Note 15 - Leases

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE 15 - LEASES

The Company leases certain manufacturing facilities along with a small office space, a company vehicle, several forklifts, several small tooling items, and various items of office equipment. All but one of the Company’s leases are operating leases. Leases have a remaining term of one to five years some of which have an option to renew. The Company does not assume renewals in determining the lease term unless the renewals are deemed reasonably certain. The lease agreements do not contain any material residual guarantees or material variable lease payments.

The Company has periodically entered into short-term operating leases with an initial term of twelve months or less. The Company elected not to record these leases on the balance sheet. For the three months ended September 30, 2020 and 2019, the rent expense for these leases is immaterial.

The Company has certain leases that contain lease and non-lease components and has elected to utilize the practical expedient to account for these components together as a single lease component.

Lease expense is recognized on a straight-line basis over the lease term. The Company used its incremental borrowing rate when determining the present value of lease payments. The adoption of the new lease standard resulted in the recognition of right-of-use assets (ROU assets) of $10.4 million and lease liabilities of $10.8 million which includes the impact of existing deferred rents and tenant improvement allowances on the consolidated balance sheets as of July 1, 2019 for the Company’s real estate leases. The adoption of the new standard resulted in no material impact to the consolidated statements of operations or consolidated statements of cash flow.

	Three months ended		Three months ended
(In thousands)	September 30, 2020		September 30, 2019
Operating lease cost	$	573	$	587
Financing lease cost:
Amortization of right of use assets		73		-
Interest on lease liabilities		24		-
Variable lease cost		1		-
Total lease cost	$	671	$	587

Supplemental Cash Flow Information:
	Three months ended		Three months ended
(In thousands)	September 30, 2020		September 30, 2019
Cash flows from operating leases
Fixed payments - operating cash flows	$	570	$	573
Liability reduction - operating cash flows	$	461	$	443
Cash flows from finance leases
Interest - operating cash flows	$	24	$	-
Repayments of principal portion - financing cash flows	$	58	$	-

Operating Leases:	At September 30, 2020			At June 30, 2020
Total operating right-of-use assets	$	8,195		$	8,663
Accrued expenses (Current liabilities)	$	292		$	376
Long-term operating lease liability		8,640			9,021
Total operating lease liabilities	$	8,932		$	9,397
Weighted Average remaining Lease Term (in years)		4.36			4.59
Weighted Average Discount Rate		4.85	%		4.85	%

Finance Leases:	At September 30, 2020			At June 30, 2020
Buildings under finance leases	$	2,033		$	2,033
Accumulated depreciation		(121	)		(48	)
Total finance lease assets, net	$	1,912		$	1,985
Accrued expenses (Current liabilities)	$	242		$	239
Long-term finance lease liability		1,694			1,755
Total finance lease liabilities	$	1,936		$	1,994
Weighted Average remaining Lease Term (in years)		6.58			6.83
Weighted Average Discount Rate		4.86	%		4.86	%

Maturities of Lease Liability:	Operating Lease			Finance Lease
	Liabilities			Liabilities
2021	$	1,864		$	270
2022		2,293			329
2023		2,241			329
2024		1,924			335
2025		1,345			362
Thereafter		360			664
Total lease payments		10,027			2,289
Less: Interest		(1,095	)		(353	)
Present Value of Lease Liabilities	$	8,932		$	1,936