LEASES

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

LEASES

LEASES

Effective January 1, 2019, the Company adopted ASC 842, "Leases" ("ASC 842"), as amended, which superseded lease accounting guidance under ASC 840, and requires most leases to be capitalized on the balance sheet as a right-of-use (“ROU”) asset and lease liability. The ROU assets represent the Company’s right to use the underlying asset during the lease term and lease liabilities represent the Company’s financial obligation under the contractual arrangement. ASC 842 represents a wholesale change to lease accounting and is intended to provide a more complete representation of a company’s assets and liabilities and deliver greater transparency about the company’s obligations and leasing activities.

At December 31, 2020, the Company had 144 operating leases composed of office buildings, warehouses, office equipment, machinery, and vehicles in addition to one finance lease as of December 31, 2020. The Company’s operating leases have remaining lease terms of a few months to 13 years, some of which have renewal options that range from about one to seven years and some leases include options to terminate with notice periods of 1 year or less. Renewal options are recognized as part of the right-of-use asset and lease liability in cases where the option has been exercised or the Company is reasonably certain to exercise an option to renew based on relevant factors that create an economic incentive to exercise. Operating lease ROU assets also include lease payments made in advance of the asset's in-service date and excludes lease incentives received, as applicable. The Company's single finance lease at December 31, 2020 is derived from a land-use agreement in Yixing, China that extends through 2049. The contractual rent payments for this lease were prepaid, in full, when the agreement was entered into and, therefore, there is no liability associated with this lease.

As permitted by ACS 842, lease terms of twelve months or less, including options reasonably expected to be exercised, are considered short-term and are excluded from the ROU Asset and Lease Liability accounts on the Consolidated Balance Sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.

In accordance with ASC 842, the Company determines if an arrangement is, or contains, a lease at inception. ROU assets and lease liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term. While most leases have fixed payments schedules, some leases contain variable lease payments based on market indices such as LIBOR or include additional payments based on excess consumption. In such cases, the Company only considers payments that are fixed and determinable at the commencement date when determining the lease liability and ROU asset.

As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date when determining the present value of lease payments. At December 31, 2020, the weighted average discount rate for operating leases was 4.27% and there is no discount rate associated with the single finance lease since there is no related lease liability. The implicit rate is used when readily determinable from a lease.

Operating leases are included in Operating lease right-of-use assets, Other accrued liabilities, and Long-term lease liabilities in the Company's Consolidated Balance Sheets. Finance leases, when applicable, are included in Property, plant and equipment, Current portion of long-term debt, and Long-term debt, excluding current portion, net of debt issuance costs in the Company's Consolidated Balance Sheets. The Company has some lease agreements with lease and non-lease components, which are generally accounted for as one component as permitted by ASC 842.

The Company has one lease agreement that was entered into in 2020 that had not yet commenced as of December 31, 2020. A new warehouse lease in Québec, Canada was executed on December 9, 2020 and commences on January 1, 2021, resulting in a new ROU asset and related lease liability of approximately $2.5 million. This new lease is not reflected in the tables below.

The components of lease expense are as follows:

	For the Year Ended December 31,
In thousands	2020		2019
Finance lease expense:
Amortization of right-of-use assets	$	42	$	81
Interest on lease liabilities	—		2
Operating lease expense	6,005		6,510
Short-term lease expense	1,571		918
Variable lease expense	678		199
Total lease expense	$	8,296	$	7,710

Supplemental balance sheet information related to leases are as follows:

	At December 31,
In thousands, except lease term	2020		2019
Operating leases:
Operating lease right-of-use assets	$	22,243	$	23,116
Short-term lease liabilities, included in Other accrued liabilities	$	4,466	$	4,789
Long-term lease liabilities	17,947		18,424
Total operating lease liabilities	$	22,413	$	23,213
Finance leases:
Property, plant and equipment	$	240	$	456
Accumulated depreciation	(30)		(143)
Property, plant and equipment, net	$	210	$	313
Short-term lease liabilities, included in debt	$	—	$	35
Total finance lease liabilities	$	—	$	35
Weighted average remaining lease term (in years):
Operating leases	6.3		7.1
Finance leases	28.7		20.4

Supplemental cash flow information related to leases are as follows:

	For the Year Ended December 31,
In thousands	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,011	$	6,301
Operating cash flows from finance leases	—		2
Financing cash flows from finance leases	34		240
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,779	$	1,743
Finance leases	—		—

As of December 31, 2020, future lease payment maturities were as follows (note that there are no future lease payments associated with the Company's single finance lease as of December 31, 2020 as the lease was prepaid in full when the contract was executed):

In thousands
For the Year Ended December 31,	Operating Leases
2021	$	5,293
2022	4,501
2023	3,398
2024	2,465
2025	2,280
Thereafter	8,318
Total lease payments	26,255
Less imputed interest	(3,842)
Total discounted future lease payments	$	22,413

LEASES

LEASES

Effective January 1, 2019, the Company adopted ASC 842, "Leases" ("ASC 842"), as amended, which superseded lease accounting guidance under ASC 840, and requires most leases to be capitalized on the balance sheet as a right-of-use (“ROU”) asset and lease liability. The ROU assets represent the Company’s right to use the underlying asset during the lease term and lease liabilities represent the Company’s financial obligation under the contractual arrangement. ASC 842 represents a wholesale change to lease accounting and is intended to provide a more complete representation of a company’s assets and liabilities and deliver greater transparency about the company’s obligations and leasing activities.

At December 31, 2020, the Company had 144 operating leases composed of office buildings, warehouses, office equipment, machinery, and vehicles in addition to one finance lease as of December 31, 2020. The Company’s operating leases have remaining lease terms of a few months to 13 years, some of which have renewal options that range from about one to seven years and some leases include options to terminate with notice periods of 1 year or less. Renewal options are recognized as part of the right-of-use asset and lease liability in cases where the option has been exercised or the Company is reasonably certain to exercise an option to renew based on relevant factors that create an economic incentive to exercise. Operating lease ROU assets also include lease payments made in advance of the asset's in-service date and excludes lease incentives received, as applicable. The Company's single finance lease at December 31, 2020 is derived from a land-use agreement in Yixing, China that extends through 2049. The contractual rent payments for this lease were prepaid, in full, when the agreement was entered into and, therefore, there is no liability associated with this lease.

As permitted by ACS 842, lease terms of twelve months or less, including options reasonably expected to be exercised, are considered short-term and are excluded from the ROU Asset and Lease Liability accounts on the Consolidated Balance Sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.

In accordance with ASC 842, the Company determines if an arrangement is, or contains, a lease at inception. ROU assets and lease liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term. While most leases have fixed payments schedules, some leases contain variable lease payments based on market indices such as LIBOR or include additional payments based on excess consumption. In such cases, the Company only considers payments that are fixed and determinable at the commencement date when determining the lease liability and ROU asset.

As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date when determining the present value of lease payments. At December 31, 2020, the weighted average discount rate for operating leases was 4.27% and there is no discount rate associated with the single finance lease since there is no related lease liability. The implicit rate is used when readily determinable from a lease.

Operating leases are included in Operating lease right-of-use assets, Other accrued liabilities, and Long-term lease liabilities in the Company's Consolidated Balance Sheets. Finance leases, when applicable, are included in Property, plant and equipment, Current portion of long-term debt, and Long-term debt, excluding current portion, net of debt issuance costs in the Company's Consolidated Balance Sheets. The Company has some lease agreements with lease and non-lease components, which are generally accounted for as one component as permitted by ASC 842.

The Company has one lease agreement that was entered into in 2020 that had not yet commenced as of December 31, 2020. A new warehouse lease in Québec, Canada was executed on December 9, 2020 and commences on January 1, 2021, resulting in a new ROU asset and related lease liability of approximately $2.5 million. This new lease is not reflected in the tables below.

The components of lease expense are as follows:

	For the Year Ended December 31,
In thousands	2020		2019
Finance lease expense:
Amortization of right-of-use assets	$	42	$	81
Interest on lease liabilities	—		2
Operating lease expense	6,005		6,510
Short-term lease expense	1,571		918
Variable lease expense	678		199
Total lease expense	$	8,296	$	7,710

Supplemental balance sheet information related to leases are as follows:

	At December 31,
In thousands, except lease term	2020		2019
Operating leases:
Operating lease right-of-use assets	$	22,243	$	23,116
Short-term lease liabilities, included in Other accrued liabilities	$	4,466	$	4,789
Long-term lease liabilities	17,947		18,424
Total operating lease liabilities	$	22,413	$	23,213
Finance leases:
Property, plant and equipment	$	240	$	456
Accumulated depreciation	(30)		(143)
Property, plant and equipment, net	$	210	$	313
Short-term lease liabilities, included in debt	$	—	$	35
Total finance lease liabilities	$	—	$	35
Weighted average remaining lease term (in years):
Operating leases	6.3		7.1
Finance leases	28.7		20.4

Supplemental cash flow information related to leases are as follows:

	For the Year Ended December 31,
In thousands	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,011	$	6,301
Operating cash flows from finance leases	—		2
Financing cash flows from finance leases	34		240
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,779	$	1,743
Finance leases	—		—

As of December 31, 2020, future lease payment maturities were as follows (note that there are no future lease payments associated with the Company's single finance lease as of December 31, 2020 as the lease was prepaid in full when the contract was executed):

In thousands
For the Year Ended December 31,	Operating Leases
2021	$	5,293
2022	4,501
2023	3,398
2024	2,465
2025	2,280
Thereafter	8,318
Total lease payments	26,255
Less imputed interest	(3,842)
Total discounted future lease payments	$	22,413