Note 15 - Leases

3 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

N

OTE

15

- LEASES

The Company leases

two

of its manufacturing facilities along with a small office space, a company vehicle, several forklifts, several small tooling items, and various items of office equipment. All of the Company’s leases are operating leases and are included in other long-term assets with the corresponding liability in other long-term liabilities. Leases have a remaining term of

1

to

5

years some of which have an option to renew. The Company does

not

assume renewals in determining the lease term unless the renewals are deemed reasonably certain. The lease agreements do

not

contain any material residual guarantees or material variable lease payments.

The Company has periodically entered into short-term operating leases with an initial term of

twelve

months or less. These leases are

not

recorded on the balance sheet. For the

three

months ended

September 30, 2019,

the rent expense for these leases is immaterial.

The Company has certain leases that contain lease and non-lease components and has elected to utilize the practical expedient to account for these components together as a single lease component.

Lease expense is recognized on a straight-line basis over the lease term. The Company used its incremental borrowing rate when determining the present value of lease payments. The adoption of the new lease standard resulted in the recognition of right-of-use assets (ROU assets) of

$10.4

million and lease liabilities of

10.8

million which includes the impact of existing deferred rents and tenant improvement allowances on the consolidated balance sheets as of

July 1, 2019

for the Company’s real estate leases. The adoption of the new standard resulted in

no

material impact to the consolidated statements of operations or consolidated statements of cash flow.

	Three Months Ended September 30, 2019
	(in thousands)
Operating lease cost		587

Supplemental Cash Flow Information:	Three Months Ended September 30, 2019
	(in thousands)
Operating cash flows from operating leases
Fixed payments		573
Liability reduction		443

	At September 30, 2019
Operating Leases:
Total operating right-of-use asset (Other long-term assets)		9,953
Accrued Liabiltities (Current liabilities)		324
Long-term operating lease liability (Other long-term liabilties)		10,368
		10,692
Weighted Average Remaining Lease Term (in years)		5.3
Weighted Average Discount Rate		4.85	%

Maturities of Lease Liability:
2020	1,846
2021	2,303
2022	2,279
2023	2,244
2024	1,918
therefter	1,680
Total lease payments	12,270
Less: Interest	(1,578	)
Present Value of Lease Liabilities	10,692