Leases

9 Months Ended

Jan. 31, 2021

Leases

Leases

6. Leases

The Company leases office and warehouse facilities, distribution equipment and its fleet of vehicles. The Company’s leases have lease terms ranging from one to eleven years and generally contain renewal options for periods ranging from one to five years. The exercise of lease renewal options is typically at the Company’s sole discretion. The Company does not recognize right-of-use (“ROU”) assets or lease liabilities for renewal options unless it is determined that the Company is reasonably certain of exercising renewal options at lease inception. Certain of the Company’s equipment leases include options to purchase the leased property and residual value guarantees. Any residual value payment deemed probable is included in the Company’s lease liability. The Company’s lease agreements do not contain any material restrictive covenants.

The Company determines if an arrangement is a lease at inception and evaluates whether the lease meets the classification criteria of a finance or operating lease. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and long-term operating lease liabilities in the Condensed Consolidated Balance Sheets. Finance leases are included in property and equipment, current portion of long-term debt and long-term debt in the Condensed Consolidated Balance Sheets.  

Lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. For leases that do not provide an implicit rate, the Company uses its incremental borrowing rate in determining the present value of future payments. The Company determines its incremental borrowing rate based on the applicable lease terms and the current economic environment. Lease ROU assets also include any lease payments made in advance and excludes lease incentives and initial direct costs incurred. Some of the Company’s lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvements

funding or other lease concessions. Lease expense is recognized on a straight-line basis based on the fixed component over the lease term. Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs for leased facilities and vehicles and equipment, which are expensed as incurred.

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
	2021		2020		2021		2020
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	5,898	$	6,007	$	17,997	$	18,120
Interest on lease liabilities		2,748		3,300		8,673		10,089
Operating lease cost		10,601		10,646		31,930		31,555
Variable lease cost		3,197		3,311		9,329		9,924
Total lease cost	$	22,444	$	23,264	$	67,929	$	69,688

Operating lease cost, including variable lease cost, is included in selling, general and administrative expenses; amortization of finance ROU assets is included in depreciation and amortization; and interest on finance lease liabilities is included in interest expense in the Condensed Consolidated Statements of Operations and Comprehensive Income.

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
	January 31,
	2021		2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	32,208	$	30,976
Operating cash flows from finance leases		8,673		10,089
Financing cash flows from finance leases		22,662		17,971
Right-of-use assets obtained in exchange for lease obligations
Operating leases		27,918		32,042
Finance leases		22,408		39,379

Other information related to leases was as follows:

	January 31,			April 30,
	2021			2020
	(in thousands)
Finance leases included in property and equipment
Property and equipment	$	176,529		$	171,380
Accumulated depreciation		(49,717)			(41,737)
Property and equipment, net	$	126,812		$	129,643
Weighted-average remaining lease term (years)
Operating leases		4.8			4.9
Finance leases		3.5			3.6
Weighted-average discount rate
Operating leases		5.5	%		5.5	%
Finance leases		4.9	%		5.0	%

Future minimum lease payments under non-cancellable leases as of January 31, 2021 were as follows:

	Finance		Operating
Year Ending April 30,	(in thousands)
2021 (remaining three months)	$	11,216	$	10,494
2022		43,251		36,897
2023		34,553		30,224
2024		25,279		24,785
2025		14,296		17,423
Thereafter		9,387		23,445
Total lease payments		137,982		143,268
Less imputed interest		15,962		18,312
Total	$	122,020	$	124,956