5.5 million and $6.4 million, respectively, on the balance sheet at September 25, 2022. The Company elected the following practical expedients in accordance with ASC Topic 842:
•Reassessment elections - The Company elected the package of practical expedients, and did not reassess whether any existing contracts are or contain a lease, provided a lease analysis was conducted under ASC Topic 840. To the extent leases were identified under ASC Topic 840, the Company did not reassess the classification of those leases. Additionally, to the extent initial direct costs were capitalized under ASC Topic 840 and are not amortized as a result of the implementation of ASC Topic 842, they were not reassessed.
•Short-term lease election - ASC Topic 842 allows lessees an option to not recognize ROU assets and lease liabilities arising from short-term leases. A short-term lease is defined as a lease with an initial term of 12 months or less. The Company elected to not recognize short-term leases as ROU assets and lease liabilities on the balance sheet. All short-term leases which are not included on the Company’s balance sheet will be recognized within lease expense. Leases that have an initial term of 12 months or less with an option for renewal will need to be assessed in order to determine if the lease qualifies for the short-term lease exception. If the option is reasonably certain to be exercised, the lease does not qualify as a short-term lease.
The following table presents the balance sheet location of the Company’s operating leases (in thousands):
December 24, 2022
ROU assets:
Other long-term assets$5,108 
Lease Liabilities:
Accrued expenses and other current liabilities$1,917 
Other long-term liabilities4,057 
Total lease liabilities$5,974 
The following table presents maturities of the Company’s operating lease liabilities as of December 24, 2022, presented under ASC Topic 842 (in thousands):
December 24, 2022
Remaining fiscal year 2023$1,718 
Fiscal year 20242,333 
Fiscal year 20252,035 
Fiscal year 2026555 
Fiscal year 2027 and thereafter— 
Total future minimum payments$6,641 
Less: Implied interest(667)
Total lease liabilities$5,974 
The following table presents future minimum rental payments under the Company’s noncancellable operating lease agreements as of September 24, 2022, presented under ASC Topic 840 (in thousands):
September 24, 2022
Fiscal year 2023$2,301 
Fiscal year 20242,335 
Fiscal year 20252,037 
Fiscal year 2026557 
Fiscal year 2027 and thereafter— 
Total future minimum payments$7,230 
As of December 24, 2022, the weighted-average remaining lease term and the weighted-average incremental borrowing rate of the Company’s operating leases was approximately 3.0 years and 7.5%, respectively. Operating cash flows for amounts included in the measurement of the Company’s operating lease liabilities were $0.5 million for the three months ended December 24, 2022.