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Note 8 - Leases

6 Months Ended

Jun. 30, 2021

(8)

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 pursuant to 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 assumed 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.

	Six Months Ended
	June 30,
	($ in thousands)
	2021		2020
Lease Cost:
Finance lease cost:
Amortization of right of use assets	$	8	$	3
Interest on lease liabilities		1		-
Operating lease cost		598		606
Variable lease cost		116		111
Short-term lease cost		17		14
Total lease cost	$	740	$	734

	Six Months Ended June 30,
	($ in thousand)
	2021			2020
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	608		$	607
Financing cash flows from finance leases		9			3
ROU assets obtained in exchange for finance lease obligations		-			110

Weighted-average remaining lease term (years):
Finance		5.83			6.83
Operating		1.64			2.27
Weighted-average discount rate:
Finance		2.26	%		2.26	%
Operating		3.99	%		4.41	%

The aggregate future lease payments for leases as of June 30, 2021 are as follows (in thousands):

	Finance			Operating
Remainder of 2021	$	9		$	606
2022		17			1,054
2023		17			115
2024		17			73
2025		17			62
Thereafter		23			31
Total lease payments		100			1,941
Less: Interest		(7	)		(64	)
Present value of lease liabilities	$	93		$	1,877