Commitments and Contingencies

Leases

We conduct the majority of our operations in leased facilities, all of which are accounted for as operating leases, as they do

not

meet the criteria for finance leases. Our principal worldwide executive, distribution, and manufacturing operations are located at

three

adjacent

27,098

square foot,

27,289

square foot and

15,642

square foot leased facilities, as well as a

fourth

nearby

12,878

square foot leased facility, in Burlington, Massachusetts. In

October 2019

we leased an additional

26,447

square foot building in the same area from the same landlord from whom we lease the other

four

buildings, and also extended the lease terms on the other

four

buildings. All

five

Burlington leases now expire in

December 2030.

October 2019

we also leased a

2,258

square foot facility in Hereford, England to house our United Kingdom sales and distribution business. In addition, our international operations are headquartered at a

16,470

square foot leased facility located in Sulzbach, Germany, including approximately

3,630

square feet added in

2019,

under a lease which expires in

August 2023.

This lease contains

two five

-year renewal options. We also have smaller long-term leased sales, marketing and other facilities located in Arizona, Japan, Canada, Australia, Singapore and China, and short-term leases in Italy, Spain and Illinois. Our lease in Canada contains a

five

-year renewal option exercisable in

February 2023.

Our leases in Germany and Australia are subject to periodic rent increases based on increases in the consumer price index as measured each

September

and

May,

respectively, with such increases applicable to the subsequent

twelve

months of lease payments.

None

of our noncancelable lease payments include non-lease components such as maintenance contracts; we generally reimburse the landlord for direct operating costs associated with the leased space. We have

subleases, and there are

residual value guarantees associated with, or restrictive covenants imposed by, any of our leases. There were

assets held under capital leases at

December 31, 2019.

We also lease automobiles under operating leases in the U.S. as well as certain of our international subsidiaries. The terms of these leases are generally

three

years, with older vehicles replaced by newer vehicles from time to time.

As discussed above under Recent Accounting Pronouncements, on

January 1, 2019

we adopted the provisions of ASU

No.

2016

02,

Leases (Topic

842

subsequently amended by ASU

2018

11,

Leases (Topic

842

): Targeted Improvements

. Under the new guidance, we are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

Our most significant judgment involved in determining the amounts to initially record as lease liabilities and right-of-use assets was the selection of a discount rate; because we have

debt we have

incremental borrowing rate to reference. We therefore estimated an incremental borrowing rate using quotes from potential lenders as the primary inputs, augmented by other available information. The resulting rate selected was

5.25%.

We determined that it was appropriate to apply this single rate to our portfolio of leases worldwide, as the lease terms and conditions are substantially similar, and because we believe our subsidiaries would be unable to obtain borrowings on their own without a commitment of parent company support.

Additional information with respect to our leases is as follows:

	Year ended
	December 31,
	2019
	(in thousands)

Lease cost
Operating lease cost	$	1,756
Short-term lease cost		291
Total lease cost	$	2,047

Other information
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,858

Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,571


Weighted average remaining lease term - operating leases (years)		8.3

Weighted average discount rate - operating leases		5.25	%

December 31, 2019,

the minimum noncancelable operating lease rental commitments with initial or remaining terms of more than

one

year are as follows:

Year ending December 31,
2020	$	2,419
2021		2,351
2022		1,942
2023		1,686
2024		1,573
Thereafter		10,301
Adjustment to net present value as of December 31, 2019		(4,560	)

Minimum noncancelable lease liability	$	15,712

Purchase Commitments

As part of our normal course of business, we have commitments to purchase

$1.5

million of inventory through

2019.

The purchase commitments for inventory are to be used in operations over the normal course of business and do

not

represent excess commitments or loss contracts.