Note 13 - Leases

9 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Lessee, Leases [Text Block]

NOTE 13 - LEASES

The Company leases certain manufacturing facilities along with a small office space, several forklifts, several small tooling items, and various items of office equipment. The Company also acquired buildings, machinery, and forklift leases with the acquisition of JSI, as well as one sublease. All but two of the Company’s leases are operating leases. Leases have a remaining term of one to seven 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. For the three and nine months ended March 31, 2023, and 2022, 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.

	Three Months Ended						Nine Months Ended
	March 31						March 31
(In thousands)	2023			2022			2023			2022
Operating lease cost	$	884		$	868		$	2,661		$	2,617
Financing lease cost:
Amortization of right of use assets		74			74			221			221
Interest on lease liabilities		16			19			51			61
Variable lease cost		22			22			65			65
Sublease income		(116	)		(94	)		(348	)		(283	)
Total lease cost	$	880		$	889		$	2,650		$	2,681

Supplemental Cash Flow Information:
	Nine Months Ended
	March 31
(In thousands)	2023		2022
Cash flows from operating leases
Fixed payments - operating cash flows	$	2,754	$	2,669
Liability reduction - operating cash flows	$	2,451	$	2,271
Cash flows from finance leases
Interest - operating cash flows	$	51	$	61
Repayments of principal portion - financing cash flows	$	192	$	196

Operating Leases:	March 31,			June 30,
	2023			2022
Total operating right-of-use assets	$	6,770		$	8,664
Accrued expenses (Current liabilities)	$	1,290		$	1,274
Long-term operating lease liability		6,115			8,240
Total operating lease liabilities	$	7,405		$	9,514
Weighted Average remaining Lease Term (in years)		2.52			3.05
Weighted Average Discount Rate		4.82	%		4.81	%

Finance Leases:	March 31,			June 30,
	2023			2022
Buildings under finance leases	$	2,033		$	2,033
Equipment under finance leases		30			11
Accumulated depreciation		(867	)		(634	)
Total finance lease assets, net	$	1,196		$	1,410
Accrued expenses (Current liabilities)	$	325		$	275
Long-term finance lease liability		1,036			1,246
Total finance lease liabilities	$	1,361		$	1,521
Weighted Average remaining Lease Term (in years)		4.06			4.80
Weighted Average Discount Rate		4.86	%		4.86	%

	Operating
	Lease			Finance Lease			Operating			Net Lease
Maturities of Lease Liability:	Liabilities			Liabilities			Subleases			Commitments
2023	$	1,235		$	182		$	(94	)	$	1,323
2024		3,399			337			(377	)		3,359
2025		2,253			362			(31	)		2,584
2026		952			362						1,314
2027		323			303						626
Thereafter		4									4
Total lease payments	$	8,166		$	1,546		$	(502	)	$	9,210
Less: Interest		(761	)		(185	)					(946	)
Present Value of Lease Liabilities	$	7,405		$	1,361					$	8,264