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Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases Leases
Lease Policies
The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term while lease liabilities represent the obligation to make lease payments arising from the lease. All leases with an expected term greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the present value of the lease payments unless the implicit rate in the lease is readily determinable. The incremental borrowing rate is determined considering factors such as the lease term, the Company’s credit standing and the economic environment of the location of the lease.
The lease term includes all non-cancellable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that the Company will exercise the option. Leases that have a term of 12 months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of a ROU asset or lease liability.
The Company classifies leases as finance leases when (i) there is a transfer of ownership of the underlying asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, (iii) the lease term is for the majority of the remaining economic life of the asset, or (iv) the present value of the lease payments and any residual value guarantee equals or substantially exceeds the fair value of the asset.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for finance leases is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis, but interest expense on the lease liability is recognized using the interest method which results in more expense during the early years of the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities for all classes of leased assets.
Leases
The Company has obligations under lease arrangements primarily for facilities, equipment and vehicles. These leases have original lease periods expiring between January 2021 and August 2039. For the year ended December 31, 2020 and 2019, the Company recorded lease expense of $6.6 million and $6.9 million, respectively, within Cost of sales, $0.7 million for both periods within Research, development and engineering expenses, $0.3 million for both periods within Selling, general and administrative expenses and less than $0.1 million for both periods within Interest expense in the Consolidated Statement of Operations.
The following table summarizes the components of lease expense:
(in thousands)For the Year Ended December 31,
20202019
Operating lease cost
$5,452 $5,472 
Finance lease cost:
Amortization of ROU asset208 170 
Interest expense48 49 
Short-term lease cost
410 492 
Variable lease cost
1,493 1,675 
Total lease cost$7,611 $7,858 
The following table presents supplemental cash flow information related to leases:
(in thousands)For the Year Ended December 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases$5,405 $5,181 
Operating cash flows paid for interest portion of finance leases48 49 
Financing cash flows paid for principal portion of finance leases195 152 
Right-of-use assets obtained in exchange for lease obligations
Operating leases
299 280 
Finance leases11 536 
As of December 31, 2020 and 2019, the weighted-average remaining lease term was 6.2 years and 6.7 years for operating leases and 3.8 years and 4.5 years for finance leases, respectively. The weighted-average discount rate was 7.1% and 7.2% for operating leases as of December 31, 2020 and 2019, respectively, and 6.7% and 6.8% for finance leases as of December 31, 2020 and 2019, respectively.
The following table presents supplemental balance sheet information related to leases:
(in thousands)As of December 31,
20202019
Operating lease ROU assets, net 1
$17,104 $20,677 
Operating lease liabilities, current 2
3,793 3,789 
Operating lease liabilities, non-current 3
14,156 17,679 
Total operating lease liabilities
$17,949 $21,468 
Finance lease ROU assets, net 1
$568 $777
Finance lease liabilities, current 2
200 195 
Finance lease liabilities, non-current 3
413 617 
Total finance lease liabilities
$613 $812 

1.    Included in Other noncurrent assets for operating leases and Property, plant and equipment, net for finance leases on the Consolidated Balance Sheets.
2.    Included in Other accrued liabilities for operating leases and Current maturities of long-term debt for finance leases on the Consolidated Balance Sheets.
3.    Included in Other noncurrent liabilities for operating leases and Long-term debt, net of current maturities for finance leases on the Consolidated Balance Sheets.
The following table presents maturity analysis of lease liabilities as of December 31, 2020:
(in thousands)
Year Ending December 31,Operating LeasesFinance Leases
2021$4,948 $245 
20224,788 177 
20233,283 103 
20241,813 84 
20251,851 81 
Thereafter5,548 4 
Total undiscounted lease payments
22,231 694 
Less: imputed interest
4,282 81 
Total lease liabilities
$17,949 $613 
Leases Leases
Lease Policies
The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term while lease liabilities represent the obligation to make lease payments arising from the lease. All leases with an expected term greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the present value of the lease payments unless the implicit rate in the lease is readily determinable. The incremental borrowing rate is determined considering factors such as the lease term, the Company’s credit standing and the economic environment of the location of the lease.
The lease term includes all non-cancellable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that the Company will exercise the option. Leases that have a term of 12 months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of a ROU asset or lease liability.
The Company classifies leases as finance leases when (i) there is a transfer of ownership of the underlying asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, (iii) the lease term is for the majority of the remaining economic life of the asset, or (iv) the present value of the lease payments and any residual value guarantee equals or substantially exceeds the fair value of the asset.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for finance leases is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis, but interest expense on the lease liability is recognized using the interest method which results in more expense during the early years of the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities for all classes of leased assets.
Leases
The Company has obligations under lease arrangements primarily for facilities, equipment and vehicles. These leases have original lease periods expiring between January 2021 and August 2039. For the year ended December 31, 2020 and 2019, the Company recorded lease expense of $6.6 million and $6.9 million, respectively, within Cost of sales, $0.7 million for both periods within Research, development and engineering expenses, $0.3 million for both periods within Selling, general and administrative expenses and less than $0.1 million for both periods within Interest expense in the Consolidated Statement of Operations.
The following table summarizes the components of lease expense:
(in thousands)For the Year Ended December 31,
20202019
Operating lease cost
$5,452 $5,472 
Finance lease cost:
Amortization of ROU asset208 170 
Interest expense48 49 
Short-term lease cost
410 492 
Variable lease cost
1,493 1,675 
Total lease cost$7,611 $7,858 
The following table presents supplemental cash flow information related to leases:
(in thousands)For the Year Ended December 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases$5,405 $5,181 
Operating cash flows paid for interest portion of finance leases48 49 
Financing cash flows paid for principal portion of finance leases195 152 
Right-of-use assets obtained in exchange for lease obligations
Operating leases
299 280 
Finance leases11 536 
As of December 31, 2020 and 2019, the weighted-average remaining lease term was 6.2 years and 6.7 years for operating leases and 3.8 years and 4.5 years for finance leases, respectively. The weighted-average discount rate was 7.1% and 7.2% for operating leases as of December 31, 2020 and 2019, respectively, and 6.7% and 6.8% for finance leases as of December 31, 2020 and 2019, respectively.
The following table presents supplemental balance sheet information related to leases:
(in thousands)As of December 31,
20202019
Operating lease ROU assets, net 1
$17,104 $20,677 
Operating lease liabilities, current 2
3,793 3,789 
Operating lease liabilities, non-current 3
14,156 17,679 
Total operating lease liabilities
$17,949 $21,468 
Finance lease ROU assets, net 1
$568 $777
Finance lease liabilities, current 2
200 195 
Finance lease liabilities, non-current 3
413 617 
Total finance lease liabilities
$613 $812 

1.    Included in Other noncurrent assets for operating leases and Property, plant and equipment, net for finance leases on the Consolidated Balance Sheets.
2.    Included in Other accrued liabilities for operating leases and Current maturities of long-term debt for finance leases on the Consolidated Balance Sheets.
3.    Included in Other noncurrent liabilities for operating leases and Long-term debt, net of current maturities for finance leases on the Consolidated Balance Sheets.
The following table presents maturity analysis of lease liabilities as of December 31, 2020:
(in thousands)
Year Ending December 31,Operating LeasesFinance Leases
2021$4,948 $245 
20224,788 177 
20233,283 103 
20241,813 84 
20251,851 81 
Thereafter5,548 4 
Total undiscounted lease payments
22,231 694 
Less: imputed interest
4,282 81 
Total lease liabilities
$17,949 $613