NOTE

— LEASES

The Company leases certain facilities and equipment. On

January 1, 2019,

the Company adopted ASU

2016

02,

Leases (“Topic

842”

) and ASU

2018

using the cumulative effect method and has elected to apply each available practical expedient. The adoption of Topic

842

resulted in the Company recognizing operating lease liabilities totaling

$19,508

with a corresponding right-of-use (“ROU”) asset of

$17,613

based on the present value of the minimum rental payments of such leases. The variance between the ROU asset balance and the lease liability is a deferred rent liability that existed prior to the adoption of Topic

842

and was offset against the ROU asset balance during the adoption. The discount rates used for leases accounted for under ASC

842

are based on an interest rate yield curve developed for the leases in the Company's lease portfolio.

The Company has elected to apply the short-term lease exception to all leases of

one

year or less. During the

nine

months ended

September 30, 2020

, the Company had an additional operating lease that resulted in right-of-use assets obtained in exchange for lease obligations of

$4,380.

Additionally, during the

three

and

nine

months ended

September 30, 2020

, the Company had additional finance leases that resulted in property, plant, and equipment obtained in exchange for lease obligations of

$473

and

$2,253,

respectively.

Some of the Company's facility leases include options to renew. The exercise of the renewal options is typically at the Company's discretion. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them.

Quantitative information regarding the Company's leases is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Components of lease cost
Finance lease cost components:
Amortization of finance lease assets	$	150		$	139		$	435		$	411
Interest on finance lease liabilities		64			27			139			81
Total finance lease costs		214			166			574			492
Operating lease cost components:
Operating lease cost		764			724			2,340			2,265
Short-term lease cost		196			166			483			470
Variable lease cost (1)		198			185			586			570
Sublease income		(45	)		(32	)		(136	)		(120	)
Total operating lease costs		1,113			1,043			3,273			3,185

Total lease cost	$	1,327		$	1,209		$	3,847		$	3,677

Supplemental cash flow information related to our operating leases is as follows for the nine months ended September 30, 2020 and 2019:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases							$	2,638		$	2,626

Weighted-average remaining lease term-finance leases at end of period (in years)								1.7			1.1
Weighted-average remaining lease term-operating leases at end of period (in years)								10.2			10.8
Weighted-average discount rate-finance leases at end of period								8.9	%		8.7	%
Weighted-average discount rate-operating leases at end of period								8.9	%		9.0	%

(

)

Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company's leased facilities and equipment.

As of

September 30, 2020

, future minimum lease payments under finance leases and operating leases were as follows:

	Finance			Operating
	Leases			Leases			Total
2020	$	359		$	877		$	1,236
2021		1,424			3,387			4,811
2022		1,100			2,902			4,002
2023		451			2,883			3,334
2024		31			2,906			2,937
2025 and thereafter		4			20,119			20,123
Total lease payments		3,369			33,074			36,443
Less—portion representing interest		(339	)		(11,957	)		(12,296	)
Present value of lease obligations		3,030			21,117			24,147
Less—current portion of lease obligations		(1,174	)		(1,588	)		(2,762	)
Long-term portion of lease obligations	$	1,856		$	19,529		$	21,385