Leases

6 Months Ended

Dec. 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 December 31, 2020 and June 30, 2020.

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 December 31, 2020 and June 30, 2020:


Operating leases	Balance Sheet location	December 31, 2020		June 30, 2020
		(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	21,458	$	23,581
Current operating lease liabilities	Accrued expenses and other current liabilities	4,395		4,476
Long-term operating lease liabilities	Other long-term liabilities	18,712		20,760

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 quarters and six months ended December 31, 2020 and 2019. Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.


	Quarter ended December 31,				Six months ended December 31,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Operating lease cost	$	1,332	$	1,562	$	2,687	$	3,164
Variable lease cost	273		281		583		530
	$	1,605	$	1,843	$	3,270	$	3,694

Supplemental cash flow information related to the Company's operating leases for the quarter and six months ended December 31, 2020 and 2019 are presented in the table below:


	Six months ended
	December 31,
		2020		2019
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities		$	2,602	$	2,607
Right-of-use assets obtained in exchange for lease obligations		—		1,533

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


	December 31, 2020
Weighted-average remaining lease term	5.62 years
Weighted-average discount rate	4.1	%

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


	Operating leases
	(in thousands)
Remainder of 2021	$	2,645
2022	4,975
2023	4,672
2024	4,158
2025	3,256
Thereafter	5,990
Total future payments	25,696
Less: amounts representing interest	2,589
Present value of lease payments	$	23,107

Leases

The following table presents amounts recorded on the Condensed Consolidated Balance Sheet related to operating leases at December 31, 2020 and June 30, 2020:


Operating leases	Balance Sheet location	December 31, 2020		June 30, 2020
		(in thousands)
Operating lease right-of-use assets	Other non-current assets	$	21,458	$	23,581
Current operating lease liabilities	Accrued expenses and other current liabilities	4,395		4,476
Long-term operating lease liabilities	Other long-term liabilities	18,712		20,760


	Quarter ended December 31,				Six months ended December 31,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Operating lease cost	$	1,332	$	1,562	$	2,687	$	3,164
Variable lease cost	273		281		583		530
	$	1,605	$	1,843	$	3,270	$	3,694

Supplemental cash flow information related to the Company's operating leases for the quarter and six months ended December 31, 2020 and 2019 are presented in the table below:


	Six months ended
	December 31,
		2020		2019
	(in thousands)
Cash paid for amounts in the measurement of lease liabilities		$	2,602	$	2,607
Right-of-use assets obtained in exchange for lease obligations		—		1,533

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


	December 31, 2020
Weighted-average remaining lease term	5.62 years
Weighted-average discount rate	4.1	%

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


	Operating leases
	(in thousands)
Remainder of 2021	$	2,645
2022	4,975
2023	4,672
2024	4,158
2025	3,256
Thereafter	5,990
Total future payments	25,696
Less: amounts representing interest	2,589
Present value of lease payments	$	23,107