Note N - Lease Obligations

3 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

N. Lease Liabilities

The Company leases certain office and warehouse space, as well as production and office equipment.

The Company determines if an arrangement is a lease at contract inception. The lease term begins upon lease commencement, which is when the Company takes possession of the asset, and may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. As its lease agreements typically do not provide an implicit rate, the Company primarily uses an incremental borrowing rate based upon the information available at lease commencement. In determining the incremental borrowing rate, the Company considers its current borrowing rate, the term of the lease, and the economic environments where the lease activity is concentrated.

The following table provides a summary of leases recorded on the condensed consolidated balance sheet.

	Balance Sheet Location	September 30, 2022		June 30, 2022
Lease Assets
Operating lease right-of-use assets	Right-of-use assets operating leases	$	11,492	$	12,685
Finance lease right-of-use assets	Property, plant and equipment, net		4,626		4,805
Lease Liabilities
Operating lease liabilities	Accrued liabilities	$	2,039	$	2,127
Operating lease liabilities	Lease obligations		9,483		10,575
Finance lease liabilities	Accrued liabilities		607		576
Finance lease liabilities	Other long-term liabilities		4,236		4,440

The components of lease expense were as follows:

	For the Quarter Ended
	September 30, 2022			September 24, 2021
Finance lease cost:
Amortization of right-of-use assets	$	155		$	163
Interest on lease liabilities		64			72
Operating lease cost		711			693
Short-term lease cost		13			2
Variable lease cost		40			39
Total lease cost		983			969
Less: Sublease income		(17	)		(20	)
Net lease cost	$	966		$	949

Other information related to leases was as follows:

	For the Quarter Ended
	September 30, 2022			September 24, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	748		$	742
Operating cash flows from finance leases		201			136
Financing cash flows from finance leases		64			72
Right-of-use-assets obtained in exchange for lease obligations:
Operating leases		528			165
Finance leases		51			174
Weighted average remaining lease term (years):
Operating leases		8.8			9.6
Finance lease		11.4			11.7
Weighted average discount rate:
Operating leases		7.2	%		7.2	%
Finance leases		5.2	%		5.2	%

Approximate future minimum rental commitments under non-cancellable leases as of September 30, 2022 were as follows:

	Operating Leases			Finance Leases
2023	$	2,297		$	864
2024		2,411			834
2025		1,460			591
2026		1,317			525
2027		1,312			466
Thereafter		7,005			3,465
Total future lease payments		15,802			6,744
Less: Amount representing interest		(4,280	)		(1,901	)
Present value of future payments	$	11,522		$	4,843