Leases

6 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

LEASES

The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Europe. The Company determines if an arrangement is or contains a lease at inception. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants. A limited number of lease agreements include rental payments adjusted periodically for inflation.

Some of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis.

The components of lease expenses for the three and six months ended December 31, 2019 were as follows:

	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Operating lease expenses	$	4,800	$	9,489
Finance lease expenses:
Amortization of ROU assets	168		448
Interest on lease liabilities	20		41
Total finance lease expenses	188		489
Variable lease expenses	381		1,240
Short-term lease expenses	419		859
Total lease expenses	$	5,788	$	12,077

Supplemental balance sheet information related to leases was as follows:

Leases	Classification	December 31, 2019
Assets
Operating lease ROU assets	Operating lease right of use assets	$	83,845
Finance lease ROU assets, net	Property, plant and equipment, net	1,267
Total leased assets		$	85,112
Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	13,567
Finance	Current portion of long-term debt	442
Non-current
Operating	Operating lease liabilities, noncurrent portion	76,726
Finance	Long-term debt, less current portion	412
Total lease liabilities		$	91,147

Additional information related to leases is as follows:

	Six Months Ended
	December 31, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,113
Operating cash flows from finance leases	$	12
Financing cash flows from finance leases	$	244
Right-of-use assets obtained in exchange for lease obligations (a):
Operating leases	$	92,640
Finance leases	$	1,131
Weighted average remaining lease term:
Operating leases	8.6 years
Finance leases	2.4 years
Weighted average discount rate:
Operating leases	2.7		%
Finance leases	3.1		%

^(a) Right-of-use assets obtained in exchange for lease obligations includes the impact of the adoption of ASU 2016-02 effective July 1, 2019 (see Note 2) and leases which commenced, were modified or terminated during the six months ended December 31, 2019.

Maturities of lease liabilities as of December 31, 2019 were as follows:

Fiscal Year	Operating leases		Finance leases		Total
2020 (remainder of year)	$	7,555	$	238	$	7,793
2021	15,258		369		15,627
2022	12,987		184		13,171
2023	11,994		54		12,048
2024	10,191		27		10,218
Thereafter	44,398		6		44,404
Total lease payments	102,383		878		103,261
Less: Imputed interest	12,090		24		12,114
Total lease liabilities	$	90,293	$	854	$	91,147

The aggregate minimum future lease payments for operating leases at June 30, 2019 were as follows:

Fiscal Year
2020	$	19,426
2021	16,584
2022	14,218
2023	13,221
2024	11,041
Thereafter	44,452
	$	118,942

At December 31, 2019, the Company had additional leases that had not yet commenced. Obligations under these leases are not material.

Leases

LEASES

The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Europe. The Company determines if an arrangement is or contains a lease at inception. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants. A limited number of lease agreements include rental payments adjusted periodically for inflation.

Some of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis.

The components of lease expenses for the three and six months ended December 31, 2019 were as follows:

	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Operating lease expenses	$	4,800	$	9,489
Finance lease expenses:
Amortization of ROU assets	168		448
Interest on lease liabilities	20		41
Total finance lease expenses	188		489
Variable lease expenses	381		1,240
Short-term lease expenses	419		859
Total lease expenses	$	5,788	$	12,077

Supplemental balance sheet information related to leases was as follows:

Leases	Classification	December 31, 2019
Assets
Operating lease ROU assets	Operating lease right of use assets	$	83,845
Finance lease ROU assets, net	Property, plant and equipment, net	1,267
Total leased assets		$	85,112
Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	13,567
Finance	Current portion of long-term debt	442
Non-current
Operating	Operating lease liabilities, noncurrent portion	76,726
Finance	Long-term debt, less current portion	412
Total lease liabilities		$	91,147

Additional information related to leases is as follows:

	Six Months Ended
	December 31, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,113
Operating cash flows from finance leases	$	12
Financing cash flows from finance leases	$	244
Right-of-use assets obtained in exchange for lease obligations (a):
Operating leases	$	92,640
Finance leases	$	1,131
Weighted average remaining lease term:
Operating leases	8.6 years
Finance leases	2.4 years
Weighted average discount rate:
Operating leases	2.7		%
Finance leases	3.1		%

^(a) Right-of-use assets obtained in exchange for lease obligations includes the impact of the adoption of ASU 2016-02 effective July 1, 2019 (see Note 2) and leases which commenced, were modified or terminated during the six months ended December 31, 2019.

Maturities of lease liabilities as of December 31, 2019 were as follows:

Fiscal Year	Operating leases		Finance leases		Total
2020 (remainder of year)	$	7,555	$	238	$	7,793
2021	15,258		369		15,627
2022	12,987		184		13,171
2023	11,994		54		12,048
2024	10,191		27		10,218
Thereafter	44,398		6		44,404
Total lease payments	102,383		878		103,261
Less: Imputed interest	12,090		24		12,114
Total lease liabilities	$	90,293	$	854	$	91,147

The aggregate minimum future lease payments for operating leases at June 30, 2019 were as follows:

Fiscal Year
2020	$	19,426
2021	16,584
2022	14,218
2023	13,221
2024	11,041
Thereafter	44,452
	$	118,942

At December 31, 2019, the Company had additional leases that had not yet commenced. Obligations under these leases are not material.