Company: NGVC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025419
Chunk: 68

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 68
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 date the underlying asset becomes available for use) for the present value of lease payments, less tenant improvement allowances received or receivable. Leases with a term of 12 months or less (short-term leases) are not presented on the balance sheet. The Company has elected to account for the lease and non-lease components as a single lease component for all current classes of leases.

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The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company subleases certain real estate or portions thereof to third parties. Such subleases have all been classified as operating leases. Remaining sublease terms extend through fiscal year 2030. Although some sublease arrangements provide renewal options, the exercise of sublease renewal options is at the sole discretion of the subtenant. The Company recognizes sublease income on a straight-line basis.

The Company has five operating leases with Chalet Properties, LLC (Chalet), one operating lease with the Isely Family Land Trust LLC (Land Trust) and one operating lease with FTVC, LLC (FTVC), each of which is a related party (see Note 13). The leases began at various times with the earliest commencing in November 1999, continue for various terms through May 2042 and include various options to renew. The terms and rental rates of these leases have been approved by our audit committee in accordance with our related party transaction policy. As of June 30, 2025, these leases accounted for $8.6 million of operating lease assets and $8.8 million of operating lease liabilities, of which $0.8 million was current, and are included in the disclosures below. Lease expense is recognized on a straight-line basis and was $0.3 million for each of the three months ended June 30, 2025 and 2024 and $0.9 million for each of the nine months ended June 30, 2025 and 2024.

The components of total lease cost for the three and nine months ended June 30, 2025 and 2024 were as follows, dollars in thousands:

			Three months ended 

			Nine months ended

			June 30,

			June 30,

			Lease cost

			Classification

			2025

			2024

			2025

			2024

			Operating lease cost:

			Cost of goods sold and occupancy costs

			$
			11,143

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