Note 14 - Leases

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

(14) Leases

The Company has operating and finance leases for offices, manufacturing plants, vehicles and certain office and manufacturing equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the right of use (“ROU”) assets or lease liabilities. These are expensed as incurred and recorded as variable lease expense. The Company determines if an arrangement is a lease at the inception of a contract. Operating and finance lease ROU assets and operating and finance lease liabilities are stated separately in the condensed consolidated balance sheet.

ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The Company's lease term includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. ROU assets are also adjusted for any deferred or accrued rent. As the Company's leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

ROU assets and lease liabilities consist of the following (in thousands):

	December 31,
	2023		2022
Operating lease ROU assets	$	13,437	$	12,942
Finance lease ROU assets		151		211
Total ROU assets	$	13,588	$	13,153
Operating lease liabilities - current	$	3,162	$	2,458
Finance lease liabilities - current		60		59
Total lease liabilities - current	$	3,222	$	2,517
Operating lease liabilities - long-term	$	10,719	$	10,695
Finance lease liabilities - long-term		96		156
Total lease liabilities - long-term	$	10,815	$	10,851

	Year Ended
	December 31,
	($ in thousands)
	2023			2022
Lease Cost:
Finance lease cost:
Amortization of right of use assets	$	60		$	60
Interest on lease liabilities		4			5
Operating lease cost		3,132			2,621
Variable lease cost		324			304
Short-term lease cost		68			57
Total lease cost	$	3,588		$	3,047
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	2,979		$	2,452
Financing cash flows from finance leases		63			63
ROU assets obtained in exchange for operating lease obligations		2,492			329
Weighted-average remaining lease term (years):
Finance		2.54			3.54
Operating		4.42			5.34
Weighted-average discount rate:
Finance		2.11	%		2.10	%
Operating		3.42	%		3.00	%

The aggregate future lease payments for leases as of December 31, 2023 were as follows (in thousands):

	December 31, 2023
	Operating (a)			Finance
2024	$	2,813		$	63
2025		3,137			63
2026		2,764			28
2027		2,519			6
2028		1,190			-
Thereafter		2,828			-
Total lease payments		15,251			160
Less: Interest		(1,370	)		(4	)
Present value of lease liabilities	$	13,881		$	156

(a) Future operating lease payments have not been reduced by minimum sublease rentals of approximately $1.8 million due in the future under non-cancelable subleases.

Rent expense amounted to approximately $2.9 million, $2.6 million, and $1.4 million in 2023, 2022, and 2021, respectively.