Note K - Leases

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 9 years. As of September 30, 2023, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date.

ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information is as follows:

	Third Quarter Ended				Three Quarters Ended
All Amounts in Thousands	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Lease Expense
Operating Lease Cost	$	388	$	393	$	1,137	$	1,073
Short-term Lease Cost		388		658		1,611		1,882
Variable Lease Cost		117		81		415		393
Total Operating Lease Cost	$	893	$	1,132	$	3,163	$	3,348
Operating Lease – Operating Cash Flows	$	266	$	100	$	759	$	712
New ROU Assets – Operating Leases	$	242	$	30	$	325	$	7,773

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	Three Quarters Ended
All Amounts in Thousands	September 30, 2023			October 1, 2022
Weighted Average Remaining Lease Term – Operating Leases (in years)		8.29			9.29
Weighted Average Discount Rate – Operating Leases		5.21	%		5.00	%

Future minimum lease payments under non-cancellable leases as of September 30, 2023 were as follows:

All Amounts in Thousands
Year 1	$	381
Year 2		1,480
Year 3		1,445
Year 4		1,401
Year 5		1,314
Thereafter		5,331
Total future minimum lease payments		11,352
Less imputed interest		(2,152	)
Total	$	9,200
Reported as of September 30, 2023
Current operating lease liabilities		1,037
Long-term operating lease liabilities		8,163
Total	$	9,200