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Note 14 - Commitments

12 Months Ended

Oct. 31, 2023

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 14 – Commitments

We adopted ASU 2016-02 on November 1, 2019, and elected the practical expedient modified retrospective method whereby the lease qualification and classification was carried over from the accounting for leases under ASC 840. The lease contracts for the corporate headquarters, RF Connector division manufacturing facilities, Cables Unlimited, Rel-Tech, and C Enterprises commenced prior to the effective date of November 1, 2019, and were determined to be operating leases. All other new contracts have been assessed for the existence of a lease and for the proper classification into operating leases. The rate implicit in the leases was undeterminable and, therefore, the discount rate used in all lease contracts is our incremental borrowing rate.

We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 per month.

We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the period ended October 31, 2023 were as follows (in thousands):

		Fiscal Year Ended
		October 31, 2023
Operating lease cost		$	2,872
Short-term lease cost			1

Other information related to leases was as follows (in thousands):

		October 31, 2023				October 31, 2022
Supplemental Cash Flows Information
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		$	6,479			$	13,352

Weighted Average Remaining Lease Term
Operating leases (in months)			114.26				113.72

Weighted Average Discount Rate
Operating leases			6.96	%			3.75	%

Future minimum lease payments under non-cancellable leases as of October 31, 2023 were as follows (in thousands):

Year ended October 31,		Operating Leases

2024		$	2,404
2024			2,827
2025			2,877
2027			2,929
Thereafter			17,874
Total future minimum lease payments			28,911
Less imputed interest			(8,313	)
Total		$	20,598

Reported as of October 31, 2023		Operating Leases
Other current liabilities		$	1,314
Operating lease liabilities			19,284
Total		$	20,598

As of October 31, 2023, operating lease right-of-use asset was $15.7 million and operating lease liability totaled $20.6 million, of which $1.3 million is classified as current. There were no finance leases as of October 31, 2023.