LEASES

3 Months Ended

Jun. 30, 2020

The Company determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the duration of the lease term. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. ROU assets are recorded and recognized at commencement for the lease liability amount, plus initial direct costs incurred less lease incentives received. Lease liabilities are recorded at the present value of future lease payments over the lease term at commencement. The discount rate used is generally the Company’s estimated incremental borrowing rate unless the lessor’s implicit rate is readily determinable. Incremental borrowing rates are calculated periodically to estimate the rate the Company would pay to borrow the funds necessary to obtain an asset of similar value over a similar term. Lease expenses relating to operating leases are recognized on a straight-line basis over the lease term.

The Company has operating leases for administrative, research and development, sales and marketing and manufacturing facilities and equipment under various non-cancelable lease agreements. The Company’s leases have remaining lease terms ranging from 1 year to 11 years. The Company’s lease terms may include options to extend or terminate the lease where it is reasonably certain that the Company will exercise those options. The Company considers several economic factors when making this determination, including but not limited to, the significance of leasehold improvements incurred in the office space, the difficulty in replacing the asset, underlying contractual obligations, or specific characteristics unique to a particular lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Most of the Company’s lease agreements contain variable payments, primarily for common area maintenance (CAM), which are expensed as incurred and not included in the measurement of the ROU assets and lease liabilities.

The components of operating lease cost for the three months ended June 30, 2020 and 2019 were as follows (in thousands):


	Three Months Ended		Three Months Ended
	June 30, 2020		June 30, 2019
Lease cost under long-term operating leases	$	3,262	$	3,245
Lease cost under short-term operating leases	813		852
Variable lease cost under short-term and long-term operating leases	882		1,212
Total operating lease cost	$	4,957	$	5,309

The table below presents supplemental cash flow information related to leases during the three months ended June 30, 2020 and 2019 (in thousands):


	June 30, 2020		June 30, 2019
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,794	$	1,827

At June 30, 2020 and March 31, 2020, the weighted average remaining lease term in years and weighted average discount rate were as follows:


	June 30, 2020		March 31, 2020
Weighted average remaining lease term in years - operating leases	8.28		8.59

Weighted average discount rate - operating leases	4.1	%	4.1	%

Future minimum payments under non-cancellable leases at June 30, 2020 are as follows (in thousands):


Year ending March 31:
2021 (remaining nine months)	$	9,556
2022	14,403
2023	12,269
2024	10,194
2025	10,040
Thereafter	38,322
Total lease payments	$	94,784
Less imputed interest	(14,403)
Present value of lease liabilities	$	80,381