Note 6 - Leases

The Company has various lease agreements with terms up to 11 years, including leases of buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. common area maintenance, charges, utilities and property taxes). The Company elected the package of practical expedients permitted under the transition guidance, which allows it to carry forward its historical lease classification, its assessment on whether a contract contains a lease, and its initial direct costs for any leases that existed prior to the adoption of the new standard. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of operations on a straight line basis over the lease term. The Company’s lease agreements do not contain any material residual value, guarantees or material restrictive covenants.

Operating leases are included in Right of use asset, Accrued expenses and other current liabilities, and Long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

Lease expense is included in selling, general and administrative expenses on the consolidated statements of operations.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2019.


Maturity of Lease Payments	December 31, 2019
(in thousands)

-2020		2,611
-2021		1,997
-2022		1,096
-2023		949
-Thereafter		3,851
Total undiscounted operating lease payments		10,504
Less imputed interest		(2,398)
Present value of operating lease liabilities	$	8,106

Balance Sheet Classification


Current lease liabilities (recorded in Accrued expenses and other current liabilities)	$	2,364
Long-term lease liabilities		5,742
Total operating lease liabilities	$	8,106

Other Information


Weighted-average remaining term for operating leases	5.77 years
Weighted-average discount rate for operating leases	8.74	%

Cash Flows

An initial right-of-use asset of $8.1 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Cash paid for amounts included in the present value of operating lease liabilities was $2.8 million during the year ended December 31, 2019 and is included in operating cash flows.

As previously disclosed in our December 31, 2018 Form 10-K and under the previous lease accounting standard, future commitments under operating leases are summarized as follows:


Years ended December 31,	Amount
(in thousands)
-2019	$	2,952
-2020		2,055
-2021		1,619
-2022		684
-2023		498
Thereafter		3,422
Total	$	11,230