NOTE 5: LEASES
Supplemental consolidated balance sheets information related to leases is as follows (in thousands):
| | | | | | | | | | | | | | | | | | |
| | Year Ended March 31, | | |
| Operating leases | | 2026 | | 2025 | | | | |
| Operating lease right-of-use assets | | $ | 7,416 | | | $ | 8,580 | | | | | |
| | | | | | | | |
| Operating lease liability, current - included in other accrued liabilities | | $ | 799 | | | $ | 856 | | | | | |
| Operating lease liability | | 8,172 | | | 8,934 | | | | | |
| Total operating lease liabilities | | $ | 8,971 | | | $ | 9,790 | | | | | |
The components of lease expense were as follows (in thousands):
| | | | | | | | | | | | | | | | |
| | Year Ended March 31, |
| Lease expense | | 2026 | | 2025 | | |
| Operating lease expense | | $ | 2,190 | | | $ | 2,895 | | | |
| Variable lease expense | | 251 | | | 263 | | | |
| Short-term lease expense | | 426 | | | 48 | | | |
| Total lease expense | | $ | 2,867 | | | $ | 3,206 | | | |
| | | | | | | | |
| Maturity of Lease Liabilities | | Operating Leases |
| Fiscal year ending March 31, 2027 | | $ | 1,964 | |
| 2028 | | 1,606 | |
| 2029 | | 1,234 | |
| 2030 | | 1,237 | |
| 2031 | | 1,285 | |
| Thereafter | | 9,569 | |
| Total lease payments | | 16,895 | |
| Less: Imputed interest | | (7,924) | |
| Present value of lease liabilities | | $ | 8,971 | |
| | | | | | | | | | | | | | | | |
| Lease Term and Discount Rate | | March 31, |
| | 2026 | | 2025 | | |
| Weighted average remaining operating lease term (years) | | 10.16 | | 10.53 | | |
| Weighted average discount rate for operating leases | | 12.67 | % | | 12.64 | % | | |
Operating cash outflows related to operating leases totaled $2.2 million and $2.8 million for the fiscal years ended March 31, 2026 and March 31, 2025, respectively.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.