LEASES

6 Months Ended

Jun. 30, 2021

Effective at the start of fiscal 2020, the Company adopted the provisions and expanded disclosure requirements described in Accounting Standards Codification (ASC) Topic 842, Leases. The Company adopted the standard using the prospective method. The Company has operating leases for real estate and equipment with an option to renew the leases for up to one month to five years. Some of the leases include the option to terminate the leases upon 30-days notice with a penalty. The Company’s leases have various remaining lease terms ranging from July 2021 to January 2027. The Company’s lease agreements may include renewal or termination options for varying periods that are generally at the Company's discretion. The Company’s lease terms only include those periods related to renewal options the Company believes are reasonably certain to exercise. The Company generally does not include these renewal options as it is not reasonably certain to renew at the lease commencement date. This determination is based on consideration of certain economic, strategic and other factors that the Company evaluates at lease commencement date and reevaluates throughout the lease term. Some leases also include options to terminate the leases and the Company only includes those periods beyond the termination date if it is reasonably certain not to exercise the termination option.

The Company uses a discount rate to calculate the right of use (“ROU”) asset and lease liability. When the implicit rate is known or provided in the lease documents, the Company is required to use this rate. In cases in which the implicit rate is not known, the Company uses an estimated incremental borrowing rate.

Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. The variable portion of lease payments is not included in the Company’s ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses recorded in selling and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.

The Company has lease agreements with both lease and non-lease components that are treated as a single lease component for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses.

The Company has elected to apply the short-term lease exception for all underlying asset classes. That is, leases with a term of 12 months or less are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. The Company’s leases do not include significant restrictions or covenants, and residual value guarantees are generally not included within its operating leases. As of June 30, 2021, the Company did not have any material additional operating leases that have not yet commenced.

The components of lease expense and supplemental balance sheet information were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating lease expense related to ROU assets and liabilities	$	1,546	$	1,548	$	3,100	$	3,047
Other lease expense	132		297		292		615
Total lease expense	$	1,678	$	1,845	$	3,392	$	3,662

Other information related to leases was as follows (in thousands):


Supplemental Balance Sheet Information	June 30, 2021		December 31, 2020
Operating lease right-of-use assets, noncurrent	$	15,772	$	17,521

	June 30, 2021		December 31, 2020
Operating lease liabilities, current	$	4,055	$	3,940
Operating lease liabilities, noncurrent	14,495		15,993
Total operating lease liabilities	$	18,550	$	19,933


Weighted Average Remaining Lease Term	Years
Operating leases	4.41
Weighted Average Discount Rate
Operating leases	10.5	%

Maturities of operating lease liabilities as of June 30, 2021 were as follows (in thousands):


Year ending June 30:
2022	$	5,774
2023	5,198
2024	4,489
2025	4,002
2026	2,402
Thereafter	1,443
Total future undiscounted lease payments	23,308
Less imputed interest	(4,758)
Total	$	18,550

For the three months ended June 30, 2021 and 2020, the Company paid $1.5 million and $1.5 million, respectively, for operating lease liabilities. For the six months ended June 30, 2021 and 2020, the Company paid $3.0 million and $3.0 million, respectively, for operating lease liabilities.