LEASES

6 Months Ended

Jun. 30, 2021

The Company leases certain rail cars, rail equipment, office space and office equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised.

Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term.

The Company has no finance leases.


The components of lease expense were as follows:
($ in thousands)	Classification in the Condensed Consolidated Statements of Income	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Operating lease cost (a)	Cost of sales, exclusive of depreciation and amortization	$	1,059	$	987	$	2,108	$	1,922
Operating lease cost (a)	Selling, general and administrative	34		34		68		68







Total lease cost		$	1,093	$	1,021	$	2,176	$	1,990

(a) Short-term lease costs were approximately $0.2 million and $0.1 million for the three months and $0.4 million and $0.1 million for the six months ended June 30, 2021 and 2020, respectively.

The Company had no variable lease expense, as defined by ASC 842, during the periods.


($ in thousands)	Classification on the Condensed Consolidated Balance Sheets	June 30, 2021		December 31, 2020
Assets:
Operating	Operating lease assets	$	8,962	$	10,528

Total lease right-of-use assets, net		$	8,962	$	10,528

Liabilities:
Current:
Operating	Current portion of operating lease liabilities	$	3,244	$	3,195

Noncurrent:
Operating	Operating lease liabilities	5,718		7,333

Total lease liabilities		$	8,962	$	10,528


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	900	$	933	$	1,803	$	1,881


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	—	$	20	$	—


	June 30, 2021		June 30, 2020
Weighted-average remaining lease term (in years):
Operating leases	3.3		4.1

Weighted-average discount rate:
Operating leases	4.5	%	4.5	%

Most of the Company’s lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company’s estimated incremental borrowing rate is based on information available at the inception of the lease.


As of June 30, 2021, maturities of lease liabilities were as follows:
($ in thousands)	Operating Leases
2021	$	1,791
2022	3,273
2023	2,380
2024	1,066
2025	995
Thereafter	119
Total lease payments	$	9,624
Less: Interest	662
Total lease obligations	$	8,962