Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.1
Leases
 3 Months Ended
Mar. 30, 2019
Leases [Abstract]  
Leases LeasesThe Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. At inception of arrangements with vendors, the Company determines whether the contract is or contains a lease based on each party’s rights and obligations under the arrangement. At inception, any new additional operating lease liabilities and corresponding ROU assets are based on the present value of the remaining minimum rental payments. If the lease arrangement also contains non-lease components, the Company elected the practical expedient not to separate any combined lease and non-lease components for all lease contracts. For our real estate leases, the remaining fixed minimum rental payments used in the calculation of the new lease liability, include fixed payments and variable payments (if the variable payments are based on an index), over the remaining lease term. While we do have real estate leases with options to purchase the facility at a market value at the date of exercise, these are not included in the calculation of the lease liability, as these options are not expected to be exercised as of the January 1, 2019 transition date. 
The present value of the Company’s lease liability was calculated using a weighted-average incremental borrowing rate of 3.7%. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution as of the transition date. As of March 30, 2019, the Company recognized an operating right-of-use asset and lease liability of approximately $22.9 million and $23.1 million, respectively. The Company's operating lease liability increased approximately $5.5 million as a result of acquiring right-of-use-assets from new leases entered into during the three months ended March 30, 2019. As of March 30, 2019, the Company recognized a financing right-of-use asset and lease liability of approximately $3.2 million and $6.1 million, respectively. The right-of-use asset is included within Other assets in the Consolidated Condensed Balance Sheets, while the lease liability is included within Other current liabilities and Other liabilities, as appropriate.
As permitted by ASC 842, leases with expected durations of less than 12 months from inception (i.e. short-term leases) were excluded from the Company’s calculation of its lease liability and right-of-use asset. Furthermore, as permitted by ASC 842, the Company elected to apply the package of practical expedients, which allows companies not to reassess: (a) whether its expired or existing contracts are or contain leases, (b) the lease classification for any expired or existing leases, and (c) initial direct costs for any existing leases.
The following is a summary of the Company's total lease costs:
Three months ended
(In thousands) March 30, 2019
Finance Lease Cost:
Amortization of Right-of-use Assets $ 255 
Interest on Lease Liabilities 86
Total Finance Lease Cost 341 
Operating Lease Cost 1,205
Variable Lease Cost 370
Short-term Lease Cost (excluding month-to-month) 47
Less Sublease and Rental Income (212)
Total Operating Lease Cost $ 1,410 
Total Net Lease Cost $ 1,751 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities:
Three months ended
(In thousands) March 30, 2019
Operating Cash Flows Used for Finance Leases $ 341 
Operating Cash Flows Used for Operating Leases
 $ 1,005 
Financing Cash Flows Used for Finance Leases
 $ 395 
The weighted-average remaining term for the Company's operating and financing leases are approximately 8 years and 3 years, respectively.
The following is a summary of the Company's maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2019 $ 3,467  $ 1,563 
2020 3,951  2,128 
2021 3,632  2,180 
2022 3,233  743 
2023 2,618  — 
Thereafter 10,037  — 
Total Lease Payments $ 26,938  $ 6,614 
Less: Interest 3,822  532 
Total Lease Liability $ 23,116  $ 6,082 
Leases LeasesThe Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. At inception of arrangements with vendors, the Company determines whether the contract is or contains a lease based on each party’s rights and obligations under the arrangement. At inception, any new additional operating lease liabilities and corresponding ROU assets are based on the present value of the remaining minimum rental payments. If the lease arrangement also contains non-lease components, the Company elected the practical expedient not to separate any combined lease and non-lease components for all lease contracts. For our real estate leases, the remaining fixed minimum rental payments used in the calculation of the new lease liability, include fixed payments and variable payments (if the variable payments are based on an index), over the remaining lease term. While we do have real estate leases with options to purchase the facility at a market value at the date of exercise, these are not included in the calculation of the lease liability, as these options are not expected to be exercised as of the January 1, 2019 transition date. 
The present value of the Company’s lease liability was calculated using a weighted-average incremental borrowing rate of 3.7%. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution as of the transition date. As of March 30, 2019, the Company recognized an operating right-of-use asset and lease liability of approximately $22.9 million and $23.1 million, respectively. The Company's operating lease liability increased approximately $5.5 million as a result of acquiring right-of-use-assets from new leases entered into during the three months ended March 30, 2019. As of March 30, 2019, the Company recognized a financing right-of-use asset and lease liability of approximately $3.2 million and $6.1 million, respectively. The right-of-use asset is included within Other assets in the Consolidated Condensed Balance Sheets, while the lease liability is included within Other current liabilities and Other liabilities, as appropriate.
As permitted by ASC 842, leases with expected durations of less than 12 months from inception (i.e. short-term leases) were excluded from the Company’s calculation of its lease liability and right-of-use asset. Furthermore, as permitted by ASC 842, the Company elected to apply the package of practical expedients, which allows companies not to reassess: (a) whether its expired or existing contracts are or contain leases, (b) the lease classification for any expired or existing leases, and (c) initial direct costs for any existing leases.
The following is a summary of the Company's total lease costs:
Three months ended
(In thousands) March 30, 2019
Finance Lease Cost:
Amortization of Right-of-use Assets $ 255 
Interest on Lease Liabilities 86
Total Finance Lease Cost 341 
Operating Lease Cost 1,205
Variable Lease Cost 370
Short-term Lease Cost (excluding month-to-month) 47
Less Sublease and Rental Income (212)
Total Operating Lease Cost $ 1,410 
Total Net Lease Cost $ 1,751 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities:
Three months ended
(In thousands) March 30, 2019
Operating Cash Flows Used for Finance Leases $ 341 
Operating Cash Flows Used for Operating Leases
 $ 1,005 
Financing Cash Flows Used for Finance Leases
 $ 395 
The weighted-average remaining term for the Company's operating and financing leases are approximately 8 years and 3 years, respectively.
The following is a summary of the Company's maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2019 $ 3,467  $ 1,563 
2020 3,951  2,128 
2021 3,632  2,180 
2022 3,233  743 
2023 2,618  — 
Thereafter 10,037  — 
Total Lease Payments $ 26,938  $ 6,614 
Less: Interest 3,822  532 
Total Lease Liability $ 23,116  $ 6,082