Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

9. Leases

The Company has operating leases for office and warehouse space and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2024.

Certain of the Company’s lease arrangements contain renewal provisions, exercisable at the Company's option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other leases are recorded on the balance sheet with right-of-use (“ROU”) assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. As most of our leases do not provide an implicit rate, the present value of lease payments is determined primarily using our incremental borrowing rate based on the information available at the lease commencement date. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term. Operating lease cost was $0.3 million and $0.9 million for the three and nine-months ending September 30, 2019, respectively, For the three months ended September 30, 2019, $0.1 million is included in cost of goods sold and $0.2 million is included in selling, general and administrative expenses. For the nine months ended September 30, 2019, $0.3 million is included in cost of goods sold and $0.6 million is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Information related to leases (in 000’s):

	Three months ended		Nine months ended
	September 30, 2019		September 30, 2019
Operating lease cost	$	275	$	856
Operating lease - cash flow	$	270	$	840

	September 30, 2019
Weighted-average remaining lease term		3.0 years
Weighted-average discount rate		5%

Future minimum lease payments under non-cancellable leases as of September 30, 2019:

2019 (remaining)	$	257
2020		897
2021		541
2022		266
2023		255
Thereafter		64
Total future minimum lease payments	$	2,280
Less: imputed interest		(150	)
Present value of lease liabilities	$	2,130