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Note 11 - Commitments

3 Months Ended

Jan. 31, 2025

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 Cables Unlimited and Rel-Tech 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 $18,000 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, 2025 and 2024 were as follows (in thousands):

		Three Months Ended January 31,
		2025				2024
Operating lease cost		$	739			$	737

As of January 31, 2025, operating lease right-of-use assets were $14.9 million and operating lease liabilities totaled $20.1 million, of which $1.9 million is classified as current. There were no finance leases as of January 31, 2025. Future minimum lease payments under non-cancellable leases as of January 31, 2025 are a total of $26.7 million.

The Schrofftech facilities, consisting of one building of a total of 7,000 square feet, are leased by RF Industries, Ltd. under a lease that was renewed effective February 1, 2025, for one year expiring January 31, 2026. 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

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