Leases

9 Months Ended

Sep. 30, 2019

Leases

Leases

6. Leases

The Company has operating leases for manufacturing and upfit facilities, land and parking lots, warehousing space and certain equipment. The leases have remaining lease terms of less than one year to 16 years, some of which include options to extend the leases for up to 10 years. Such renewal options were not included in the determination of the lease term unless deemed reasonably certain of exercise. The discount rate used in measuring the lease liabilities is based on the Company’s interest rate on its secured Term Loan Credit Agreement. Certain of the Company’s leases contain escalating rental payments based on an index. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease Expense

The components of lease expense, which are included in Cost of sales and Selling, general and administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income, were as follows:

	Three Months Ended	Nine Months Ended
	September 30, 2019	September 30, 2019
Operating lease expense	$ 1,286	$ 3,562
Short term lease cost	$ 121	$ 317
Total lease cost	$ 1,407	$ 3,879

Cash Flow

Supplemental cash flow information related to leases is as follows:

	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$ 3,392
Non-cash lease expense - right-of-use assets	$ 2,679
Right-of-use assets obtained in exchange for operating lease obligations	$ 3,525

Balance Sheet

Supplemental balance sheet information related to leases is as follows:  

	September 30, 2019
Operating Leases
Operating lease right-of-use assets	$ 22,203
Other current liabilities	3,626
Operating lease liabilities	18,813
Total operating lease liabilities	$ 22,439
Weighted Average Remaining Lease Term
Operating leases	79	months
Weighted Average Discount Rate
Operating leases	5.37%

Lease Maturities

Maturities of leases were as follows:

Year ending December 31,	Operating Leases
2019 (excluding the nine months ended September 30, 2019)	$ 1,208
2020	4,616
2021	4,359
2022	4,046
2023	3,604
Thereafter	8,728
Total Lease Payments	26,561
Less: imputed interest	(4,122)
Total	$ 22,439

Related Party Leases

The Company entered into lease agreements at the time of the close of the Dejana acquisition with parties that are affiliated with the former owners of Dejana and remain affiliated with Dejana post - acquisition.  The related parties continue to own land and buildings where Dejana conducts business.  As of September 30, 2019, the Company had nine operating leases at Dejana upfitting and manufacturing facilities with related party affiliates. The Company incurred $534 and $1,602 of total rent expense to related parties in the three and nine months ended September 30, 2019, respectively.  As the Company makes monthly payments to the related parties, there are no amounts owed to the related parties at September 30, 2019.

ASC 840 Disclosure

As required in transition, the below summarizes the Company’s future minimum lease payments at December 31, 2018 under ASC 840:

		Related Party Leases		Third Party Leases		Total Leases
2019	$	2,250	$	2,009	$	4,259
2020		2,250		1,654		3,904
2021		2,250		1,364		3,614
2022		2,250		949		3,199
2023		2,130		574		2,704
Thereafter		4,410		1,500		5,910
Total lease obligations	$	15,540	$	8,050	$	23,590