Note 13 - Commitments

12 Months Ended

Oct. 31, 2024

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 13 – Commitments

We adopted ASU 2016-02 on November 1, 2019, and elected the practical expedient modified retrospective method whereby the lease qualification and classification was carried over from the accounting for leases under ASC 840. The lease contracts for the corporate headquarters, RF Connector division manufacturing facilities, Cables Unlimited, Rel-Tech, and C Enterprises commenced prior to the effective date of November 1, 2019, and were determined to be operating leases. All other new contracts have been assessed for the existence of a lease and for the proper classification into operating leases. The rate implicit in the leases was undeterminable and, therefore, the discount rate used in all lease contracts is our incremental borrowing rate.

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments of $16,000 to $18,000 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the years ended October 31, 2024 and 2023 were as follows (in thousands):

	Fiscal Year Ended		Fiscal Year Ended
	October 31, 2024		October 31, 2023
Operating lease cost	$	2,956	$	2,872

Other information related to leases was as follows (in thousands):

	October 31, 2024			October 31, 2023
Supplemental Cash Flows Information
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	1,078		$	6,479
Weighted Average Remaining Lease Term
Operating leases (in months)		100.92			114.26
Weighted Average Discount Rate
Operating leases		6.99	%		6.96	%

Future minimum lease payments under non-cancellable leases as of October 31, 2024 were as follows (in thousands):

Year ended October 31,	Operating Leases
2025	$	3,227
2026		3,228
2027		3,169
2028		2,997
Thereafter		14,878
Total future minimum lease payments		27,499
Less imputed interest		(6,971	)
Total	$	20,528

Reported as of October 31, 2024	Operating Leases
Current portion of operating lease liabilities	$	1,848
Operating lease liabilities		18,680
Total	$	20,528

As of October 31, 2024, operating lease right-of-use asset was $15.3 million and operating lease liability totaled $20.5 million, of which $1.8 million is classified as current. There were no finance leases as of October 31, 2024 or 2023.