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LEASES | 9 Months Ended
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Jul. 31, 2021
LEASES |
LEASES | 8. LEASES We adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (“ASC 842”) on November 1, 2019, the start of our 2020 fiscal year, and utilized the transition method allowed. Accordingly, comparative period financial information was not adjusted for the effects of adopting ASC 842 and no cumulative-effect adjustment was required to the opening balance of retained earnings on the adoption date. Upon adoption of ASC 842, we utilized the following elections:
| ● | We have elected to combine non-lease components with lease components.
| ● | If at the lease commencement date, a lease has a lease term of 12 months or less and does not include a purchase option that is reasonably certain to be exercised, we have elected not to apply ASC 842 recognition requirements. Nonetheless, we intend to include leases of less than 12 months within the updated footnote disclosures, if material.
| ● | We have elected not to use the portfolio method if we enter into a large number of leases in the same month with the same terms and conditions.
Our lease portfolio includes leased production and assembly facilities, warehouses and distribution centers, office space, vehicles, material handling equipment utilized in our production and assembly facilities, laptops and other information technology equipment, as well as other miscellaneous leased equipment. Most of the leased production and assembly facilities have lease terms ranging from two to five years, although the terms and conditions of our leases can vary significantly from lease to lease. We have assessed the specific terms and conditions of each lease to determine the amount of the lease payments and the length of the lease term, which includes the minimum period over which lease payments are required plus any renewal options that are both within our control to exercise and reasonably certain of being exercised upon lease commencement. In determining whether or not a renewal option is reasonably certain of being exercised, we assessed all relevant factors to determine if sufficient incentives exist as of lease commencement to conclude renewal is reasonably certain. There are no material residual value guarantees provided by us, nor any material restrictions or covenants imposed by the leases to which we are a party. In determining the lease liability, we utilize our incremental borrowing rate to discount the future lease payments over the lease term to present value. We record a right-of-use asset and lease liability on our Condensed Consolidated Balance Sheets for all leases for which we are a lessee, in accordance with ASC 842. We are a lessor in a small number of lease agreements associated with our machine tools and/or automation integration equipment for which the impact to our consolidated financial statements is immaterial. All our leases for which we are a lessee are classified as operating leases under the guidance in Topic 840. We recorded total operating lease expense of $3.9 million and $3.7 million for the nine months ended July 31, 2021 and 2020, respectively, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations. Operating lease expense includes short-term leases and variable lease payments which are immaterial. There were no lease costs capitalized on the Condensed Consolidated Balance Sheets as of July 31, 2021. The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the nine months ended July 31, 2021 (in thousands): ​
​ | ​ | ​ | ​
​ | ​ | Nine Months Ended
​ |  | July 31, 2021
Operating cash flow information: | ​ | ​ | ​
Cash paid for amounts included in the measurement of lease liabilities | ​ | $ | 3,827
Non-cash information: | ​ | ​ | ​
Right-of-use assets obtained in exchange for new operating lease liabilities | ​ | $ | 3,003
​ The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of July 31, 2021 (in thousands): ​
​ | ​ | ​ | ​
Remainder of 2021 | ​ | $ | 1,208
2022 | ​ | ​ | 4,116
2023 | ​ | ​ | 2,775
2024 | ​ | ​ | 1,210
2025 | ​ | ​ | 821
2026 and thereafter | ​ | ​ | 1,750
Total | ​ | ​ | 11,880
Less: Imputed interest | ​ | ​ | (378)
Present value of operating lease liabilities | ​ | $ | 11,502
​ As of July 31, 2021, the weighted-average remaining term of our lease portfolio was approximately 4.0 years and the weighted-average discount rate was approximately 1.6%.

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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 http://asc.fasb.org/subtopic&trid=77888251 + Details
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