Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

LeasesThe Company leases certain real estate, computer systems, material handling equipment, offices, automobiles and other equipment. The Company determines if a contract is a lease (or contains an embedded lease) at the inception of the agreement. The Company adopted ASU No. 2016-2, Leases, on January 1, 2019 using the effective date method. Upon adoption, right-of-use (“ROU”) assets totaling $5.0 million were recorded on the Company’s consolidated balance sheet. Incremental borrowing rates used in the calculation of the ROU asset, when not apparent in the lease agreements, were estimated based upon secured borrowing rates quoted by the Company’s banks for loans of various lengths ranging from one year to 20 years. Operating leases with original maturities less than one year in duration were excluded. The calculation of the ROU asset considered lease agreement provisions concerning termination, extensions, end of lease purchase and whether or not those provisions were reasonably certain of being exercised. Certain agreements contain lease and non-lease components, which are accounted for separately. No cumulative effect adjustment was necessary at the time of adoption. Based upon a contract review and related calculations, none of the Company’s leases were deemed to be financing leases.

Other information concerning the Company’s operating leases accounted for under ASC 842 guidelines and the related expense, assets and liabilities follow:

	Three Months Ended
(in thousands)	June 30, 2020		June 30, 2019
Operating lease expense	$	502	$	651
Cash paid for operating leases included in operating cash flows	537		696
	Six Months Ended
(in thousands)	June 30, 2020		June 30, 2019
Operating lease expense	$	1,165	$	1,252
Cash paid for operating leases included in operating cash flows	1,234		1,341

(in thousands)	June 30, 2020			December 31, 2019
Operating lease right-of-use asset	$	3,760		$	3,853
Operating lease short-term liability included in other current liabilities	1,768			1,846
Operating lease long-term liability included in other long-term liabilities	2,031			2,020
Weighted average remaining lease term (in years)	4.57			4.66
Weighted average discount rate used in calculating right-of-use asset	3.89		%	3.56		%

Future annual minimum lease payments as of June 30, 2020 are as follows:

(in thousands)	Amount
Remainder of 2020	$	1,074
2021	1,265
2022	540
2023	316
2024	209
2025 and thereafter	786
Total	4,190
Less interest	(380)
Present value of lease liabilities	$	3,810