Leases

3 Months Ended

Dec. 31, 2021

Note 9 – Leases

The Company leases certain equipment under

non-cancelable

operating leases. Future minimum rental payments under these leases at December 31, 2021 were immaterial.

On August 28, 2020, the Company entered into a three-year operating lease for property related to the manufacturing and warehousing of the Blaw-Knox paver product line which was acquired on October 1, 2020. The lease term is for the period beginning on September 1, 2020 through August 31, 2023. In accordance with ASU

2016-02,

the Company recorded a ROU asset totaling $970,000 and related lease liabilities at inception. On October 9, 2020, the Company entered into an operating lease for additional warehousing space for Blaw-Knox inventory. The original lease term was for one year beginning November 2020 with automatic

one-year

renewals. In accordance with ASU

2016-02,

the Company recorded a ROU asset totaling $254,000 and related lease liabilities at inception. An additional $39,000 was recorded as a ROU asset and related lease liability in October 2021 to reflect the impact of the lease renewal.

For the quarter ended December 31, 2021, operating lease costs were $101,000 and cash payments related to these operating leases were $109,000. For the quarter ended December 31, 2020, operating lease costs were $89,000 and cash payments related to these operating leases were $116,000.

Other information concerning the Company’s operating lease accounted for under ASC 842 guidelines as of December 31, 2021 and September 30, 2021, is as follows:


	December 31, 2021			September 30, 2021
Operating lease ROU asset included in other long-term assets	$	725,000		$	785,000
Current operating lease liability		417,000			393,000
Non-current operating lease liability		308,000			392,000
Weighted average remaining lease term (in years)		1.75			2.00
Weighted average discount rate used in calculating ROU asset		4.0	%		4.0	%

Future annual minimum lease payments as of December 31, 2021 are as follows:


Fiscal Year	Annual Lease Payments
2022 (nine months)	$	327,000
2023		416,000
2024		8,000

Total		751,000
Less interest		(26,000	)

Present value of lease liabilities	$	725,000