Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.0.1
Leases
9 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases

NOTE 13 – LEASES:

The Company leases certain manufacturing facilities, office space, machinery and office equipment. An arrangement is considered to contain a lease if it conveys the right to use and control an identified asset for a period of time in exchange for consideration. If it is determined that an arrangement contains a lease, then a classification of a lease as operating or finance is determined by evaluating the five criteria outlined in the lease accounting guidance at inception. Leases generally have remaining terms of one year to five years, whereas leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets. The depreciable life of leased assets related to finance leases is limited by the expected term of the lease, unless there is a transfer of title or purchase option that the Company believes is reasonably certain of exercise. Certain leases include options to renew or terminate. Renewal options are exercisable per the discretion of the Company and vary based on the nature of each lease. The term of the lease includes renewal periods only if the Company is reasonably certain that it will exercise the renewal option. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to, the cost of moving to another location, the cost of disrupting operations, whether the purpose or location of the leased asset is unique and the contractual terms associated with extending the lease. The Company’s lease agreements do not contain any residual value guarantees or any material restrictive covenants and the Company does not sublease to any third parties. As of December 31, 2021, the Company did not have any material leases that have been signed but not commenced.

Right-of-use ("ROU") lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments in exchange for that right of use. Finance lease ROU assets and operating lease ROU assets are included in the line items "Property, plant and equipment, net" and "Operating lease assets", respectively, in the Condensed Consolidated Balance Sheets. The current portion and non-current portion of finance and operating lease liabilities are all presented separately in the Condensed Consolidated Balance Sheets.

The discount rate implicit within the Company’s leases is generally not readily determinable, and therefore, the Company uses an incremental borrowing rate in determining the present value of lease payments based on rates available at commencement.

The weighted average remaining lease term and discount rate for finance and operating leases are as follows:

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Finance Leases

 

 

 

 

 

 

Weighted-average remaining lease term in years

 

 

1.67

 

 

 

2.63

 

Weighted-average discount rate

 

 

10.67

%

 

 

10.77

%

 

 

 

 

 

 

 

Operating Leases

 

 

 

 

 

 

Weighted-average remaining lease term in years

 

 

7.72

 

 

 

1.67

 

Weighted-average discount rate

 

 

3.27

%

 

 

5.49

%

 

 

 

The components of lease expense are as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

 

 

 

  Amortization of right-of-use assets

 

$

5

 

 

$

5

 

 

$

15

 

 

$

15

 

  Interest on lease liabilities

 

 

1

 

 

 

2

 

 

 

4

 

 

 

6

 

Operating lease cost

 

 

384

 

 

 

41

 

 

 

924

 

 

 

122

 

Short-term lease cost

 

 

3

 

 

 

1

 

 

 

18

 

 

 

7

 

Total lease cost

 

$

393

 

 

$

49

 

 

$

961

 

 

$

150

 

 

Operating lease costs during the nine months ended December 31, 2021 and 2020 were included within cost of sales and selling, general and administrative expenses.

As of December 31, 2021, future minimum payments required under non-cancelable leases are:

 

 

 

Operating
Leases

 

 

Finance
Leases

 

Remainder of 2022

 

$

342

 

 

$

7

 

2023

 

 

1,325

 

 

 

26

 

2024

 

 

1,183

 

 

 

11

 

2025

 

 

1,164

 

 

 

 

2026

 

 

1,169

 

 

 

 

2027 and thereafter

 

 

4,856

 

 

 

 

Total lease payments

 

 

10,039

 

 

 

44

 

 

 

 

 

 

 

 

Less – amount representing interest

 

 

1,223

 

 

 

4

 

Present value of net minimum lease payments

 

$

8,816

 

 

$

40