LEASES

6 Months Ended

Mar. 31, 2026

12. LEASES

The Company determines at lease inception whether an arrangement that provides control over the use of an asset is a lease. The Company recognizes at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. The Company has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of the Company’s leases include options to extend the term of the lease for up to 20 years. When it is reasonably certain that the Company will exercise the option, Management includes the impact of the option in the lease term for purposes of determining total future lease payments. As most of the Company’s lease agreements do not explicitly state the discount rate implicit in the lease, Management uses the Company’s incremental borrowing rate on the commencement date to calculate the present value of future payments based on the tenor of each arrangement.

The Company’s leases for real estate commonly include escalating payments. These variable lease payments are included in the calculation of the ROU asset and lease liability. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease.

In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. Non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred.

The Company’s leases are for office space, manufacturing facilities, and machinery and equipment.

The components of lease costs are shown below:


		Three Months Ended			Three Months Ended
		March 31,			March 31,
(Dollars in thousands)		2026			2025
Finance lease cost
Amortization of right-of-use assets		$	372			372
Interest on lease liabilities			188			202
Operating lease cost			2,204			1,731
Total lease costs		$	2,764			2,305


		Six Months Ended			Six Months Ended
		March 31,			March 31,
(Dollars in thousands)		2026			2025
Finance lease cost
Amortization of right-of-use assets		$	744			744
Interest on lease liabilities			379			408
Operating lease cost			4,432			3,461
Total lease costs		$	5,555			4,613

Additional information related to leases are shown below:


		Three Months Ended			Three Months Ended
		March 31,			March 31,
(Dollars in thousands)		2026			2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		$	2,121			1,668
Operating cash flows from finance leases		$	188			202
Financing cash flows from finance leases		$	386			355
Right-of-use assets obtained in exchange for operating lease liabilities		$	4,144			1,040


		Six Months Ended			Six Months Ended
		March 31,			March 31,
(Dollars in thousands)		2026			2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		$	4,117			3,313
Operating cash flows from finance leases		$	379			408
Financing cash flows from finance leases		$	767			706
Right-of-use assets obtained in exchange for operating lease liabilities		$	4,609			3,972


		March 31,		March 31,
		2026		2025
Weighted-average remaining lease term
Operating leases		9.1	years	10.2	years
Finance leases		9.3	years	10.0	years
Weighted-average discount rate
Operating leases		4.85	%	4.68	%
Finance leases		4.77	%	4.72	%

The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on our condensed Consolidated Balance Sheet on March 31, 2026:


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2026 (excluding the six months ended March 31, 2026)	$	4,240	1,150
2027		8,306	2,357
2028		8,132	2,417
2029		6,647	2,478
2030 and thereafter		37,651	11,575
Total minimum lease payments		64,976	19,977
Less: amounts representing interest		13,092	4,191
Present value of net minimum lease payments	$	51,884	15,786
Less: current portion of lease obligations		6,177	1,616
Non-current portion of lease obligations		45,707	14,170

ROU assets	$	48,977	11,450

Operating lease liabilities are included in the condensed Consolidated Balance Sheet in accrued other expenses (current portion) and as a caption on the Consolidated Balance Sheet (long-term portion). Finance lease liabilities are included on the Consolidated Balance Sheet in accrued other expenses (current portion) and other liabilities (long-term portion). Operating lease ROU assets are included as a caption on the Consolidated Balance Sheet and finance lease ROU assets are included in property, plant and equipment on the Consolidated Balance sheet.