Note 9 - Leases

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

9. Leases:

The Company leases warehouses and office space, industrial equipment, office equipment, vehicles, industrial gas tanks and forklifts from other parties and leases land and warehouse space to third parties. The Company determines if a contract contains a lease when the contract conveys the right to control the use of identified assets for a period of time in exchange for consideration. Upon identification and commencement of a lease, the Company establishes a right-of-use (ROU) asset and a lease liability. Operating leases are included in ROU assets, current portion of lease liabilities, and lease liabilities on the accompanying Consolidated Balance Sheets. Financing leases are included in property, plant and equipment, other accrued liabilities and other long-term liabilities.

The Company has remaining lease terms ranging from one year to 16 years, some of these include options to renew the lease for up to five years. The total lease term is determined by considering the initial term per the lease agreement, which is adjusted to include any renewal options that the Company is reasonably certain to exercise as well as any period that the Company has control over the space before the stated initial term of the agreement. If the Company determines a reasonable certainty of exercising termination or early buyout options, then the lease terms are adjusted to account for these facts.

The Company leases one warehouse from a related party. The Company’s Executive Chairman of the Board owns 50% of an entity that owns one of the Cleveland warehouses and leases it to the Company at a fair market value annual rental of $0.2 million. The lease expires on December 31, 2023 with three five-year renewal options.

ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not 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 future payments. Lease expense is recognized on a straight-line basis over the lease term.

The components of lease expense were as follows for the years ended December 31, 2022, 2021 and 2020:

(in thousands)	2022		2021		2020
Operating lease cost	$	7,446	$	6,952	$	7,089
Finance lease cost
Amortization		720		721		254
Interest on lease liabilities		67		71		54
	$	787	$	792	$	308

Supplemental cash flow information related to leases was as follows for the years ended December 31, 2022, 2021 and 2020:

(in thousands)	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,268	$	6,830	$	6,996
Operating cash flows from finance leases		67		71		54
Financing cash flows from finance leases		703		828		242
Total cash paid for amounts included in the measurement of lease liabilities	$	8,038	$	7,729	$	7,292

Supplemental balance sheet information related to leases was as follows:

(in thousands)	2022			2021
Operating leases
Operating lease	$	45,987		$	42,023
Operating lease accumulated amortization		(17,763	)		(14,297	)
Operating lease right of use asset, net	$	28,224		$	27,726
Operating lease current liabilities		6,098			5,940
Operating lease liabilities		22,655			22,137
	$	28,753		$	28,077

(in thousands)	2022			2021
Finance leases
Finance lease	$	3,144		$	2,710
Finance lease accumulated depreciation		(1,585	)		(965	)
Finance lease, net	$	1,559		$	1,745
Finance lease current liabilities		594			661
Finance lease liabilities		1,025			1,115
	$	1,619		$	1,776

Weighted average remaining lease term (in years)	2022			2021
Operating leases		6			6
Finance leases		3			4
Weighted average discount rate
Operating leases		3.41	%		3.44	%
Finance leases		3.56	%		3.42	%

Maturities of lease liabilities were as follows:

(in thousands)	Operating Lease			Finance Lease
Year Ending December 31,
2023	$	7,100		$	640
2024		6,342			531
2025		5,121			336
2026		4,215			157
2027		3,317			41
Thereafter		5,734			3
Total future minimum lease payments	$	31,829		$	1,708
Less remaining imputed interest		(3,076	)		(89	)
Total	$	28,753		$	1,619