Note 10 - Leases and Purchase Commitments

12 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE 10 — LEASES AND PURCHASE COMMITMENTS

Purchase commitments of the Company totaled $50.0 million as of June 30, 2023.

The Company leases certain manufacturing facilities along with a small office space, several forklifts, several small tooling items, and various items of office equipment. 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. The rent expense for these leases was immaterial for fiscal years 2023 and 2022.

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.

(In thousands)	2023		2022
Operating lease cost	$	3,551	$	3,483
Financing lease cost:
Amortization of right of use assets		295		295
Interest on lease liabilities		67		80
Variable lease cost		87		87
Total lease cost	$	4,000	$	3,945

Supplemental Cash Flow Information
(in thousands)	2023		2022
Cash flows from operating leases
Fixed payments - operating lease cash flows	$	3,704	$	3,576
Liability reduction - operating cash flows	$	3,319	$	3,064
Cash flows from finance leases
Interest - operating cash flows	$	67	$	80
Repayments of principal portion - financing cash flows	$	281	$	268

Operating Leases:	June 30, 2023			June 30, 2022
Total operating right-of-use assets	$	8,921		$	8,664
Accrued expenses (Current liabilities)	$	3,566		$	3,738
Long-term operating lease liability		5,954			5,776
Total operating lease liabilities	$	9,520		$	9,514
Weighted Average remaining Lease Term (in years)		3.31			3.05
Weighted Average Discount Rate		5.44	%		4.81	%

Finance Leases:	June 30, 2023			June 30, 2022
Buldings under finance leases	$	2,033		$	2,033
Equipment under finance leases		34			11
Accumulated depreciation		(929	)		(634	)
Total finance lease assets, net	$	1,138		$	1,410
Accured expenses (Current liabilities)	$	284			275
Long-term finance lease liability		960			1,246
Total finance lease liabilities	$	1,244		$	1,521
Weighted Average remaining Lease Term (in years)		3.83			4.80
Weighted Average Discount Rate		4.86	%		4.86	%

Maturities of Lease Liability:
	Operating Lease Liabilities Liabilities			Finance Lease Liabilities Liabilities			Operating Subleases			Net Lease Commitments Commitments
2024		3,566			337			(377	)		3,526
2025		3,145			362			(31	)		3,476
2026		1,860			362			-			2,222
2027		1,249			302			-			1,551
2028		632			-			-			632
Thereafter		2			-			-			2
Total lease payments	$	10,454		$	1,363		$	(408	)	$	11,409
Less: Interest		(934	)		(119	)					(1,053	)
Present Value of Lease Liabilities	$	9,520		$	1,244					$	10,356