Note 12 — Leases We lease automobiles, machinery, equipment, and warehouse and office buildings. We account for these leases in accordance with ASC 842 by recording right-of-use assets and lease liabilities. The right-of-use asset represents our right to use underlying assets for the lease term and the lease liability represents our obligation to make lease payments under the leases. We determine if an arrangement is or contains a lease at contract inception and exercise judgment and apply certain assumptions when determining the discount rate, lease term, and lease payments. ASC 842 requires a lessee to record a lease liability based on the discounted unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, the incremental borrowing rate. Generally, we do not have knowledge of the rate implicit in the lease and, therefore, we use the incremental borrowing rate for a lease. The lease term includes the non-cancelable period of the lease plus any additional periods covered by an option to extend that we are reasonably certain to exercise. Operating leases and finance leases are included in the condensed consolidated balance sheets as follows:
|
|
|
|
|
|
|
|
|
Classification |
|
September 30, 2021 |
|
Lease assets |
|
|
|
|
|
Operating lease right-of-use assets, net |
|
Assets |
|
$ |
6.8 |
|
Finance lease right of use assets, net |
|
Property, plant, and equipment, net |
|
|
1.6 |
|
Total lease assets |
|
|
|
$ |
8.4 |
|
Lease liabilities |
|
|
|
|
|
Operating lease liabilities, current |
|
Current liabilities |
|
$ |
2.4 |
|
Operating lease liabilities, non-current |
|
Liabilities |
|
|
4.4 |
|
Finance lease liabilities, current |
|
Current portion of long-term debt |
|
|
0.6 |
|
Finance lease liabilities, non-current |
|
Long-term debt |
|
|
1.0 |
|
Total lease liabilities |
|
|
|
$ |
8.4 |
|
The components of lease costs, which are included in income from operations in our condensed consolidated statements of operations and comprehensive income (loss), were as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2021 |
|
Operating leases |
|
|
|
|
|
|
Operating lease costs |
|
$ |
0.7 |
|
|
$ |
2.1 |
|
Variable lease costs |
|
|
0.1 |
|
|
|
0.2 |
|
Total operating lease costs |
|
$ |
0.8 |
|
|
$ |
2.3 |
|
Finance leases |
|
|
|
|
|
|
Amortization of right-of-use asset |
|
$ |
0.2 |
|
|
$ |
0.4 |
|
Interest on finance lease liabilities |
|
|
- |
|
|
|
- |
|
Total finance lease costs |
|
$ |
0.2 |
|
|
$ |
0.4 |
|
Under ASC 840, rental expense was $0.6 million and $1.6 million in the three and nine months ended September 30, 2020. Maturities of lease liabilities as of September 30, 2021 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
|
Finance |
|
|
Total |
|
2021 |
|
$ |
0.7 |
|
|
$ |
0.2 |
|
|
$ |
0.9 |
|
2022 |
|
|
2.5 |
|
|
|
0.6 |
|
|
|
3.1 |
|
2023 |
|
|
1.7 |
|
|
|
0.4 |
|
|
|
2.1 |
|
2024 |
|
|
1.2 |
|
|
|
0.2 |
|
|
|
1.4 |
|
2025 |
|
|
1.0 |
|
|
|
0.1 |
|
|
|
1.1 |
|
2026 and Thereafter |
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.4 |
|
Total lease payments |
|
|
7.3 |
|
|
|
1.7 |
|
|
|
9.0 |
|
Less lease interest |
|
|
(0.5 |
) |
|
|
(0.1 |
) |
|
|
(0.6 |
) |
Total lease liabilities |
|
$ |
6.8 |
|
|
$ |
1.6 |
|
|
$ |
8.4 |
|
Minimum lease payments under ASC 840, as of December 31, 2020, were as follows:
|
|
|
|
|
Year Ended |
|
Amount |
|
2021 |
|
$ |
2.8 |
|
2022 |
|
|
2.3 |
|
2023 |
|
|
1.4 |
|
2024 |
|
|
1.0 |
|
2025 |
|
|
0.8 |
|
Thereafter |
|
|
0.2 |
|
Total |
|
$ |
8.5 |
|
Additional information related to leases is presented as follows:
|
|
|
|
|
September 30, 2021 |
Operating leases |
|
|
Weighted average remaining lease term |
|
3.5 years |
Weighted average discount rate |
|
3.9% |
Finance leases |
|
|
Weighted average remaining lease term |
|
3.1 years |
Weighted average discount rate |
|
3.3% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2021 |
|
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
0.7 |
|
|
$ |
2.0 |
|
Operating cash flows from finance leases |
|
|
- |
|
|
|
- |
|
Financing cash flows from finance leases |
|
|
0.2 |
|
|
|
0.5 |
|
Total cash paid |
|
$ |
0.9 |
|
|
$ |
2.5 |
|
|
|
|
|
|
|
|
Leased assets obtained in exchange for new operating lease liabilities |
|
$ |
- |
|
|
$ |
8.6 |
|
Leased assets obtained in exchange for new finance lease liabilities |
|
|
0.1 |
|
|
|
2.1 |
|
ROU assets obtained in exchange for lease liabilities |
|
$ |
0.1 |
|
|
$ |
10.7 |
|
|