XML 33 R18.htm IDEA: XBRL DOCUMENT

LEASES

12 Months Ended

Dec. 31, 2020

LEASES As of December 31, 2020, the Company has non-cancelable operating leases for its offices and certain office equipment. The Company has the right to renew the term of the Lake Forest lease for one period of five years, provided that written notice is made to the Landlord no later than twelve months prior to the expiration of the initial term of the lease which is on December 31, 2023. In connection with the Zyla Merger, the company assumed an operating lease for offices in Wayne, Pennsylvania. The Wayne, Pennsylvania office lease terminates in 2022 and will not be renewed.

The Company relocated its corporate headquarters from Newark, CA to Lake Forest, Illinois in 2018 and subsequently entered into two subleases which, together, account for the entirety of the Newark facility. Each sublease contains abated rent periods resulting in reduced operating lease cash flows through May 2019. Operating lease costs and sublease income related to the Newark facility are accounted for in Other (loss) gain in the Consolidated Statements of Comprehensive Income.

In connection with the December 2020 restructuring plan, the Company’s operating leases for its automobiles used by its sales force were terminated early and the Wayne, Pennsylvania office lease assets was determined to be no longer be in use and abandoned. The Company recognized a charge of $0.7 million to write off the Wayne, Pennsylvania office and automobile lease right-of-use assets, which is included in restructuring charges in the Company’s Consolidated Statements of Comprehensive Income for the year ended December 31, 2020.

The following table reflects lease expense for the years ended December 31, 2020 and 2019 (in thousands):


		Year ended December 31, 2020		Year ended December 31, 2019
	Financial Statement Classification
Operating lease cost	Selling, general and administrative expenses	$	1,760	$	718
Operating lease cost	Other (loss) gain	1,391		591
Total lease cost		$	3,151	$	1,309

Sublease Income	Other (loss) gain	$	2,236	$	1,386

The following table reflects supplemental cash flow information related to leases for the years ended December 31, 2020 and 2019 (in thousands):


	Year ended December 31, 2020		Year ended December 31, 2019

Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	3,004	$	2,446

The following table reflects supplemental balance sheet information related to leases as of December 31, 2020 and 2019 (in thousands):


	Financial Statement Classification	December 31, 2020		December 31, 2019
Assets
Operating lease right-of-use assets	Other long-term assets	$	2,347	$	2,776
Liabilities
Current operating lease liabilities	Other current liabilities	$	2,683	$	2,094
Noncurrent operating lease liabilities	Other long term liabilities	2,815		4,820
Total lease liabilities		$	5,498	$	6,914

Future undiscounted cash flows to be received from subleases is expected to be approximately $1.5 million on an annual basis for the years ended December 31, 2021 and 2022.

The following table reflects other lease information as of December 31, 2020 and 2019:


	December 31, 2020		December 31, 2019
Weighted-average remaining lease term (years):
Operating leases	2.2		3.2
Weighted-average discount rate:
Operating leases	6.3	%	6.0	%

The following table reflects future minimum lease payments under the Company’s non-cancelable operating leases as of December 31, 2020 (in thousands):


	Lease Payments
2021	2,917
2022	2,308
2023	632
Thereafter	—
Total lease payments	$	5,857
Less: Interest	359
Present value of lease liabilities	$	5,498

LEASES