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Note E - Leases

9 Months Ended

Dec. 31, 2023

NOTE E — LEASES

The Company was assigned an operating lease associated with the real property and leasehold improvements for the Granite City, IL facility acquired from Plateplus pursuant to the transaction disclosed in Note B. The lease called for quarterly rental payments of approximately $19,000. The Company recognized an initial right-of-use (“ROU”) asset and lease liability of approximately $1.2 million during the June 30, 2022 quarter related to this lease. The Company renewed this lease in January 2024 through August 31, 2028, with extension provisions that include four additional five year terms. The ROU asset and lease liability will be updated during the quarter ending March 31, 2024. The Company’s lease of its office space in Longview, Texas is the only other operating lease included in the Company's ROU assets and lease liabilities. The lease calls for monthly rent payments of approximately $5,000 and expires on April 30, 2024. The Company’s other operating leases for items such as IT equipment and storage space are either short-term in nature or immaterial.

In October 2019, the Company acquired a new heavy-duty forklift under a 5-year finance lease arrangement with a financed amount of approximately $0.5 million and a monthly payment of approximately $9,000.

The components of expense related to leases for the three and nine months ended December 31, 2023 and 2022 are as follows (in thousands):

	*Three Months Ended*				*Nine Months Ended*
	*December 31,*				*December 31,*
	*2023*		*2022*		*2023*		*2022*
Finance lease – amortization of ROU asset	$	26	$	26	$	78	$	78
Finance lease – interest on lease liability		1		1		3		3
Operating lease expense		34		34		102		94
	$	61	$	61	$	183	$	175

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of December 31, 2023 and March 31, 2023 (in thousands):

	*December 31, 2023*		*March 31, 2023*		*Balance Sheet Classification*
Assets
Operating lease right-of-use asset	$	1,193	$	1,270	Operating lease right-of-use asset
Finance lease right-of-use asset		411		430	Property, plant & equipment
Total right-of-use assets	$	1,604	$	1,700
Liabilities
Operating lease liability, current	$	66	$	101	Accrued expenses
Finance lease liability, current		81		107	Current portion of finance lease
Operating lease liability, non-current		1,127		1,168	Other non-current liabilities
Finance lease liability, non-current		—		54	Other non-current liabilities
Total lease liabilities	$	1,274	$	1,430

As of December 31, 2023, the weighted-average remaining lease term was 19.4 years for operating leases and 0.8 years for finance leases. The weighted average discount rate was 2.6% for operating leases and 1.9% for finance leases.

Maturities of lease liabilities as of December 31, 2023 were as follows (in thousands):

	*Operating Leases*			*Finance Leases*
Fiscal 2024 (remainder of fiscal year)		34			27
Fiscal 2025		80			55
Fiscal 2026		75			—
Fiscal 2027		75			—
Fiscal 2028 and beyond		1,237			—
Total undiscounted lease payments	$	1,501		$	82
Less: imputed interest		(308	)		(1	)
Present value of lease liability	$	1,193		$	81