The Company has operating leases for real estate including corporate offices, warehouse space, vehicles and certain office equipment.

At the inception of a contractual arrangement, the Company determines whether it contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use, or ROU, asset upon lease commencement. Operating lease assets and liabilities are recognized based on the present value of minimum lease payments over the lease term using an appropriate discount rate. ROU assets also include any lease payments made at or before lease commencement and any initial direct costs incurred and exclude any lease incentives received.

The discount rate used is the rate that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or lease do not contain an implicit

rate, the Company’s incremental borrowing rate is used as the discount rate. Discount rates are updated when there is a new lease or a modification to an existing lease, and the methodology is reassessed annually.

The Company records operating lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease ROU as long-term assets. Leases with an initial term of 12 months or less are not recognized on the consolidated balance sheet. Instead, the Company recognizes lease expense for such leases on a straight-line basis over the lease term. The Company have elected the practical expedient where lease agreements with lease and non-lease components are accounted for as a single lease component for all assets.

The Company adopted Topic 842 on April 1, 2019 using the optional transition method. As such, the disclosures required under Topic 842 are not presented for periods before the date of adoption. For the comparative period prior to adoption, the Company presents the disclosures which were previously required under Topic 840.

The Company elected the package of transitional practical expedients for leases existing prior to the adoption date. The Company did not reassess whether existing contracts are or contain leases, leases retained their historical lease classification and initial direct costs were not reassessed for capitalization under the new standard. Operating lease assets and operating lease liabilities were recognized based on the present value of minimum lease payments over the remaining lease term as of the adoption date.

The following table presents supplemental balance sheet information related to our operating leases:


(in $000's)	June 30, 2019
Assets
Operating lease right-of-use assets in other assets	$	13,234
Liabilities
Operating lease liabilities in other current liabilities		2,379
Operating lease liabilities in other long-term liabilities		11,286
Total operating lease liabilities	$	13,665

	For the Three Months Ended June 30,
(in $000's)		2019
Operating lease expense	$	1,100
Short-term lease expense		28
Total lease expense	$	1,128

The following table presents the weighted average remaining lease term and discount rate information related to our operating leases:

Under ASC Topic 840, Leases (“ASC 840”), the Company recognized rent expense on a straight-line basis over the term of the lease and recorded the difference between the amount charged to expense and the rent paid as prepaid rent or deferred rent liability. As of March 31, 2019, the amount of deferred rent was $0.3 million, which was subsequently reclassified as contra-asset against the ROU asset upon adoption of ASU No. 2016-02 on April 1, 2019.

	Future Operating Lease Payments
Fiscal Years Ended March 31,	(in $000's)
2020	$	2,180
2021		3,338
2022		2,853
2023		1,577
2024		1,440
Thereafter		3,644
Total minimum lease payments		15,032
Less: imputed interest		(1,367	)
Present value of operating lease liabilities		13,665

Minimum future lease payments previously disclosed under ASC 840 in our Annual Report on Form 10-K for the year ended March 31, 2019 were as follows:

	Operating Lease Payments
Fiscal Years Ended March 31,	(in $000s)
2020	$	3,398
2021		2,712
2022		2,000
2023		1,462
2024		1,414
Thereafter		3,288
Total minimum lease payments	$	14,274