Note 4 - Operating Leases

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

Note 4.  Leases

The Company leases space under non-cancelable operating leases for manufacturing facilities, research and development offices and certain storage facilities and apartments. These leases do not contain contingent rent provisions. The Company also leases certain machinery, office equipment and a vehicle. Many of its leases include both lease (e.g. fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g. common-area or other maintenance costs) which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. Several of the leases include one or more options to renew which have been assessed and either included or excluded from the calculation of the lease liability of the right of use ("ROU") asset based on management’s intentions and individual fact patterns. Several warehouses and apartments have non-cancelable lease terms of less than one-year and therefore, the Company has elected the practical expedient to exclude these short-term leases from its ROU asset and lease liabilities.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Based on the applicable lease terms and current economic environment, the Company applies a location approach for determining the incremental borrowing rate.

The Components of lease expense were as follows for the periods indicated (in thousands):

	Three months ended March 31,
	2020		2019
Operating lease expense	$	295	$	323
Financing lease expense		8		—
Short Term lease expense		21		29
Total lease expense	$	324	$	352

Maturities of lease liabilities are as follows for the future one-year periods ending March 31, (in thousands):

		Operating			Financing
2021	$	1,266		$	22
2022		1,222			22
2023		1,155			22
2024		1,099			60
2025		1,100			—
2026 and thereafter		4,795			—
Total lease payments	$	10,637		$	126
Less imputed interest		(1,821	)		(14	)
Present value	$	8,816		$	112

The weighted average remaining lease term and discount rate for operating leases were as follows for the periods indicated:

	March 31,			March 31,
	2020			2019
Weighted Average Remaining Lease Term (Years) - operating leases		8.87			9.81
Weighted Average Remaining Lease Term (Years) - financing leases		3.57			—
Weighted Average Discount Rate - operating leases		3.17	%		3.17	%
Weighted Average Discount Rate - financing leases		5.00	%		—

Supplemental cash flow information related to operating leases was as follows for the periods indicated (in thousands):

	Three months ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		318		332
Operating cash flows from financing lease		1		—
Financing cash flows from financing lease		4		—
Right-of-use assets obtained in exchange for new operating lease liabilities		261		—