Note 8 - Leases

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Lessee, Leases [Text Block]

NOTE

8

– LEASES

General

On

December 31, 2018,

the Company adopted the new lease standard using the transition methodology allowed by the standard to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative prior year periods presented in these financial statements continue to be in accordance with previous GAAP. We have operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. Our leases have terms ranging from

1

to

20

years, some of which

may

include options to extend the lease term for up to

5

years, and certain leases

may

include an option to terminate the lease. Our lease terms

may

include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

We record a right-of-use asset and lease liability for operating and finance leases once a contract that contains a lease is executed. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.

As of

March 31, 2019,

there are

no

significant right-of-use assets and lease obligations from leases that have

not

commenced as of the end of the

first

quarter.

The table below represents a summary of the balances recorded in the consolidated condensed balance sheet related to our leases as of

March 31, 2019:

	March 31, 2019
	(I n thousands )
Balance Sheet Location	Operating Leases		Finance Leases
Operating lease right-of-use assets	$	113,640
Current portion of operating lease liabilities	$	16,014
Operating lease liabilities		97,316
Total operating lease liabilities	$	113,330
Property and equipment			$	3,512
Accrued expenses			$	986
Other long-term liabilities				977
Total finance lease liabilities			$	1,963

Lease Costs

	Three Months Ended
	March 31, 2019
Lease cost	(In thousands)
Finance lease cost:
Amortization of right-of-use assets	$	146
Interest on lease liabilities		8
Operating lease cost		5,671
Short-term lease cost		738
Variable lease cost		145
Total lease cost	$	6,708
Other supplemental information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases		8
Operating cash flows from operating leases		5,110
Financing cash flows from finance leases		246
Right-of-use assets obtained in exchange for new finance lease liabilities		0
Right-of-use assets obtained in exchange for new operating lease liabilities		2,467
Weighted-average remaining lease term – finance leases (in years)		2.04
Weighted-average remaining lease term – operating leases (in years)		10.94
Weighted-average discount rate – finance leases		1.50	%
Weighted-average discount rate – operating leases		5.79	%

Maturity Analysis

Maturity analysis of lease payments under non-cancellable leases were as follows:

FISCAL YEAR	OPERATING LEASES			FINANCE LEASES
	(In thousands)
2019 (excluding first quarter of 2019)	$	16,482		$	756
2020		20,239			942
2021		15,854			294
2022		12,748			0
2023		10,833			0
Thereafter		82,454			0
Total future minimum lease payments (undiscounted)		158,610			1,992
Less: Present value discount		(45,280	)		(29	)
Total lease liability	$	113,330		$	1,963

At

December 30, 2018,

aggregate minimum rent commitments under operating leases with initial or remaining terms of

one

year or more consisted of the following:

FISCAL YEAR	AMOUNT
	(In thousands)
2019	$	26,113
2020		22,066
2021		16,453
2022		8,692
2023		5,186
Thereafter		15,237

Practical Expedients and

Policy Elections

The Company elected the package of practical expedients permitted under the transition guidance of the new lease standard, which, among other things, allows us to carryforward the historical lease classification and

not

reassess any initial direct costs for existing leases. In addition, we elected the hindsight practical expedient to determine the lease term, which allows us to use hindsight when considering the impact of options to extend or terminate a lease as well as the option to purchase the underlying asset. We also made an accounting policy election

not

to separate lease and non-lease components for all asset classes, except for data center assets, and will account for the lease payments as a single component.

We made an accounting policy election to exclude leases with an initial term of

12

months or less from the calculation of the right-of-use asset and lease liability recorded on the consolidated condensed balance sheet. These leases primarily represent month-to-month operating leases for vehicles and office equipment where we were reasonably certain that we would

not

elect an option to extend the lease.