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Note 9 - Leases
12 Months Ended
Oct. 31, 2023
Notes to Financial Statements  
Operating and Finance Leases [Text Block]

Note 9. Leases

 

General

 

Lease expense consisted of the following:

 

 

Classification on the Consolidated Statement of Operations

 

Year Ended October 31,

  

Year Ended October 31,

 

(in thousands)

  

2023

  

2022

 

Operating lease expense

General and administrative expenses

 $6,522  $5,002 

Short-term and variable lease expense

General and administrative expenses  686   975 

Finance lease expense:

         

Amortization of right-of-use assets

General and administrative expenses  22   22 

Interest on lease liability

Interest expense, net

  9   13 

Total finance lease expense

 $30   35 

Sublease income

General and administrative expenses  (85)  (106)

Total lease expense

 $7,153  $5,906 

 

Supplemental consolidated balance sheet information and other information related to leases:

 

(in thousands)

  

October 31,

  

October 31,

 

Leases

Classification on the Consolidated Balance Sheet

 

2023

  

2022

 

Assets:

         

Operating lease assets

Right-of-use operating lease assets

 $24,815  $24,833 

Finance lease assets

Property, plant and equipment, net

  680   702 

Total leased assets

  25,495   25,535 

Current liabilities:

         

Operating

Operating lease obligations, current portion

 $4,739  $4,001 

Finance

Finance lease obligations, current portion

  125   109 

Noncurrent liabilities:

         

Operating

Operating lease obligations, non-current

  20,458   20,984 

Finance

Finance lease obligations, non-current

  50   169 

Total leased liabilities

 $25,372  $25,263 
          

Weighted-average remaining lease term (years)

         

Operating leases

  6   7 

Finance leases

  2   3 

Weighted-average discount rate

         

Operating leases

  7.1%  6.0%

Finance leases

  3.8%  3.7%

 

Supplemental consolidated cash flow statement information related to leases:

 

(in thousands)

 

2023

  

2022

 

Cash paid for amounts included in the measurement of lease liabilities:

        

Operating cash flows from operating leases

 $5,278  $4,798 

Financing cash flows from finance leases

  109   115 

 

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease and finance lease liabilities recorded on the Company’s consolidated balance sheet as of October 31, 2023:

 

  

Future Payments

 

(in thousands)

 

Operating Leases

  

Finance Leases

 

2024

 $6,267  $120 

2025

  5,543   61 

2026

  4,505   - 

2027

  4,001   - 

2028

  3,387   - 

Thereafter

  7,913   - 

Total lease payments

 $31,617  $181 

Less: Interest

  (6,420)  (6)

Total lease payments

 $25,197  $175 

Less: Current portion

  (4,739)  (125)

Long-term portion

 $20,458  $50 

 

As of October 31, 2023, we had no material operating or finance leases that had not yet commenced.

 

Related Party Leases

 

The Company has two related party leases. Eco-Pan leases its facility in Pacific, Washington from an investor group in which Bruce Young, the Company’s Chief Executive Officer, holds an approximately 25% interest. Camfaud leases its facility in Essex, England from a trust the trustees of which include Tony Faud, the Company’s Managing Director — U.K., and members of his family.

 

The following is supplemental consolidated balance sheet information and other information related to related party leases:

 

(in thousands)

  

October 31,

  

October 31,

 

Leases

Classification on the Consolidated Balance Sheet

 

2023

  

2022

 

Assets:

         

Operating lease assets

Right-of-use operating lease assets

 $2,972  $1,299 

Current liabilities:

         

Operating

Operating lease obligations, current portion

 $284  $132 

Noncurrent liabilities:

         

Operating

Operating lease obligations, non-current

  2,669   1,174 

Total leased liabilities

 $2,953  $1,305 

 

For the years ended October 31, 2023 and 2022, $0.6 million and $0.2 million respectively were included in cost of operations on the consolidated statement of operations related to related party leases.