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Note 11 - Commitments | 3 Months Ended
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Jan. 31, 2024
Notes to Financial Statements |
Commitments Disclosure [Text Block] | Note 11 – 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 ten 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 periods ending January 31, 2024 and 2023 were as follows (in thousands):
|  | Three Months Ended January 31, |
|  | 2024 |  |  | 2023 |
Operating lease cost |  | $ | 737 |  |  | $ | 762 |
Short-term lease cost |  |  | - |  |  |  | - |
Other information related to leases was as follows (in thousands):
|  | January 31, 2024 |  |  | October 31, 2023 |
Supplemental Cash Flows Information |  |  |  |  |  |  |  |
ROU assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  | $ | - |  |  | $ | 6,479 |
Weighted Average Remaining Lease Term |  |  |  |  |  |  |  |
Operating leases (in months) |  |  | 112.00 |  |  |  | 114.26 |
Weighted Average Discount Rate |  |  |  |  |  |  |  |
Operating leases |  |  | 6.97 | % |  |  | 6.96 | %
Future minimum lease payments under non-cancellable leases as of January 31, 2024 were as follows:
Year ending October 31, | Operating Leases |
2024 (excluding three months ended January 31, 2024) | $ | 1,814 |
2025 |  | 2,827 |
2026 |  | 2,877 |
2027 |  | 2,929 |
2028 |  | 2,997 |
Thereafter |  | 14,878 |
Total future minimum lease payments |  | 28,322 |
Less imputed interest |  | (7,950 | )
Total | $ | 20,372 |
Reported as of January 31, 2024 |  | Operating Leases |
Other current liabilities |  | $ | 1,338 |
Operating lease liabilities |  |  | 19,034 |
Total |  | $ | 20,372 |
As of January 31, 2024, operating lease right-of-use asset was $15.3 million and operating lease liability totaled $20.4 million, of which $1.3 million is classified as current. There were no finance leases as of January 31, 2024. The Schrofftech facilities, consisting of one building for a total of 7,000 square feet, is leased by RF Industries, Ltd. under a lease that was renewed effective February 1, 2024, for one year expiring January 31, 2025. The aggregate monthly rental payment under the new lease currently is $4,607 per month.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//440/tableOfContent + Details
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