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Leasing Arrangements

3 Months Ended

Mar. 31, 2019

The Company leases real and personal property in the normal course of business under various operating leases and other insignificant finance leases, including non-cancelable and immaterial month-to-month agreements. We recognize rent expense on a straight-line basis over the lease term. During the three month period ended March 31, 2019, total lease cost was $1.2 million. During the three month period ended March 31, 2018, total lease cost under ASC 840 was $0.8 million.

The following table sets forth the Company’s lease cost components (in thousands):



	Three Months Ended March 31, 2019
Operating lease cost	$	1,152
Amortization of finance lease assets	46
Interest on finance lease liabilities	7
Short-term lease cost	10
Total lease cost (1)	$	1,215

(1) Of the total lease cost amount, $0.6 million is being reported in selling, general and administrative, $0.3 million in cost of sales and $0.3 million in research and development expenses within the Condensed Consolidated Statement of Comprehensive (Loss).

The following table sets forth the Company’s Supplemental cash flow information related to leases

(in thousands):



	Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,179
Operating cash flows from finance leases	5
Financing cash flows from finance leases	335

Right-of-use assets, net obtained in exchange for new lease obligations:
Operating lease liabilities	22,523
Finance lease liabilities	$	441

The following table sets forth the Company’s Supplemental balance sheet information related to leases (in thousands):



	March 31, 2019
Right-of-use assets, net:
Operating leases, gross	$	22,523
Accumulated amortization	550
Operating leases, net	$	21,973
Finance leases (included in "Other non-current assets"), gross	75
Accumulated depreciation	5
Finance leases (included in "Other non-current assets"), net	$	70
Total Right-of-use assets, net	$	22,043

Lease liabilities:
Current portion of Operating lease liability	$	2,238
Long-term Operating lease liability	21,480
Total Operating lease liability	$	23,718
Current portion of Finance lease (included in "Accrued expenses and other liabilities") liability	$	19
Long-term Finance lease (included in "Pension obligations and other liabilities") liability	48
Total Finance lease liability	$	67
Total Lease liabilities	$	23,785

The following table sets forth the Company’s Weighted-average lease terms and discount rates (lease term in years):



	March 31, 2019
Weighted-average remaining lease terms:
Operating leases	8.92
Finance leases	3.33

Weighted-average discount rates:
Operating leases	10.01	%
Finance leases	5.50	%

The following table sets forth the Company’s scheduled maturities of lease liabilities as of March 31, 2019 (in thousands):



Year ending December 31,	Operating leases		Finance leases
2019 (last nine months of 2019)	$	3,332	$	16
2020	4,531		22
2021	4,357		22
2022	3,990		13
2023	3,323		—
2024 and thereafter	17,294		—
Total lease payments (1)	$	36,827	$	73
Less: Imputed interest	$	13,109	$	6
Total lease liabilities	$	23,718	$	67

(1) Under ASC 842, the Company is required to take into consideration contractual lease renewal options that are reasonably assured to be exercised when determining the lease liability at transition. As of March 31, 2019, the Company has approximately $11 million of reasonably assured renewal option payments included in the total lease payments.

The following table sets forth the Company’s scheduled of future minimum rental payments for operating leases under ASC 840 as of December 31, 2018 (in thousands):



Year ending December 31,	Operating leases
2019	$	4,564
2020	4,647
2021	4,283
2022	3,724
2023	2,673
2024 and thereafter	6,976
Total lease payments	$	26,867

Leasing Arrangements