Note 14 - Commitments

12 Months Ended

Oct. 31, 2022

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 14 – Commitments

We adopted ASU 2016-02 on November 1, 2019, and elected the practical expedient modified retrospective method whereby the lease qualification and classification was carried over from the accounting for leases under ASC 840. The lease contracts for the corporate headquarters, RF Connector division manufacturing facilities, Cables Unlimited, Rel-Tech, and C Enterprises commenced prior to the effective date of November 1, 2019, and were determined to be operating leases. All other new contracts have been assessed for the existence of a lease and for the proper classification into operating leases. The rate implicit in the leases was undeterminable and, therefore, the discount rate used in all lease contracts is our incremental borrowing rate.

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ended October 31, 2022 were as follows (in thousands):

	Fiscal Year Ended
	October 31, 2022
Operating lease cost	$	1,833
Short-term lease cost		1

Other information related to leases was as follows (in thousands):

	October 31, 2022
Supplemental Cash Flows Information
ROU assets obtained in exchange for lease obligations:
Operating leases	$	13,352
Weighted Average Remaining Lease Term
Operating leases (in months)		113.72
Weighted Average Discount Rate
Operating leases		3.75	%

Future minimum lease payments under non-cancellable leases as of October 31, 2022 were as follows (in thousands):

Year ended October 31,	Operating Leases
2023	$	2,467
2024		1,991
2025		1,796
2026		1,835
Thereafter		12,306
Total future minimum lease payments		20,395
Less imputed interest		(3,483	)
Total	$	16,912

Reported as of October 31, 2022	Operating Leases
Other current liabilities	$	1,887
Operating lease liabilities		15,025
Finance lease liabilities		-
Total	$	16,912

As of October 31, 2022, operating lease ROU asset was $13.5 million and operating lease liability totaled $16.9 million, of which $1.9 million is classified as current. There were no finance leases as of October 31, 2022.