Leases

3 Months Ended

Jul. 31, 2019

On May 1, 2019, the Company adopted ASC 842, Leases. Changes to the Company’s accounting policy as a result of adoption are discussed below.

Operating Leases - ROU assets related to operating leases are presented as “Operating lease right-of-use assets” on the unaudited Condensed Consolidated Balance Sheet. Lease liabilities related to operating leases that are subject to the ASC 842 measurement requirements such as operating leases with lease terms greater than twelve months are presented in “Short-term lease liability - operating” and “Long-term lease liability - operating” on the unaudited condensed consolidated balance sheet.

Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the present value of the lease payments is the rate implicit in the lease unless that rate cannot be readily determined, in which case, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Operating lease ROU assets may also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. The Company has lease arrangements with lease and non-lease components which are accounted for separately. Non-lease components of the lease payments are expensed as incurred and are not included in determining the present value.

Finance Leases - ROU assets related to finance leases are presented in "Property, plant and equipment, net” on the unaudited condensed consolidated balance sheet. Lease liabilities related to finance leases are presented in “Current maturities of long-term debt” and “Long-term debt, less current maturities” on the unaudited condensed consolidated balance sheet.

Finance lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the present value of the lease payments is the rate implicit in the lease unless that rate cannot be readily determined, in which case, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest that the Company

would have to pay 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 costs were as follows:



	Three Months Ended
	July 31,
(in thousands)	2019
Finance lease cost:
Amortization of right-of-use assets	$	612
Interest on lease liabilities	53
Operating lease cost	5,344

Additional information related to leases was as follows:



	Three Months Ended
	July 31,
(in thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for finance leases	$	53
Operating cash flows for operating leases	5,109
Financing cash flows for financing leases	589
Right-of-use assets obtained in exchange for new finance lease liabilities	485
Right-of-use assets obtained in exchange for new operating lease liabilities	21,118

Weighted average remaining lease term (years)
Weighted average remaining lease term - finance leases	3.52
Weighted average remaining lease term - operating leases	6.71

Weighted average discount rate
Weighted average discount rate - finance leases	3.23		%
Weighted average discount rate - operating leases	4.25		%

The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the unaudited condensed consolidated balance sheet as of July 31, 2019:



(in thousands)	Operating leases			Financing leases
Year ending April 30,
2020	$	18,174		$	1,927
2021	21,854			2,089
2022	14,837			1,149
2023	11,251			779
2024	10,410			763
Thereafter	34,881			176
Total lease payments	111,407			6,883
Less imputed interest	(14,847		)	(342		)
Total lease liability	$	96,560		$	6,541
Current maturities	(20,289		)	(2,352		)
Lease liability - long-term	$	76,271		$	4,189
Lease assets	$	95,285		$	10,810

As we have not restated prior-year information for our adoption of ASC Topic 842, the following presents our future minimum lease payments for operating leases and capital leases under ASC Topic 840 on April 30, 2019:



FISCAL YEAR	OPERATING (in thousands)		CAPITAL (in thousands)
2020	$	17,943	2,456
2021	17,649		1,953
2022	12,435		1,013
2023	10,636		705
2024	9,854		701
2025 (and thereafter)	38,871		166
	$	107,388	$	6,994
Less amounts representing interest (2% - 6.5%)			(349		)
Total obligations under capital leases			$	6,645

Leases

On May 1, 2019, the Company adopted ASC 842, Leases. Changes to the Company’s accounting policy as a result of adoption are discussed below.

would have to pay 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 costs were as follows:



	Three Months Ended
	July 31,
(in thousands)	2019
Finance lease cost:
Amortization of right-of-use assets	$	612
Interest on lease liabilities	53
Operating lease cost	5,344

Additional information related to leases was as follows:



	Three Months Ended
	July 31,
(in thousands)	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for finance leases	$	53
Operating cash flows for operating leases	5,109
Financing cash flows for financing leases	589
Right-of-use assets obtained in exchange for new finance lease liabilities	485
Right-of-use assets obtained in exchange for new operating lease liabilities	21,118

Weighted average remaining lease term (years)
Weighted average remaining lease term - finance leases	3.52
Weighted average remaining lease term - operating leases	6.71

Weighted average discount rate
Weighted average discount rate - finance leases	3.23		%
Weighted average discount rate - operating leases	4.25		%



(in thousands)	Operating leases			Financing leases
Year ending April 30,
2020	$	18,174		$	1,927
2021	21,854			2,089
2022	14,837			1,149
2023	11,251			779
2024	10,410			763
Thereafter	34,881			176
Total lease payments	111,407			6,883
Less imputed interest	(14,847		)	(342		)
Total lease liability	$	96,560		$	6,541
Current maturities	(20,289		)	(2,352		)
Lease liability - long-term	$	76,271		$	4,189
Lease assets	$	95,285		$	10,810



FISCAL YEAR	OPERATING (in thousands)		CAPITAL (in thousands)
2020	$	17,943	2,456
2021	17,649		1,953
2022	12,435		1,013
2023	10,636		705
2024	9,854		701
2025 (and thereafter)	38,871		166
	$	107,388	$	6,994
Less amounts representing interest (2% - 6.5%)			(349		)
Total obligations under capital leases			$	6,645