LEASES

6 Months Ended

Jun. 30, 2019

The Company leases certain industrial spaces, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 5 years. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Leased assets obtained in exchange for new operating lease liabilities in the current period were not material.

Leased assets and liabilities included within the Condensed Consolidated Balance Sheets consist of the following (in thousands):



	Classification	June 30, 2019
Right-of-Use Assets
Operating	Other assets	$	12,562
Finance	Property, plant and equipment, net of depreciation	3,017
Total Leased ROU Assets		$	15,579
Liabilities
Current
Operating	Other accrued liabilities	$	3,870
Finance	Current portion of finance lease obligations	317
Noncurrent
Operating	Non-current liabilities	8,767
Finance	Finance lease obligations	544
Total lease liabilities		$	13,498

Lease costs included in the Condensed Consolidated Statements of Operations consist of the following (in thousands):



	Classification	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	1,126	$	2,198
Finance lease cost
Amortization of ROU leased assets	Depreciation and amortization	36		72
Interest on lease liabilities	Interest expense	17		35
Net lease cost		$	1,179	$	2,305

Maturity of the Company’s lease liabilities is as follows (in thousands):



	Operating Leases		Finance Leases		Total
2019 (remainder)	$	2,153	$	180	$	2,333
2020	3,621		361		3,982
2021	3,032		361		3,393
2022	1,797		30		1,827
2023	1,594		—		1,594
Thereafter	2,008		—		2,008
Total lease payments	$	14,205	$	932	$	15,137
Less: interest	1,568		71
Present value of lease payments	$	12,637	$	861

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Remaining lease term and discount rates are as follows:



	June 30, 2019
Weighted average remaining lease term (years)
Operating leases	4.6
Finance leases	2.6
Weighted average discount rate
Operating leases	5.16	%
Finance leases	6.16	%

Lease costs included in the Condensed Consolidated Statements of Cash Flows are as follows (in thousands):



	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,124
Operating cash flows from finance leases	$	35
Financing cash flows from finance leases	$	152

LEASES

Leased assets and liabilities included within the Condensed Consolidated Balance Sheets consist of the following (in thousands):



	Classification	June 30, 2019
Right-of-Use Assets
Operating	Other assets	$	12,562
Finance	Property, plant and equipment, net of depreciation	3,017
Total Leased ROU Assets		$	15,579
Liabilities
Current
Operating	Other accrued liabilities	$	3,870
Finance	Current portion of finance lease obligations	317
Noncurrent
Operating	Non-current liabilities	8,767
Finance	Finance lease obligations	544
Total lease liabilities		$	13,498

Lease costs included in the Condensed Consolidated Statements of Operations consist of the following (in thousands):



	Classification	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	1,126	$	2,198
Finance lease cost
Amortization of ROU leased assets	Depreciation and amortization	36		72
Interest on lease liabilities	Interest expense	17		35
Net lease cost		$	1,179	$	2,305

Maturity of the Company’s lease liabilities is as follows (in thousands):



	Operating Leases		Finance Leases		Total
2019 (remainder)	$	2,153	$	180	$	2,333
2020	3,621		361		3,982
2021	3,032		361		3,393
2022	1,797		30		1,827
2023	1,594		—		1,594
Thereafter	2,008		—		2,008
Total lease payments	$	14,205	$	932	$	15,137
Less: interest	1,568		71
Present value of lease payments	$	12,637	$	861



	June 30, 2019
Weighted average remaining lease term (years)
Operating leases	4.6
Finance leases	2.6
Weighted average discount rate
Operating leases	5.16	%
Finance leases	6.16	%

Lease costs included in the Condensed Consolidated Statements of Cash Flows are as follows (in thousands):



	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,124
Operating cash flows from finance leases	$	35
Financing cash flows from finance leases	$	152