Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

9. Leases

The Company has operating leases for office and warehouse space and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2024.

Certain of the Company’s lease arrangements contain renewal provisions, exercisable at the Company's option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other leases are recorded on the balance sheet with right-of-use (“ROU”) assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using our incremental borrowing rate based on the information available at the lease commencement date. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $0.3 million for the period ending March 31, 2019 of which $0.1 million is included in cost of goods sold and $0.2 million is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Information related to leases:

Operating lease cost	$	290
Operating lease - cash flow	$	284
Weighted-average remaining lease term		3.3 years
Weighted-average discount rate		5	%

Future minimum lease payments under non-cancellable leases as of March 31, 2019 (in 000’s):

2019 (remaining)	$	819
2020		928
2021		573
2022		279
2023		255
Thereafter		64
Total future minimum lease payments	$	2,918
Less: imputed interest		(238	)
Present value of lease liabilities	$	2,680

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments.