Note 10 - Leases and Purchase Commitments

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE

10

— LEASES AND PURCHASE COMMITMENTS

Purchase commitments of the Company totaled

$14.3

million and

$19.7

million as of

June 30, 2020

and

June 

30,

2019,

respectively.

The Company leases certain manufacturing facilities along with a small office space, a company vehicle, several forklifts, several small tooling items and various items of office equipment. All but

one

of the Company's leases are operating. Leases have a remaining term of

one

to

five

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. The Company elected

not

to record these leases on the balance sheet. The rent expense for these leases is immaterial for fiscal

2020.

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 (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.

(In thousands)	2020
Operating lease cost	$	2,308
Financing lease cost:
Amortization of right of use assets		48
Interest on lease liabilities		16
Variable Lease Cost		6
Total lease Cost	$	2,378

Supplemental Cash Flow Information:
(In thousands)	2020
Cash flows from operating leases
Fixed payments - operating cash flows	$	2,296
Liability reduction - operating cash flows	$	1,810
Cash flows from finance leases
Interest - operating cash flows	$	16
Repayments of principal portion - financing cash flows	$	39

Operating Leases:	At June 30, 2020
Total operating right-of-use assets	$	8,663
Accrued expenses (Current liabilities)	$	376
Long-term operating lease liability		9,021
Total operating lease liabilities	$	9,397
Weighted Average remaining Lease Term (in years)		4.59
Weighted Average Discount Rate		4.85	%

Finance Leases:	At June 30, 2020
Buildings under finance leases	$	2,033
Accumulated depreciation		(48	)
Total finance lease assets, net	$	1,985
Accrued expenses (Current liabilities)	$	239
Long-term finance lease liability		1,755
Total finance lease liabilities	$	1,994
Weighted Average remaining Lease Term (in years)		6.83
Weighted Average Discount Rate		4.86	%

Maturities of Lease Liability:
	Operating Lease Liabilities			Finance Lease Liabilities
2021	$	486		$	329
2022		2,323			329
2023		2,299			329
2024		2,250			335
2025		1,923			362
Thereafter		1,704			664
Total lease payments		10,985			2,348
Less: Interest		(1,588	)		(354	)
Present Value of Lease Liabilities	$	9,397		$	1,994