Note 12 - Operating Leases

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

12.         Operating Leases

We determine if an arrangement is a lease or service contract at inception. Where an arrangement is a lease, we determine if it is an operating lease or a finance lease.  Subsequently, if the arrangement is modified, we reevaluate our classification.  We have entered into operating leases for corporate office buildings, vehicles, and machinery and equipment.  Some of our lease agreements have renewal options, tenant improvement allowances, rent escalation clauses, and assignment and subletting clauses.  While our operating leases range from one year to ten years, some may include options to extend the lease generally between one year and six years, and some may include options to terminate the leases within one year. 

Operating lease liabilities presented on the consolidated balance sheets represents the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate, which ranges between 6.1% and 8.5% based on the terms of the lease. 

Operating lease costs for the year ended December 31, 2021, 2020 and 2019 were $1.8 million, $2.0 million and $2.1 million, respectively. Total cash paid for operating leases during the year ended December 31, 2021, 2020 and 2019 was $1.5 million, $1.5 million and $1.7 million, respectively, and is included in with cash flows from operating activities with the consolidated statement of cash flows.

Supplemental balance sheet information, as of December 31, 2021 and 2020, related to operating leases was as follows:

	December 31,
	2021			2020
Weighted-average remaining lease term (in years)	7.8			1.8
Weighted-average discount rate		7.8	%		8.2	%

Maturities of operating lease obligations were as follows (in thousands):

Fiscal Year
2022	$	994
2023		1,008
2024		918
2025		920
2026		854
Thereafter		3,004
Total minimum lease payments	$	7,698
Less: Amount of lease payments representing interest		(2,009	)
Present value of future minimum lease payments	$	5,689

During 2021 we entered into three building leases; the first with a 125-month term beginning in the first quarter of 2021; the second with a 60-month term beginning in the second month of the quarter; and the third with an 87-month term beginning in the fourth quarter of 2021. The total lease commitment for these three operating leases is approximately $7.1 million.