Leases

3 Months Ended

Jun. 30, 2020

The Company has operating leases for the use of real estate, machinery, and office equipment. The majority of our leases have a lease term of 2 to 5 years; however, we have certain leases with longer terms of up to 30 years. Many of our leases include options to extend the lease for an additional period.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor that is considered likely to be exercised.

Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. Variable payments are typically operating costs associated with the underlying asset and are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Our leases do not contain residual value guarantees.

The Company has elected to combine lease and non-lease components as a single component and not to recognize leases on the balance sheet with an initial term of one year or less.

The interest rate implicit in lease contracts is typically not readily determinable, and as such the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The components of lease cost for the quarters ended are as follows (in thousands):


	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019
Operating lease cost	571		406
Short-term lease cost	62		204
Variable lease cost	75		100
Sublease income	—		—
Total lease cost	$	708	$	710

Amounts reported in the condensed consolidated balance sheets for leases where we are the lessee as of June 30, 2020 and March 31, 2020 were as follows (in thousands):


	June 30, 2020			March 31, 2020
Operating leases
Operating lease right-of-use assets	$	7,851		$	8,116
Operating lease liabilities	8,433			8,647

Weighted-average remaining lease term
Operating leases	14 years, 5 months			14 years, 4 months

Weighted-average discount rate
Operating leases	4.30		%	4.50		%

Maturities of lease liabilities under non-cancellable leases where we are the lessee as of the quarter ended June 30, 2020 are as follows (in thousands):


			Operating Leases
2021 (excluding the three months ended June 30, 2020)			1,268
2022			1,594
2023			1,412
2024			1,041
2025			748
2026			537
Thereafter			5,852
Total undiscounted lease payments			12,452
Less: Interest			(3,458)
Less: Discount			(561)
Total lease liabilities			8,433