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Note 7 - Leases | 12 Months Ended
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Mar. 31, 2020
Notes to Financial Statements |
Lessee, Operating and Finance Leases [Text Block] | 7 . Leases The Company determines if an arrangement is a lease at inception of the agreement. Operating leases are included in right-of-use operating assets, and current and noncurrent operating lease obligations in the Company’s Condensed Consolidated Balance Sheets. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. If the lease does not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The right-of-use operating lease assets also include in its calculation any prepaid lease payments made and excludes any lease incentives received from the arrangement. The Company’s lease terms may include options to extend or terminate the lease, and the impact of these options are included in the lease liability and lease asset calculations when the exercise of the option is at the Company’s sole discretion and it is reasonably certain that the Company will exercise that option. The Company will not separate lease and nonlease components for its leases when it is impractical to separate the two, such as leases with variable payment arrangements. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company has operating leases for land, machinery and equipment. The Company also has finance leases for machinery and equipment. The commencement date used for the calculation of the lease obligation is the latter of the commencement date of the new standard ( April 1, 2019) or the lease start date. Certain of the leases have options to extend the life of the lease, which are included in the liability calculation when the option is at the sole discretion of the Company and it is reasonably certain that the Company will exercise the option. In addition, the Company has certain leases that have variable payments based solely on output or usage of the leased asset. These variable operating lease assets are excluded from the Company’s balance sheet presentation and expensed as incurred. Leases with an initial term of 12 months or less are not material. The Company currently has finance leases which were accounted for as capital leases under the previous standard and were unchanged as a result of this standard implementation. Upon adoption of ASU 2016 - 02, the Company determined its right-of-use assets related to the operating leases for its plant equipment in Sunnyside, Washington were partially impaired and therefore were reduced with a corresponding charge to retained earnings of $2,019,000 (which is net of tax). The estimated lives of these assets will be shortened due to the planned closure of the facility after the year’s pack. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense were as follows (In thousands):
|  | Year Ended |
|  | March 31, 2020 |
Lease cost: |  |  |  |
Amortization of right of use asset |  | $ | 4,335 |
Interest on lease liabilities |  |  | 1,353 |
Finance lease cost |  |  | 5,688 |
Operating lease cost |  |  | 30,190 |
Total lease cost |  | $ | 35,878 |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from finance leases |  | $ | 1,353 |
Operating cash flows from operating leases |  |  | 29,845 |
Financing cash flows from finance leases |  |  | 6,437 |
Total |  | $ | 37,635 |
Right-of-use assets obtained in exchange for new finance lease liabilities |  | $ | 4,424 |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 6,419 |
Weighted-average lease term (years): |  |  |  |
Financing leases |  |  | 5.3 |
Operating leases |  |  | 3.8 |
Weighted-average discount rate (percentage): |  |  |  |
Financing leases |  |  | 4.1 |
Operating leases |  |  | 4.5 |
Undiscounted future lease payments under non-cancelable operating leases and financial leases, along with a reconciliation of undiscounted cash flows to operating and financing lease liabilities, respectively, as of March 31, 2020 ( in thousands) were as follows:
Years ending March 31: |  |  | Operating |  |  | Financing |
2021 |  |  | $ | 23,896 |  |  | $ | 7,313 |
2022 |  |  |  | 18,820 |  |  |  | 7,313 |
2023 |  |  |  | 13,022 |  |  |  | 7,313 |
2024 |  |  |  | 6,510 |  |  |  | 5,786 |
2025 |  |  |  | 3,023 |  |  |  | 2,395 |
2026-2031 |  |  |  | 4,597 |  |  |  | 3,995 |
Total minimum payment required |  |  | $ | 69,868 |  |  | $ | 34,115 |
Less interest |  |  |  | 5,559 |  |  |  | 3,524 |
Present value of minimum lease payments |  |  |  | 64,309 |  |  |  | 30,591 |
Amount due within one year |  |  |  | 21,549 |  |  |  | 6,225 |
Long-term lease obligation |  |  | $ | 42,760 |  |  | $ | 24,366 |
As the Company has not restated prior year information for its adoption of ASC Topic 842, the following presents its future minimum lease payments for operating and capital leases under ASC Topic 840 on March 31, 2019:
Years ending March 31: |  |  | Operating |  |  | Capital |
2020 |  |  | $ | 28,689 |  |  | $ | 7,827 |
2021 |  |  |  | 24,938 |  |  |  | 7,827 |
2022 |  |  |  | 17,526 |  |  |  | 7,827 |
2023 |  |  |  | 12,062 |  |  |  | 7,827 |
2024 |  |  |  | 5,950 |  |  |  | 6,102 |
2025-2031 |  |  |  | 6,927 |  |  |  | 5,267 |
Total minimum payment required |  |  | $ | 96,092 |  |  | $ | 42,677 |
Less interest |  |  |  |  |  |  |  | 4,973 |
Present value of minimum lease payments |  |  |  |  |  |  |  | 37,704 |
Amount due within one year |  |  |  |  |  |  |  | 6,418 |
Long-term capital lease obligation |  |  |  |  |  |  | $ | 31,286 |

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