Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.24.2.u1
Leases
 9 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Leases Leases
The Company leases retail stores, warehouse facilities, and office space. These assets and properties are generally leased under noncancelable agreements that expire at various future dates with many agreements containing renewal options for additional periods. The agreements, which have been classified as either operating or finance leases, generally provide for minimum rent and, in some cases, percentage rent, and require the Company to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with
each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.
The following table details the Company's right of use assets and lease liabilities as of June 30, 2024 and September 30, 2023 (in $000's):
June 30, 2024 September 30, 2023
Right of use asset - operating leases $ 59,687  $ 54,544 
Lease liabilities:
Current - operating 12,938  11,369 
Current - finance 347  359 
Long term - operating 52,009  48,156 
Long term - finance 40,950  32,942 
As of June 30, 2024, the weighted average remaining lease term for operating leases is 10.5 years. The Company's weighted average discount rate for operating leases is 9.8%. Total cash payments for operating leases for the nine months ended June 30, 2024 and 2023 were approximately $13.8 million and $8.2 million, respectively. Additionally, the Company recognized approximately $18.8 million in right of use assets and liabilities upon commencement of operating leases during the nine months ended June 30, 2024.
As of June 30, 2024, the weighted average remaining lease term for finance leases is 27.5 years. The Company's weighted average discount rate for finance leases is 11.4%. Total cash payments for finance leases for the nine months ended June 30, 2024 and 2023 were approximately $2.5 million and $1.6 million, respectively. During the nine months ended June 30, 2024, the Company recognized finance right-of-use assets and liabilities of approximately $7.9 million.
The Company records finance lease right-of-use assets as property and equipment. The balance, as of June 30, 2024 and September 30, 2023 is as follows (in $000’s):
June 30, 2024 September 30, 2023
Property and equipment, at cost $ 26,226  $ 22,526 
Accumulated depreciation $ (1,262) $ (702)
Property and equipment, net $ 24,964  $ 21,824 
Total present value of future lease payments of operating leases as of June 30, 2024 (in $000's):
Twelve months ended June 30,
2025 $ 18,189 
2026 15,833 
2027 13,216 
2028 9,862 
2029 6,206 
Thereafter 34,511 
Total 97,817 
Less implied interest (32,870)
Present value of payments $ 64,947 
Total present value of future lease payments of finance leases as of June 30, 2024 (in $000's):
Twelve months ended June 30,
2025 $ 3,898 
2026 3,932 
2027 4,011 
2028 4,123 
2029 4,251 
Thereafter 127,145 
Total 147,360 
Less implied interest (106,063)
Present value of payments $ 41,297 
In connection with the disposition of certain of Johnson’s assets and liabilities (see Note 3), during the three months ended June 30, 2024, the Company derecognized right-of-use assets in the amount of approximately $2.7 million and lease liabilities in the amount of approximately $2.7 million.
During the nine months ended June 30, 2024 and 2023, the Company recorded no impairment charges relating to any of its leases.
Leases Leases
The Company leases retail stores, warehouse facilities, and office space. These assets and properties are generally leased under noncancelable agreements that expire at various future dates with many agreements containing renewal options for additional periods. The agreements, which have been classified as either operating or finance leases, generally provide for minimum rent and, in some cases, percentage rent, and require the Company to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with
each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.
The following table details the Company's right of use assets and lease liabilities as of June 30, 2024 and September 30, 2023 (in $000's):
June 30, 2024 September 30, 2023
Right of use asset - operating leases $ 59,687  $ 54,544 
Lease liabilities:
Current - operating 12,938  11,369 
Current - finance 347  359 
Long term - operating 52,009  48,156 
Long term - finance 40,950  32,942 
As of June 30, 2024, the weighted average remaining lease term for operating leases is 10.5 years. The Company's weighted average discount rate for operating leases is 9.8%. Total cash payments for operating leases for the nine months ended June 30, 2024 and 2023 were approximately $13.8 million and $8.2 million, respectively. Additionally, the Company recognized approximately $18.8 million in right of use assets and liabilities upon commencement of operating leases during the nine months ended June 30, 2024.
As of June 30, 2024, the weighted average remaining lease term for finance leases is 27.5 years. The Company's weighted average discount rate for finance leases is 11.4%. Total cash payments for finance leases for the nine months ended June 30, 2024 and 2023 were approximately $2.5 million and $1.6 million, respectively. During the nine months ended June 30, 2024, the Company recognized finance right-of-use assets and liabilities of approximately $7.9 million.
The Company records finance lease right-of-use assets as property and equipment. The balance, as of June 30, 2024 and September 30, 2023 is as follows (in $000’s):
June 30, 2024 September 30, 2023
Property and equipment, at cost $ 26,226  $ 22,526 
Accumulated depreciation $ (1,262) $ (702)
Property and equipment, net $ 24,964  $ 21,824 
Total present value of future lease payments of operating leases as of June 30, 2024 (in $000's):
Twelve months ended June 30,
2025 $ 18,189 
2026 15,833 
2027 13,216 
2028 9,862 
2029 6,206 
Thereafter 34,511 
Total 97,817 
Less implied interest (32,870)
Present value of payments $ 64,947 
Total present value of future lease payments of finance leases as of June 30, 2024 (in $000's):
Twelve months ended June 30,
2025 $ 3,898 
2026 3,932 
2027 4,011 
2028 4,123 
2029 4,251 
Thereafter 127,145 
Total 147,360 
Less implied interest (106,063)
Present value of payments $ 41,297 
In connection with the disposition of certain of Johnson’s assets and liabilities (see Note 3), during the three months ended June 30, 2024, the Company derecognized right-of-use assets in the amount of approximately $2.7 million and lease liabilities in the amount of approximately $2.7 million.
During the nine months ended June 30, 2024 and 2023, the Company recorded no impairment charges relating to any of its leases.