Company: NGVC
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001437749-25-003026
Chunk: 62

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-02-06
Form: 10-Q
Item: Part I, Item 8
Chunk 62
---
 real estate or portions thereof to third parties. Such subleases have all been classified as operating leases. Remaining sublease terms extend through fiscal year 2034. 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 four 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 December 31, 2024, these leases accounted for $7.3 million of operating lease assets and $7.5 million of operating lease liabilities, of which $0.9 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 December 31, 2024 and 2023.

The components of total lease cost for the three months ended December 31, 2024 and 2023 were as follows, dollars in thousands:

			Three months ended

			December 31,

			Lease cost

			Classification

			2024

			2023

			Operating lease cost:

			Cost of goods sold and occupancy costs

			$
			10,965

			11,027

			Store expenses

			115

			115

			Administrative expenses

			98

			98

			Pre-opening expenses

			163

			59

			Finance lease cost:

			Depreciation of lease assets

			Store expenses

			1,078

			1,009

			Pre-opening expenses

			—

			70

			Interest on lease liabilities

			Interest expense, net

			542

			502

			Pre-opening expenses

			—

			84

			Short-term lease cost

			Store expenses

			794

			754

			Variable lease cost