Annual report pursuant to Section 13 and 15(d)

LEASES

v3.22.0.1
LEASES
 12 Months Ended
Dec. 31, 2021
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 office equipment under 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 and financing lease liabilities and corresponding right-of-use (“ROU”) 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 following is a summary of the Company's ROU assets and liabilities at December 31:
(In thousands) 2021 2020
Operating Leases:
Operating Right-of-Use Assets, Gross $ 30,318  $ 28,678 
Less Accumulated Right-of-Use Asset Impairment 1,710  1,710 
Less Accumulated Amortization 12,439  8,015 
Operating Right-of-Use Assets, Net $ 16,169  $ 18,953 
Short-term Operating Lease Liabilities $ 6,778  $ 4,998 
Long-term Operating Lease Liabilities 12,018  16,637 
Operating Lease Liabilities $ 18,796  $ 21,635 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 177  $ 3,484 
Less Accumulated Amortization 106  2,039 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 71  $ 1,445 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 72  $ 2,081 
Long-term Finance Lease Liabilities — Included in Other Liabilities —  734 
Finance Lease Liabilities $ 72  $ 2,815 
The following is a summary of the Company's total lease costs as of December 31:
(In thousands) 2021 2020
Finance Lease Cost:
Amortization of ROU Assets $ 573  $ 1,020 
Interest on Lease Liabilities 78 214
Total Finance Lease Cost 651  1,234 
Operating Lease Cost 5,881 5,292
Impairment Charge of Operating Lease ROU Asset —  691
Variable Lease Cost 1,546 1,358
Short-term Lease Cost (excluding month-to-month) 271 175
Less Sublease and Rental Income (1,265) (1,437)
Total Operating Lease Cost 6,433  6,079 
Total Net Lease Cost $ 7,084  $ 7,313 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2021 2020
Operating Cash Flow for Finance Leases $ 78  $ 214 
Operating Cash Flow for Operating Leases $ 6,711  $ 5,334 
Financing Cash Flow for Finance Leases $ 901  $ 1,922 
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 ROU 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 5 years and less than 1 year, respectively. The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3% and 1.3%, respectively.
The following is a summary of the Company's maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2022 $ 7,296  $ 72 
2023 3,879  — 
2024 2,886  — 
2025 2,808  — 
2026 1,210  — 
Thereafter 2,151  — 
Total Lease Payments $ 20,230  $ 72 
Less: Interest 1,434  — 
Total Lease Liability $ 18,796  $ 72 
These amounts exclude annual operating lease payments of $1.5 million per year through 2031, which represents legal binding lease payments for leases signed, but not yet commenced.
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 office equipment under 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 and financing lease liabilities and corresponding right-of-use (“ROU”) 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 following is a summary of the Company's ROU assets and liabilities at December 31:
(In thousands) 2021 2020
Operating Leases:
Operating Right-of-Use Assets, Gross $ 30,318  $ 28,678 
Less Accumulated Right-of-Use Asset Impairment 1,710  1,710 
Less Accumulated Amortization 12,439  8,015 
Operating Right-of-Use Assets, Net $ 16,169  $ 18,953 
Short-term Operating Lease Liabilities $ 6,778  $ 4,998 
Long-term Operating Lease Liabilities 12,018  16,637 
Operating Lease Liabilities $ 18,796  $ 21,635 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 177  $ 3,484 
Less Accumulated Amortization 106  2,039 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 71  $ 1,445 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 72  $ 2,081 
Long-term Finance Lease Liabilities — Included in Other Liabilities —  734 
Finance Lease Liabilities $ 72  $ 2,815 
The following is a summary of the Company's total lease costs as of December 31:
(In thousands) 2021 2020
Finance Lease Cost:
Amortization of ROU Assets $ 573  $ 1,020 
Interest on Lease Liabilities 78 214
Total Finance Lease Cost 651  1,234 
Operating Lease Cost 5,881 5,292
Impairment Charge of Operating Lease ROU Asset —  691
Variable Lease Cost 1,546 1,358
Short-term Lease Cost (excluding month-to-month) 271 175
Less Sublease and Rental Income (1,265) (1,437)
Total Operating Lease Cost 6,433  6,079 
Total Net Lease Cost $ 7,084  $ 7,313 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2021 2020
Operating Cash Flow for Finance Leases $ 78  $ 214 
Operating Cash Flow for Operating Leases $ 6,711  $ 5,334 
Financing Cash Flow for Finance Leases $ 901  $ 1,922 
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 ROU 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 5 years and less than 1 year, respectively. The weighted-average discount rates for the Company's operating and financing leases are approximately 3.3% and 1.3%, respectively.
The following is a summary of the Company's maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2022 $ 7,296  $ 72 
2023 3,879  — 
2024 2,886  — 
2025 2,808  — 
2026 1,210  — 
Thereafter 2,151  — 
Total Lease Payments $ 20,230  $ 72 
Less: Interest 1,434  — 
Total Lease Liability $ 18,796  $ 72 
These amounts exclude annual operating lease payments of $1.5 million per year through 2031, which represents legal binding lease payments for leases signed, but not yet commenced.