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LEASES | 12 Months Ended
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Oct. 31, 2022
LEASES [Abstract] |
LEASES | NOTE 8 - LEASES In February 2021, we entered into a five-year $7.2 million finance lease for a high-end inspection tool. Monthly payments on the lease, which commenced in February 2021, are $0.1 million per month. Upon the payment of the fiftieth monthly payment and prior to payment of the fifty-first monthly payment, we may exercise an early buyout option to purchase the tool for $2.4 million. If we do not exercise the early buyout option, then at the end of the five-year lease term, the lease shall continue to renew on a month-to-month basis at the same rental terms; at our option, after the original term or any renewal periods, we may return the tool, elect to extend the lease, or purchase the tool at its fair market value. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.08%. In December 2020, we entered into a five-year $35.5 million finance lease for a high-end lithography tool. Monthly payments on the lease, which commenced in January 2021, increased from $0.04 million during the first three months to $0.6 million for the following nine months, followed by forty-eight monthly payments of $0.5 million. As of the due date of the forty-eighth monthly payment, we may exercise an early buyout option to purchase the tool for $14.1 million. If we do not exercise the early buyout option, then at the end of the five-year lease term, at our option, we may return the tool, elect to extend the lease term for a period and a lease payment to be agreed with lessor at the time, or purchase the tool for its then-fair market value as determined by the lessor. Since we are reasonably certain that we will exercise the early buyout option, our lease liability reflects such exercise and we have classified the lease as a finance lease. The interest rate implicit in the lease is 1.58%. The lease agreement incorporates the covenants included in our Corporate Credit Agreement, which are detailed in Note 6, and includes a cross-default provision for any agreement or instrument with an outstanding, committed balance greater than $5.0 million in which we are the indebted party. The following table provides information on operating and finance leases included in our consolidated balance sheets.
Classification |  | October 31, 2022 |  |  | October 31, 2021 |
ROU Assets – Operating Leases |  |  |  |  |  |
Other assets |  | $ | 3,341 |  |  | $ | 5,581 |
ROU Assets – Finance Leases |  |  |  |  |  |  |  |
Property, plant and equipment, net |  | $ | 37,976 |  |  | $ | 40,827 |
Lease Liabilities – Operating Leases |  |  |  |  |  |  |  |
Accrued liabilities |  | $ | 1,354 |  |  | $ | 2,273 |
Other liabilities |  |  | 1,928 |  |  |  | 3,246 |
|  | $ | 3,282 |  |  | $ | 5,519 |
Lease Liabilities – Finance Leases |  |  |  |  |  |  |  |
Current portion of long-term debt |  | $ | 6,512 |  |  | $ | 7,289 |
Long-term debt |  |  | 24,571 |  |  |  | 31,083 |
|  | $ | 31,083 |  |  | $ | 38,372 |
The following table presents future lease payments under noncancelable operating and finance leases as of October 31, 2022. Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.
Fiscal Year |  | Operating Leases |  |  | Finance Leases |
2023 |  | $ | 1,398 |  |  | $ | 6,938 |
2024 |  |  | 913 |  |  |  | 6,938 |
2025 |  |  | 614 |  |  |  | 18,013 |
2026 |  |  | 346 |  |  |  | - |
2027 |  |  | 132 |  |  |  | - |
Total lease payments |  |  | 3,403 |  |  |  | 31,889 |
Imputed interest |  |  | (121 | ) |  |  | (806 | )
Lease liabilities |  | $ | 3,282 |  |  | $ | 31,083 |
The following table presents lease costs for 2022, 2021, and 2020.
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
Operating lease costs |  | $ | 2,253 |  |  | $ | 2,904 |  |  | $ | 3,076 |
Short-term lease costs |  | $ | 469 |  |  | $ | 232 |  |  | $ | 359 |
Variable lease costs |  | $ | 603 |  |  | $ | 498 |  |  | $ | 378 |
Interest on finance lease |  | $ | 522 |  |  | $ | 510 |  |  | $ | - |
Amortization of ROU assets |  | $ | 2,917 |  |  | $ | 1,867 |  |  | $ | - |
The following table presents statistical information related to our operating and finance leases. The information presented is as of the balance sheet dates.
|  | October 31, 2022 |  | October 31, 2021 |
Classification |  | Weighted-average remaining lease term (in years) |  | Weighted-average discount rate |  | Weighted-average remaining lease term (in years) |  | Weighted-average discount rate |
Operating leases |  |  |  | 3.1 |  |  |  | 2.3 | % |  |  | 3.5 |  |  |  | 2.4 | %
Finance leases |  |  |  | 2.2 |  |  |  | 1.5 | % |  |  | 3.3 |  |  |  | 1.5 | %
The following table presents the effects of leases on our 2022, 2021, and 2020 consolidated statements of cash flows, and provides leases-related non-cash information for those years.
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
Operating cash flows used for operating leases |  | $ | 2,259 |  |  | $ | 2,442 |  |  | $ | 3,584 |
Operating cash flows used for finance leases |  | $ | 566 |  |  | $ | 464 |  |  | $ | - |
Financing cash flows used for finance leases |  | $ | 7,289 |  |  | $ | 4,323 |  |  | $ | - |
ROU assets obtained in exchange for operating lease obligations |  | $ | 513 |  |  | $ | 457 |  |  | $ | 2,681 |
ROU assets obtained in exchange for finance lease obligations |  | $ | - |  |  | $ | 42,672 |  |  | $ | - |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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