XML 31 R22.htm IDEA: XBRL DOCUMENT
v3.23.2

Note 15 - Leases | 9 Months Ended
--- | ---
Jun. 30, 2023
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] | Note 15. Leases The Company leases an 85,000 square foot facility in 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 that operates as a Maquiladora. The lease term is for seven years, of which five years are mandatory, commencing in March 2022. The lease contains written options to renew for two additional consecutive periods of five 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 in 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. Nestor Cables leases an approximately 25,000 square foot manufacturing facility in Oulu, Finland, which is utilized for the operations of Nestor Cables. The original lease term ended on October 31, 2022, but auto renews indefinitely until terminated with two years written notice. It is not reasonably certain that Nestor Cables will not exercise the termination option. The lease calls for monthly rental payments of approximately $40,000. Rent is increased each year on January 1st based upon the cost-of-living index published by the Finnish government. On May 11, 2023, Nestor Cables signed a lease for an approximately 49,000 square foot manufacturing facility in Tabasalu, Estonia, to be utilized for the operations of Nestor Cables Baltics. The lease is without a fixed term and requires two years’ written notice to terminate the lease. Additionally, the lease grants to Nestor Cables the option to lease an expansion facility that is to be constructed no later than August 31, 2024. The expansion facility will be constructed on the same premises as the existing facility. Once the expansion option is exercised and the expansion facility is made available for use, the lease term of the existing facility will become a minimum of 60 months. The Company evaluated the terms of the lease and concluded that Nestor Cables is reasonably certain that it will exercise the expansion option, therefore the lease term being applied by the Company under ASC842 is at least 60 months. The lease calls for monthly rental payments of approximately €20,400 until April 2024 and €25,000 afterwards. Rent is increased each year on May 1st based upon the cost-of-living index published by the Finnish government and capped at 5%. 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 months ended:
Operating lease expense within: (in thousands) |  | Three Months Ended June 30, |  |  | Nine Months Ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Cost of sales |  | $ | 1,029 |  |  | $ | 797 |  |  | $ | 2,991 |  |  | $ | 1,521 |
Selling, general and administrative |  |  | 63 |  |  |  | 54 |  |  |  | 182 |  |  |  | 166 |
Total lease expense |  | $ | 1,092 |  |  | $ | 851 |  |  | $ | 3,173 |  |  | $ | 1,687 |
Future maturities of lease liabilities were as follows as of June 30, 2023 (in thousands):
FY2023(Remaining) |  | $ | 1,302 |
FY2024 |  |  | 4,217 |
FY2025 |  |  | 3,433 |
FY2026 |  |  | 3,253 |
FY2027 |  |  | 1,583 |
Thereafter |  |  | 3,097 |
Total lease payments |  |  | 16,885 |
Less: Interest |  |  | (1,591 | )
Present value of lease liabilities |  | $ | 15,294 |
The weighted average term and weighted average discount rate for the Company’s leases as of June 30, 2023, were 5.10 years and 3.58%, respectively, compared to 4.47 years and 3.05%, respectively, as of June 30, 2022. For the three and nine months ended June 30, 2023, the operating cash outflows from the Company’s leases were $1,012,000 and $2,910,000, respectively, compared to $617,000 and $1,167,000 respectively, for the three and nine months ended June 30, 2022.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration