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Note 10 - Leases

9 Months Ended

Sep. 30, 2023

Lessee, Operating and Finance Leases [Text Block]

(10)

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.

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

	September 30,		December 31,
	2023		2022
Operating lease ROU assets	$	14,059	$	12,942
Finance lease ROU assets		166		211
Total ROU assets	$	14,225	$	13,153
Operating lease liabilities, current	$	3,103	$	2,458
Finance lease liabilities, current		60		59
Total lease liabilities, current	$	3,163	$	2,517
Operating lease liabilities, long-term	$	11,353	$	10,695
Finance lease liabilities, long-term		111		156
Total lease liabilities, long-term	$	11,464	$	10,851

	Nine Months Ended
	September 30,
	($ in thousands)
	2023		2022
Lease Cost:
Finance lease cost:
Amortization of right of use assets	$	45	$	45
Interest on lease liabilities		3		4
Operating lease cost		2,304		1,962
Variable lease cost		240		228
Short-term lease cost		38		49
Total lease cost	$	2,630	$	2,288

	Nine Months Ended
	September 30,
	($ in thousands)
	2023			2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	2,197		$	1,839
Financing cash flows from finance leases		47			47

Weighted-average remaining lease term (years):
Finance		2.79			3.79
Operating		4.57			3.88
Weighted-average discount rate:
Finance		2.10	%		2.10	%
Operating		3.42	%		2.75	%

The aggregate future lease payments for leases as of September 30, 2023 are as follows (in thousands):

	Operating			Finance
Remainder of 2023	$	775		$	16
2024		3,183			63
2025		3,024			63
2026		2,660			28
2027		2,302			6
Thereafter		4,019			-
Total lease payments		15,963			176
Less: Interest		(1,507	)		(5	)
Present value of lease liabilities	$	14,456		$	171