Lease Obligations

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Lease Obligations

Lease ObligationsFrom time-to-time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to six years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At September 30, 2020, the Company had several leases with residual value guarantees, due to the acquisition of CSI. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease.

The following is a summary of the lease-related assets and liabilities recorded:

	​	September 30, 2020		December 31, 2019
(in thousands)	Classification on the Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	22,620	$	22,958
Finance lease right-of-use assets	Property and equipment, net of accumulated depreciation	664		1,478
Total right-of-use lease assets		$	23,284	$	24,436
Liabilities
Current
Operating lease obligations	Current portion of operating lease obligations	$	6,468	$	6,205
Finance lease obligations	Current portion of finance lease obligations	607		1,135
Total current obligations		7,075		7,340
Non-current
Operating lease obligations	Operating lease obligations, net of current maturities	16,230		16,884
Finance lease obligations	Finance lease obligations, net of current maturities	—		338
Total non-current obligations		16,230		17,222
Total lease obligations		$	23,305	$	24,562

The following is a summary of the lease terms and discount rates:

​	September 30, 2020		December 31, 2019
Weighted-average remaining lease term - finance leases	0.6 years		1.4 years
Weighted-average remaining lease term - operating leases	3.5 years		3.9 years
Weighted-average discount rate - finance leases	2.5	%	2.5	%
Weighted-average discount rate - operating leases	3.9	%	3.8	%

The following is a summary of certain information related to the lease costs for finance and operating leases:

(in thousands)	Three months ended September 30,				Nine months ended September 30,
​	2020		2019		2020		2019
Lease cost:					​		​
Finance lease cost:					​		​
Amortization of right-of-use assets	$	240	$	273	$	737	$	820
Interest on lease liabilities	7		16		27		53
Operating lease cost	2,327		2,055		6,875		5,016
Short-term lease cost	—		—		—		8
Variable lease costs	106		67		259		198
Total lease cost	$	2,680	$	2,411	$	7,898	$	6,095

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

​	Nine months ended September 30,
(in thousands)	2020		2019
Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,676	$	5,064
Right-of-use asset obtained in exchange for new operating lease obligations	$	5,592	$	11,374

The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under financial leases, less interest, and under operating leases, less imputed interest, as of September 30, 2020 were as follows:

(in thousands)	Finance Lease Obligations		Operating Lease Obligations		Total Lease Obligations
Remainder of 2020	$	289	$	2,394	$	2,683
2021	326		8,449		8,775
2022	—		6,988		6,988
2023	—		5,048		5,048
2024	—		2,491		2,491
2025	—		976		976
Thereafter	—		795		795
Total minimum lease payments	615		27,141		27,756
Financing component	(8)		(4,443)		(4,451)
Net present value of minimum lease payments	607		22,698		23,305
Less: current portion of finance and operating lease obligations	(607)		(6,468)		(7,075)
Long-term finance and operating lease obligations	$	—	$	16,230	$	16,230

The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at market rental rates. As of September 30, 2020, the minimum lease payments required under these leases totaled $3.6 million, which are due over the next 3.8 years.

Lease Obligations

Lease ObligationsFrom time-to-time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to six years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At September 30, 2020, the Company had several leases with residual value guarantees, due to the acquisition of CSI. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease.

The following is a summary of the lease-related assets and liabilities recorded:

	​	September 30, 2020		December 31, 2019
(in thousands)	Classification on the Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	22,620	$	22,958
Finance lease right-of-use assets	Property and equipment, net of accumulated depreciation	664		1,478
Total right-of-use lease assets		$	23,284	$	24,436
Liabilities
Current
Operating lease obligations	Current portion of operating lease obligations	$	6,468	$	6,205
Finance lease obligations	Current portion of finance lease obligations	607		1,135
Total current obligations		7,075		7,340
Non-current
Operating lease obligations	Operating lease obligations, net of current maturities	16,230		16,884
Finance lease obligations	Finance lease obligations, net of current maturities	—		338
Total non-current obligations		16,230		17,222
Total lease obligations		$	23,305	$	24,562

The following is a summary of the lease terms and discount rates:

​	September 30, 2020		December 31, 2019
Weighted-average remaining lease term - finance leases	0.6 years		1.4 years
Weighted-average remaining lease term - operating leases	3.5 years		3.9 years
Weighted-average discount rate - finance leases	2.5	%	2.5	%
Weighted-average discount rate - operating leases	3.9	%	3.8	%

The following is a summary of certain information related to the lease costs for finance and operating leases:

(in thousands)	Three months ended September 30,				Nine months ended September 30,
​	2020		2019		2020		2019
Lease cost:					​		​
Finance lease cost:					​		​
Amortization of right-of-use assets	$	240	$	273	$	737	$	820
Interest on lease liabilities	7		16		27		53
Operating lease cost	2,327		2,055		6,875		5,016
Short-term lease cost	—		—		—		8
Variable lease costs	106		67		259		198
Total lease cost	$	2,680	$	2,411	$	7,898	$	6,095

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

​	Nine months ended September 30,
(in thousands)	2020		2019
Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,676	$	5,064
Right-of-use asset obtained in exchange for new operating lease obligations	$	5,592	$	11,374

The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under financial leases, less interest, and under operating leases, less imputed interest, as of September 30, 2020 were as follows:

(in thousands)	Finance Lease Obligations		Operating Lease Obligations		Total Lease Obligations
Remainder of 2020	$	289	$	2,394	$	2,683
2021	326		8,449		8,775
2022	—		6,988		6,988
2023	—		5,048		5,048
2024	—		2,491		2,491
2025	—		976		976
Thereafter	—		795		795
Total minimum lease payments	615		27,141		27,756
Financing component	(8)		(4,443)		(4,451)
Net present value of minimum lease payments	607		22,698		23,305
Less: current portion of finance and operating lease obligations	(607)		(6,468)		(7,075)
Long-term finance and operating lease obligations	$	—	$	16,230	$	16,230

The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at market rental rates. As of September 30, 2020, the minimum lease payments required under these leases totaled $3.6 million, which are due over the next 3.8 years.