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Leases

6 Months Ended

Jun. 30, 2019

The Company adopted ASU No. 2016-02, Leases (Topic 842) on January 1, 2019 and applied the modified retrospective approach to adoption whereby the standard is applied only to the current period. The Company leases various manufacturing facilities, office facilities and equipment under operating and finance leases. We determine if an arrangement is a lease at inception. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Certain of our leases include variable lease payments, mainly when a lease is tied to an index rate. These variable lease payments are recorded as expense in the period incurred and are not material.

The Company has lease agreements with lease and non-lease components, which we account for separately. For certain equipment leases, we apply a portfolio approach to efficiently account for the operating lease ROU assets and lease liabilities. We also elected the short-term lease exemption and do not recognize leases with terms less than one year on the balance sheet. The related short-term lease expense is not material.

Our leases have remaining lease terms of one year to twelve years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. We only account for such extensions or early terminations when it is reasonably certain we will exercise such options.

Lease costs consists of the following:



	Three Months Ended June 30,		Six Months Ended June 30,
	2019		2019
Operating lease cost	$	1,986	$	3,971
Finance lease cost:
Depreciation	54		107
Interest on lease liabilities	6		13
Total finance lease cost	60		120
Total lease cost	$	2,046	$	4,091

Supplemental balance sheet information related to leases is as follows:



	June 30, 2019
Operating leases
Other assets (net of lease impairment of $1,131)	$	14,936

Other current liabilities	$	6,215
Other long-term liabilities	10,217
Total operating lease liabilities	$	16,432

Finance leases
Property, plant and equipment, gross	$	1,182
Accumulated depreciation	(363		)
Property, plant and equipment, net	$	819

Current portion of long-term debt	$	265
Long-term debt	243
Total finance lease liabilities	$	508


Weighted average remaining lease term (in years)
Operating leases	3.75 years
Finance leases	3.87 years

Weighted average discount rate
Operating leases	4.41		%
Finance leases	4.91		%

Supplemental cash flow information related to leases was as follows:



	Six Months Ended June 30,
	2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,268
Financing cash flows from finance leases	162

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	849
Finance leases	52

Maturities of lease liabilities as of June 30, 2019 are as follows:



	Finance Lease			Operating Lease

Remaining, 2019	$	180		$	3,972
2020	234			5,075
2021	35			3,214
2022	88			2,499
2023	5			1,578
2024	—			723
Thereafter	—			771
Total lease payments	542			17,832

Less imputed interest	(34		)	(1,400		)

Total lease liabilities	$	508		$	16,432

As of June 30, 2019, we have no additional operating or finance leases that have not yet commenced. Maturities of lease liabilities under ASC 840 are consistent with the above disclosure.

The Company places certain of our capital equipment with customers on a loaned basis and at no charge in exchange for commitments to purchase related single-use products over time periods generally ranging from one to three years. Placed equipment is loaned and subject to return if minimum single-use purchases are not met. The Company accounts for these placements as operating leases but applies a practical expedient and does not separate the nonlease and lease components from the combined component. Accordingly, the Company accounts for the combined component as a single performance obligation with revenue recognized upon shipment of the related single use-products. The cost of the equipment is amortized over its estimated useful life which is generally five years.

Leases

Lease costs consists of the following:



	Three Months Ended June 30,		Six Months Ended June 30,
	2019		2019
Operating lease cost	$	1,986	$	3,971
Finance lease cost:
Depreciation	54		107
Interest on lease liabilities	6		13
Total finance lease cost	60		120
Total lease cost	$	2,046	$	4,091

Supplemental balance sheet information related to leases is as follows:



	June 30, 2019
Operating leases
Other assets (net of lease impairment of $1,131)	$	14,936

Other current liabilities	$	6,215
Other long-term liabilities	10,217
Total operating lease liabilities	$	16,432

Finance leases
Property, plant and equipment, gross	$	1,182
Accumulated depreciation	(363		)
Property, plant and equipment, net	$	819

Current portion of long-term debt	$	265
Long-term debt	243
Total finance lease liabilities	$	508


Weighted average remaining lease term (in years)
Operating leases	3.75 years
Finance leases	3.87 years

Weighted average discount rate
Operating leases	4.41		%
Finance leases	4.91		%

Supplemental cash flow information related to leases was as follows:



	Six Months Ended June 30,
	2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,268
Financing cash flows from finance leases	162

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	849
Finance leases	52

Maturities of lease liabilities as of June 30, 2019 are as follows:



	Finance Lease			Operating Lease

Remaining, 2019	$	180		$	3,972
2020	234			5,075
2021	35			3,214
2022	88			2,499
2023	5			1,578
2024	—			723
Thereafter	—			771
Total lease payments	542			17,832

Less imputed interest	(34		)	(1,400		)

Total lease liabilities	$	508		$	16,432

As of June 30, 2019, we have no additional operating or finance leases that have not yet commenced. Maturities of lease liabilities under ASC 840 are consistent with the above disclosure.

Leases

Lease costs consists of the following:



	Three Months Ended June 30,		Six Months Ended June 30,
	2019		2019
Operating lease cost	$	1,986	$	3,971
Finance lease cost:
Depreciation	54		107
Interest on lease liabilities	6		13
Total finance lease cost	60		120
Total lease cost	$	2,046	$	4,091

Supplemental balance sheet information related to leases is as follows:



	June 30, 2019
Operating leases
Other assets (net of lease impairment of $1,131)	$	14,936

Other current liabilities	$	6,215
Other long-term liabilities	10,217
Total operating lease liabilities	$	16,432

Finance leases
Property, plant and equipment, gross	$	1,182
Accumulated depreciation	(363		)
Property, plant and equipment, net	$	819

Current portion of long-term debt	$	265
Long-term debt	243
Total finance lease liabilities	$	508


Weighted average remaining lease term (in years)
Operating leases	3.75 years
Finance leases	3.87 years

Weighted average discount rate
Operating leases	4.41		%
Finance leases	4.91		%

Supplemental cash flow information related to leases was as follows:



	Six Months Ended June 30,
	2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,268
Financing cash flows from finance leases	162

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	849
Finance leases	52

Maturities of lease liabilities as of June 30, 2019 are as follows:



	Finance Lease			Operating Lease

Remaining, 2019	$	180		$	3,972
2020	234			5,075
2021	35			3,214
2022	88			2,499
2023	5			1,578
2024	—			723
Thereafter	—			771
Total lease payments	542			17,832

Less imputed interest	(34		)	(1,400		)

Total lease liabilities	$	508		$	16,432

As of June 30, 2019, we have no additional operating or finance leases that have not yet commenced. Maturities of lease liabilities under ASC 840 are consistent with the above disclosure.