On March 1, 2019, ASU No. 2016-02, "Leases (Topic 842)," was adopted by the Company using the modified retrospective approach. The Company adopted the package of practical expedients that allows companies to not reassess historical conclusions related to contracts that contain leases, existing lease classification, and initial direct costs. It did not adopt the hindsight practical expedient. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities, which totaled $2,227 and $2,243, respectively, on March 1, 2019. The standard did not materially affect the Company's consolidated financial position, results of operations, or cash flows, and did not have an impact on the Company's debt-covenant compliance. The new guidance was applied to all operating and capital leases at the date of initial application. Leases historically referred to as capital leases are now referred to as finance leases under the new guidance.

We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of, and to obtain substantially all of the economic benefit from, the use of the underlying asset. Some of our leases include both lease and non-lease components which are accounted for as a single lease component, as we have elected the practical expedient in ASU 842-10-15-37. Some of our operating lease agreements include variable lease costs, including taxes, common area maintenance, or increases in rental costs related to inflation. Such variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred. Lease expense is recorded in operating expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are considered short term leases and are not recorded on the balance sheet. The Company had no short term leases during the year ended February 28, 2021.

Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the present value of its lease payments over its respective lease term. When a borrowing rate is not explicitly available for a lease, our incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments. Operating lease payments are recognized on a straight-line basis over the lease term.

We have operating leases for office equipment, as well as offices, warehouses, and other facilities used for our operations. We also have finance leases comprised primarily of computer hardware and machinery and equipment. Our leases have remaining lease terms of less than 1 year to 10 years, some of which include renewal options. We consider these renewal options in determining the lease term used to establish our right-of-use assets and lease liabilities when it is determined that it is reasonably certain that the renewal option will be exercised.

Refer to the Consolidated Statements of Cash Flows for supplemental cash flow information related to leases.

On September 30, 2019, the Company, through its subsidiary Voxx German Holdings GmbH, executed a sale leaseback transaction, selling its real property in Pulheim, Germany to CLM S.A. RL (the “Purchaser”) for €10,920. Net proceeds received from the transaction were approximately $9,500 after transactional costs of $270 and repayment of the outstanding mortgage, which was $2,104 on September 30, 2019. The transaction qualified for sale leaseback accounting in accordance with ASC 842, “Leases.” Concurrently with the sale, the Company entered into an operating lease arrangement (“lease”) with the Purchaser for a small portion of the real property to continue to operate the combined Magnat/Klipsch sales office in Germany, with an initial lease term of five years. The Company recognized a gain related to the execution of the sale transaction of $4,057 for the year ended February 29, 2020, which is recorded in Other income (expense) on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The components of lease cost for the year ended February 28, 2021 were as follows:

	February 28, 2021		February 29, 2020
Operating lease cost (a) (c)	$	1,169	$	880
Finance lease cost:
Amortization of right of use assets (a)		596		684
Interest on lease liabilities (b)		28		47
Total finance lease cost	$	624	$	731

	February 28, 2021			February 29, 2020
Operating Leases
Operating lease, right of use assets	$	4,572		$	3,143
Total operating lease right of use assets	$	4,572		$	3,143
Accrued expenses and other current liabilities	$	1,119		$	784
Operating lease liabilities, less current portion		3,582			2,391
Total operating lease liabilities	$	4,701		$	3,175
Finance Leases
Property, plant and equipment, gross	$	2,503		$	2,503
Accumulated depreciation		(1,805	)		(1,209	)
Total finance lease right of use assets	$	698		$	1,294
Accrued expenses and other current liabilities	$	418		$	613
Finance lease liabilities, less current portion		302			720
Total finance lease liabilities	$	720		$	1,333
Weighted Average Remaining Lease Term
Operating leases	6.0 years			4.4 years
Finance leases	1.8 years			3.9 years
Weighted Average Discount Rate
Operating leases		4.49	%		5.98	%
Finance leases		3.87	%		3.87	%

At February 28, 2021, maturities of lease liabilities for each of the succeeding years were as follows:

	Operating Leases		Finance Leases
2022	$	1,299	$	428
2023		1,039		228
2024		759		79
2025		586		—
2026		425		—
Thereafter		1,168		—
Total lease payments		5,276		735
Less imputed interest		575		15
Total	$	4,701	$	720

As of February 28, 2021, the Company has not entered into any lease agreements that have not yet commenced.

Rental expense for the Company’s operating lease agreements and other rental agreements on a month-to-month basis was $883 for the year ended February 28, 2019.

The Company owns and occupies buildings as part of its operations. Certain space within these buildings may, from time to time, be leased to third parties from which the Company earns rental income as lessor. This leased space is recorded within property, plant and equipment and was not material to the Company's Consolidated Balance Sheet at February 28, 2021. Rental income earned by the Company for the years ended February 28, 2021, February 29, 2020, and February 28, 2019 was $739, $663, and $517, respectively, which is recorded within Other income (expense).