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LEASES
 12 Months Ended
Oct. 31, 2022
LEASES [Abstract]  
LEASES

NOTE 8 - LEASES


In February 2021, we entered into a five-year $7.2 million finance lease for a high-end inspection tool. Monthly payments on the lease, which commenced in February 2021, are $0.1 million per month. Upon the payment of the fiftieth monthly payment and prior to payment of the fifty-first monthly payment, we may exercise an early buyout option to purchase the tool for $2.4 million. If we do not exercise the early buyout option, then at the end of the five-year lease term, the lease shall continue to renew on a month-to-month basis at the same rental terms; at our option, after the original term or any renewal periods, we may return the tool, elect to extend the lease, or purchase the tool at its fair market value. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.08%.



In December 2020, we entered into a five-year $35.5 million finance lease for a high-end lithography tool. Monthly payments on the lease, which commenced in January 2021, increased from $0.04 million during the first three months to $0.6 million for the following nine months, followed by forty-eight monthly payments of $0.5 million. As of the due date of the forty-eighth monthly payment, we may exercise an early buyout option to purchase the tool for $14.1 million. If we do not exercise the early buyout option, then at the end of the five-year lease term, at our option, we may return the tool, elect to extend the lease term for a period and a lease payment to be agreed with lessor at the time, or purchase the tool for its then-fair market value as determined by the lessor. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.58%. The lease agreement incorporates the covenants included in our Corporate Credit Agreement, which are detailed in Note 6, and includes a cross-default provision for any agreement or instrument with an outstanding, committed balance greater than $5.0 million in which we are the indebted party.



The following table provides information on operating and finance leases included in our consolidated balance sheets.


Classification
  
October 31,
2022
    
October 31,
2021
  
             
ROU Assets – Operating Leases
            
Other assets
  
$
3,341
    
$
5,581
  
                 
ROU Assets – Finance Leases
                
Property, plant and equipment, net
  
$
37,976
    
$
40,827
  
                 
Lease Liabilities – Operating Leases
                
Accrued liabilities
  
$
1,354
    
$
2,273
  
Other liabilities
    
1,928
      
3,246
  
   
$
3,282
    
$
5,519
  
                 
Lease Liabilities – Finance Leases
                
Current portion of long-term debt
  
$
6,512
    
$
7,289
  
Long-term debt
    
24,571
      
31,083
  
   
$
31,083
    
$
38,372
  



The following table presents future lease payments under noncancelable operating and finance leases as of October 31, 2022. Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.


Fiscal Year
  
Operating Leases
    
Finance Leases
  
2023
  
$
1,398
    
$
6,938
  
2024
    
913
      
6,938
  
2025
    
614
      
18,013
  
2026
    
346
      
-
  
2027
    
132
      
-
  
Total lease payments
    
3,403
      
31,889
  
Imputed interest
    
(121
)
    
(806
)
Lease liabilities
  
$
3,282
    
$
31,083
  


The following table presents lease costs for 2022, 2021, and 2020.


   
Year Ended
  
   
October 31,
2022
    
October 31,
2021
    
October 31,
2020
  
Operating lease costs
  
$
2,253
    
$
2,904
     $
 3,076  
Short-term lease costs
  
$
469
    
$
232
     $ 359  
Variable lease costs
  
$
603
    
$
498
     $ 378  
Interest on finance lease
  
$
522
    
$
510
     $ -  
Amortization of ROU assets
  
$
2,917
    
$
1,867
     $ -  



The following table presents statistical information related to our operating and finance leases. The information presented is as of the balance sheet dates.


   
October 31, 2022
  
October 31, 2021
  
Classification
  
Weighted-average
remaining lease
term (in years)
  
Weighted-average
discount rate
  
Weighted-average
remaining lease
term (in years)
  
Weighted-average
discount rate
  
Operating leases
      
3.1
      
2.3
%
    
3.5
      
2.4
%
Finance leases
      
2.2
      
1.5
%
    
3.3
      
1.5
%



The following table presents the effects of leases on our 2022, 2021, and 2020 consolidated statements of cash flows, and provides leases-related non-cash information for those years.


   
Year Ended
  
   
October 31,
2022
    
October 31,
2021
    
October 31,
2020
  
Operating cash flows used for operating leases
  
$
2,259
    
$
2,442
     $
3,584  
Operating cash flows used for finance leases
  
$
566
    
$
464
     $ -  
Financing cash flows used for finance leases
  
$
7,289
    
$
4,323
     $ -  
ROU assets obtained in exchange for operating lease obligations
  
$
513
    
$
457
     $ 2,681  
ROU assets obtained in exchange for finance lease obligations
  
$
-
    
$
42,672
     $ -