Leases

9 Months Ended

Mar. 31, 2020

In accordance with ASC 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring in fiscal year 2022. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the financial statements at March 31, 2020 and June 30, 2019.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term. The Company generally is not able to determine the rate implicit in its leases and has elected to apply an incremental borrowing rate as the discount rate for the present value determination, which is based on the Company's cost of borrowings for the relevant terms of each lease and geographical economic factors. Certain operating lease agreements contain options to extend or terminate the lease. The lease term used is adjusted for these options when the Company is reasonably certain it will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred. Further, the Company has elected the practical expedient to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheet related to operating leases at March 31, 2020:



Operating leases	Balance Sheet location	March 31, 2020
		(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	30,196
Current operating lease liabilities	Accrued expenses and other current liabilities	$	5,805
Long-term operating lease liabilities	Other long-term liabilities	$	26,490

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarter and nine months ended March 31, 2020. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.



	Quarter ended		Nine months ended
	March 31, 2020		March 31, 2020
	(in thousands)
Operating lease cost	$	1,873	$	6,005
Variable lease cost	542		1,325
	$	2,415	$	7,330

Supplemental cash flow information related to the Company's operating leases for the quarter and nine months ended March 31, 2020 are presented in the table below:



	Quarter ended		Nine months ended
	March 31, 2020		March 31, 2020
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities	$	1,719	$	5,189
Right-of-use assets obtained in exchange for lease obligations	250		1,804

The weighted-average remaining lease term and discount rate at March 31, 2020 are presented in the table below:



	March 31, 2020
Weighted-average remaining lease term	6.27 years
Weighted-average discount rate	3.9	%

The following table presents the maturities of the Company's operating lease liabilities at March 31, 2020:



	Operating leases
	(in thousands)
Remainder of 2020	$	2,362
2021	7,828
2022	7,090
2023	5,574
2024	4,757
Thereafter	11,282
Total future payments	38,893
Less: amounts representing interest	6,598
Present value of lease payments	$	32,295

Leases

The following table presents amounts recorded on the Condensed Consolidated Balance Sheet related to operating leases at March 31, 2020:



Operating leases	Balance Sheet location	March 31, 2020
		(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	30,196
Current operating lease liabilities	Accrued expenses and other current liabilities	$	5,805
Long-term operating lease liabilities	Other long-term liabilities	$	26,490



	Quarter ended		Nine months ended
	March 31, 2020		March 31, 2020
	(in thousands)
Operating lease cost	$	1,873	$	6,005
Variable lease cost	542		1,325
	$	2,415	$	7,330

Supplemental cash flow information related to the Company's operating leases for the quarter and nine months ended March 31, 2020 are presented in the table below:



	Quarter ended		Nine months ended
	March 31, 2020		March 31, 2020
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities	$	1,719	$	5,189
Right-of-use assets obtained in exchange for lease obligations	250		1,804

The weighted-average remaining lease term and discount rate at March 31, 2020 are presented in the table below:



	March 31, 2020
Weighted-average remaining lease term	6.27 years
Weighted-average discount rate	3.9	%

The following table presents the maturities of the Company's operating lease liabilities at March 31, 2020:



	Operating leases
	(in thousands)
Remainder of 2020	$	2,362
2021	7,828
2022	7,090
2023	5,574
2024	4,757
Thereafter	11,282
Total future payments	38,893
Less: amounts representing interest	6,598
Present value of lease payments	$	32,295