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Note 12 - Leases | 9 Months Ended
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Jun. 30, 2022
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] | Note 12. Leases The Company leases an 85,000 square foot facility at 7050 Winnetka Avenue North, Brooklyn Park, Minnesota consisting of corporate offices, manufacturing and warehouse space. The lease term is ten years and two months, ending on February 28, 2025 and is renewable. The renewal options have not been included within the lease term because it is not reasonably certain that the Company will exercise either option. In July 2021, the Company entered into an indirect lease arrangement for an approximately 318,000 square foot manufacturing facility in Tijuana, Mexico. The lease term is for 7 years of which 5 years are mandatory, commencing March 2022. The lease contains written options to renew for two additional consecutive periods of 5 years each. The lease calls for monthly rental payments of $162,000, increasing 2% annually. The renewal options have not been included within the lease term because it is not reasonably certain that the Company will exercise either option. On November 19, 2021, the Company signed a lease for a 105,000 square foot warehouse in Brooklyn Park, Minnesota. The lease term is five years commencing March 2022 and ending on February 28, 2027, with rent payments increasing annually. The lease includes an option to extend the lease for an additional five years. The renewal option has not been included within the lease term because it is not reasonably certain that the Company will exercise the option. The lease commenced in the second quarter of fiscal 2022. Right-of-use lease assets and lease liabilities are recognized as of the commencement date based on the present value of the remaining lease payments over the lease term which includes renewal periods the Company is reasonably certain to exercise. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. Operating lease expense included within cost of goods sold and selling, general and administrative expense was as follows for the three and nine months ended:
Operating lease expense within: |  | Three Months Ended June 30, |  |  | Nine Months Ended June 30, |
(in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Cost of sales |  | $ | 797 |  |  | $ | 242 |  |  | $ | 1,521 |  |  | $ | 748 |
Selling, general and administrative |  |  | 54 |  |  |  | 51 |  |  |  | 166 |  |  |  | 162 |
Total lease expense |  | $ | 851 |  |  | $ | 293 |  |  | $ | 1,687 |  |  | $ | 910 |
Future maturities of lease liabilities were as follows as of June 30, 2022 (in thousands):
FY2022 (Remaining) |  | $ | 778 |
FY2023 |  |  | 3,158 |
FY2024 |  |  | 3,233 |
FY2025 |  |  | 2,997 |
FY2026 |  |  | 2,844 |
Thereafter |  |  | 1,196 |
Total lease payments |  |  | 14,206 |
Less: Interest |  |  | (951 | )
Present value of lease liabilities |  | $ | 13,255 |
The weighted average term and weighted average discount rate for the Company’s leases as of June 30, 2022 were 4.47 years and 3.05%, respectively, compared to 3.09 years and 3.41%, respectively, as of June 30, 2021. For the three and nine months ended June 30, 2022, the operating cash outflows from the Company’s leases was $617,000 and $1,167,000, compared to $243,000 and $723,000 for the three and nine months ended June 30, 2021.

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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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