Annual report pursuant to Section 13 and 15(d)

Leases

v3.20.4
Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases LEASES
The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and office equipment, finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
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. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Consolidated Balance Sheets, while variable lease payments based on usage of the underlying asset have been excluded, as they do not represent present rights or obligations. Variable lease components for leases relate primarily to common area maintenance charges and other separately billed lessor services, sales and real estate taxes. Variable lease costs are expensed in the period they are incurred. We have also elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts where the base lease payment contains both. In this situation, these lease agreements are accounted for as a single lease component for all classes of underlying assets. 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.
Any new additional operating lease liabilities and corresponding right-of-use assets are based on the present value of the remaining minimum rental payments. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution. The Company’s change in ROU assets in exchange for operating lease liabilities from new leases entered into or acquired, net of modifications, was insignificant during the year ended December 31, 2020. No new financing lease liabilities were entered into during the year ended December 31, 2020.
The following is a summary of the Company's ROU assets and liabilities at December 31:
(In thousands) 2020 2019
Operating Leases:
Operating Right-of-Use Assets, Gross $ 28,678  $ 28,788 
Less Accumulated Right-of-Use Asset Impairment 1,710  1,019 
Less Accumulated Amortization 8,015  4,167 
Operating Right-of-Use Assets, Net $ 18,953  $ 23,602 
Short-term Operating Lease Liabilities $ 4,998  $ 4,517 
Long-term Operating Lease Liabilities 16,637  21,039 
Operating Lease Liabilities $ 21,635  $ 25,556 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 3,484  $ 3,484 
Less Accumulated Amortization 2,039  1,020 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 1,445  $ 2,464 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 2,081  $ 1,922 
Long-term Finance Lease Liabilities — Included in Other Liabilities 734  2,815 
Finance Lease Liabilities $ 2,815  $ 4,737 
The following is a summary of the Company's total lease costs as of December 31:
(In thousands) 2020 2019
Finance Lease Cost:
Amortization of ROU Assets $ 1,020  $ 1,020 
Interest on Lease Liabilities 214 314
Total Finance Lease Cost 1,234  1,334 
Operating Lease Cost 5,292 5,050
Impairment Charge of Operating Lease ROU Asset 691 1,019
Variable Lease Cost 1,358 1,236
Short-term Lease Cost (excluding month-to-month) 175 223
Less Sublease and Rental (Income) Expense (1,437) (630)
Total Operating Lease Cost 6,079  6,898 
Total Net Lease Cost $ 7,313  $ 8,232 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2020 2019
Operating Cash Flow for Finance Leases $ 214  $ 314 
Operating Cash Flow for Operating Leases $ 5,334  $ 4,718 
Financing Cash Flow for Finance Leases $ 1,922  $ 1,746 
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 weighted-average remaining term for the Company's operating and financing leases are approximately 6 years and 1 year, respectively. The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3% and 5.3%, respectively.
The following is a summary of the Company's maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2021 $ 5,635  $ 2,181 
2022 5,167  747 
2023 3,795  — 
2024 2,855  — 
2025 2,806  — 
Thereafter 3,430  — 
Total Lease Payments $ 23,688  $ 2,928 
Less: Interest 2,053  113 
Total Lease Liability $ 21,635  $ 2,815 
Leases LEASES
The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and office equipment, finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
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. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Consolidated Balance Sheets, while variable lease payments based on usage of the underlying asset have been excluded, as they do not represent present rights or obligations. Variable lease components for leases relate primarily to common area maintenance charges and other separately billed lessor services, sales and real estate taxes. Variable lease costs are expensed in the period they are incurred. We have also elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts where the base lease payment contains both. In this situation, these lease agreements are accounted for as a single lease component for all classes of underlying assets. 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.
Any new additional operating lease liabilities and corresponding right-of-use assets are based on the present value of the remaining minimum rental payments. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution. The Company’s change in ROU assets in exchange for operating lease liabilities from new leases entered into or acquired, net of modifications, was insignificant during the year ended December 31, 2020. No new financing lease liabilities were entered into during the year ended December 31, 2020.
The following is a summary of the Company's ROU assets and liabilities at December 31:
(In thousands) 2020 2019
Operating Leases:
Operating Right-of-Use Assets, Gross $ 28,678  $ 28,788 
Less Accumulated Right-of-Use Asset Impairment 1,710  1,019 
Less Accumulated Amortization 8,015  4,167 
Operating Right-of-Use Assets, Net $ 18,953  $ 23,602 
Short-term Operating Lease Liabilities $ 4,998  $ 4,517 
Long-term Operating Lease Liabilities 16,637  21,039 
Operating Lease Liabilities $ 21,635  $ 25,556 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 3,484  $ 3,484 
Less Accumulated Amortization 2,039  1,020 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 1,445  $ 2,464 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 2,081  $ 1,922 
Long-term Finance Lease Liabilities — Included in Other Liabilities 734  2,815 
Finance Lease Liabilities $ 2,815  $ 4,737 
The following is a summary of the Company's total lease costs as of December 31:
(In thousands) 2020 2019
Finance Lease Cost:
Amortization of ROU Assets $ 1,020  $ 1,020 
Interest on Lease Liabilities 214 314
Total Finance Lease Cost 1,234  1,334 
Operating Lease Cost 5,292 5,050
Impairment Charge of Operating Lease ROU Asset 691 1,019
Variable Lease Cost 1,358 1,236
Short-term Lease Cost (excluding month-to-month) 175 223
Less Sublease and Rental (Income) Expense (1,437) (630)
Total Operating Lease Cost 6,079  6,898 
Total Net Lease Cost $ 7,313  $ 8,232 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2020 2019
Operating Cash Flow for Finance Leases $ 214  $ 314 
Operating Cash Flow for Operating Leases $ 5,334  $ 4,718 
Financing Cash Flow for Finance Leases $ 1,922  $ 1,746 
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 weighted-average remaining term for the Company's operating and financing leases are approximately 6 years and 1 year, respectively. The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3% and 5.3%, respectively.
The following is a summary of the Company's maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2021 $ 5,635  $ 2,181 
2022 5,167  747 
2023 3,795  — 
2024 2,855  — 
2025 2,806  — 
Thereafter 3,430  — 
Total Lease Payments $ 23,688  $ 2,928 
Less: Interest 2,053  113 
Total Lease Liability $ 21,635  $ 2,815