Note 7 - Leases

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 7. Leases: 

As a lessee, the company leases offices, labs, and manufacturing facilities, as well as vehicles, copiers, and other equipment. The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on July 1, 2019. 

The Company recognizes operating lease expense on a straight-line basis over the lease term. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. During fiscal year 2020, the Company recognized $3.4 million in variable lease expense in the Consolidated Statements of Earnings and Comprehensive Income.  During fiscal year 2020, the Company also recognized $13.0 million relating to fixed lease expense in the Consolidated Statements of Earnings and Comprehensive Income. 

The following table summarizes the balance sheet classification of the Company’s operating leases, amounts of right of use assets and lease liabilities, the weighted average remaining lease term, and the weighted average discount rate for the Company’s operating leases (asset and liability amounts are in thousands):

	Balance Sheet Classification	As of: June 30, 2020
Operating leases:
Operating lease right of use assets	Right of Use Asset	$	71,465
Current operating lease liabilities	Operating lease liabilities current	$	9,535
Noncurrent operating lease liabilities	Operating lease liabilities		67,248
Total operating lease liabilities		$	76,783
Weighted average remaining lease term (in years):			8.72
Weighted average discount rate:			4.40	%

The following table summarizes the cash paid for amounts included in the measurement of operating lease liabilities and right of use assets obtained in exchange for new operating lease liabilities for the year ended  June 30, 2020 (in thousands):

	For the year ended June 30, 2020
Cash amounts paid on operating lease liabilities(1)	$	12,763
Right of use assets obtained in exchange for lease liabilities		1,758

(1) Total cash paid for the Company's operating leases during the year ended June 30, 2020 include cash amounts paid on operating lease liabilities and variable lease expenses. Cash flow impacts from right of use assets and lease liabilities are presented net on the cash flow statement in changes in other operating activity.  

The following table summarizes payments by date for the Company’s operating leases, which is then reconciled to our total lease obligation (in thousands):

	June 30, 2020 Operating Leases
2021	$	12,590
2022		12,113
2023		11,296
2024		10,317
2025		9,388
Thereafter		37,316
Total	$	93,020
Less: Amounts representing interest		16,237
Total lease obligations		76,783

Certain leases include one or more options to renew, with terms that extend the lease term up to five years. The Company includes option to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, the Company is not reasonably certain to exercise such options.

Disclosures related to periods prior to adoption of new lease standard:

At June 30, 2019, aggregate net minimum rental commitments under non-cancelable leases having an initial or remaining term of more than one year are payable as follows (in thousands):

	Operating Leases
2020	$	13,707
2021		13,469
2022		13,154
2023		12,716
2024		11,392
Thereafter		51,895
Total	$	116,333

Total rent expense was approximately $12.9 million, $10.8 million, and $9.8 million for the years ended June 30, 2019, 2018, and 2017, respectively.