Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.2.2
Leases
3 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Leases

Note (7) - Leases:

Company as Lessee

As of September 30, 2022, the Company had 35 facilities, consisting of warehouse facilities and administrative offices, financed under operating leases with lease term expirations between 2022 and 2030. Rent expense consists of monthly rental payments under the terms of the Company’s lease agreements recognized on a straight-line basis.

The following table provides details of the Company’s future minimum lease payments under operating lease liabilities recorded on the Company’s condensed consolidated balance sheet as of September 30, 2022. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.

Fiscal years ending June 30,

Total Operating Lease Obligations (in thousands)

2023 (remainder of)

$

2,088

 

2024

1,982

 

2025

1,408

 

2026

972

 

2027

798

 

Thereafter

1,288

 

Total minimum lease payments

$

8,536

 

Less: amounts representing interest

625

 

Present value of minimum lease payments

$

7,911

 

Less: current portion

2,471

 

Long-term portion

$

5,440

 

12


Index

EVI Industries, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

(Unaudited)

The table below presents additional information related to the Company’s operating leases (in thousands):

Three months ended

September 30,

2022

2021

Operating lease cost

 

Operating lease cost (1)

$

773

 

$

621

 

Short-term lease cost (1)

-

 

-

 

Variable lease cost (1)

18

 

35

 

Total lease cost

$

791

 

$

656

 

 

(1)

 

Expenses are classified within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

The table below presents lease-related terms and discount rates as of September 30, 2022:

September 30, 2022

Weighted average remaining lease terms

Operating leases

4.7 years

Weighted average discount rate

Operating leases

3.3%

The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the three months ended September 30, 2022 and 2021 (in thousands):

Three months ended

September 30,

2022

2021

Cash paid for amounts included in the measurement of lease liabilities:

$

773

 

$

621

 

Operating lease right-of-use assets obtained in exchange for operating lease liabilities:

$

300

 

$

610

 

Company as Lessor

The Company derives a portion of its revenue from equipment leasing arrangements. Such arrangements provide for monthly payments covering the equipment provided, maintenance, and interest. These arrangements meet the criteria to be accounted for as sales type leases. Accordingly, revenue from the provision of the equipment is recognized upon delivery of the equipment and its acceptance by the customer. Upon the recognition of such revenue, an asset is established for the investment in sales type leases. Maintenance revenue and interest are recognized monthly over the lease term.

13


Index

EVI Industries, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

(Unaudited)

The future minimum lease payments receivable for sales type leases are as follows (in thousands):

Fiscal years ending June 30,

Total Minimum Lease Payments Receivable

Amortization of Unearned Income

Net Investment in Sales Type Leases

2023 (remainder of)

$

3,010

$

1,814

$

1,196

 

2024

3,131

1,891

1,240

 

2025

2,312

1,340

972

 

2026

1,660

840

820

 

2027

870

449

421

 

Thereafter

679

264

415

 

$

5,064*

 

* Excludes residual values of $2.7 million.

The total net investments in sales type leases, including stated residual values, as of September 30, 2022 and June 30, 2022 was $7.8 million and $7.7 million, respectively. The current portion of $1.6 million and $2.0 million is included in other current assets in the consolidated balance sheets as of September 30, 2022 and June 30, 2022, respectively, and the long term portion of $6.2 million and $5.7 million is included in other assets in the consolidated balance sheets as of September 30, 2022 and June 30, 2022, respectively.