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Note 19 - Leases

9 Months Ended

Mar. 31, 2020

19) Leases

Effective July 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), using the modified retrospective approach and utilizing the effective date as its date of initial application. As a result, prior periods are presented in accordance with the previous guidance in ASC 840, Leases (“ASC 840”). The Company has elected to apply the ‘package of practical expedients’ which allow it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have material financing leases.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. To estimate its incremental borrowing rate, a credit rating applicable to the Company is estimated using a synthetic credit rating analysis since the Company does not currently have a rating agency-based credit rating

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

Amounts (in thousands) recorded in the Company's Condensed Consolidated Balance Sheet and Statement of Operations related to leases are as follows:

	*March 31, 2020*
Assets
ROU Assets (other assets)	$	40,901

Liabilities
Current (accrued expense)	$	8,424
Other non-current liability		32,084
Total lease liability	$	40,508

In addition, the Company had assets and liabilities recorded in its Condensed Consolidated Balance Sheet related to leases classified as discontinued operations. As of March 31, 2020, the Company had $0.2 million of ROU assets, and $0.1 million of current and non-current lease liabilities, respectively.

Lease cost

The components of lease costs for the three and nine months ended March 31, 2019 and March 31, 2020 are as follows:

	*Three Months Ended*		*Nine Months Ended*
	*March 31, 2020*		*March 31, 2020*
Operating lease cost	$	2,569	$	8,530

Maturity of lease liability

The maturity of the Company's lease liabilities included in continuing operations at March 31, 2020 were as follows:

	*Operating Leases*
Remainder of 2020	$	2,382
2021		8,233
2022		6,671
2023		4,667
2024		4,119
After 2024		19,516
Less: Interest		(5,080	)
Present value of lease Liabilities	$	40,508

The Company will make future payments on leases that have not yet commenced of $3.9 million. These leases will commence between 2020 and 2021 and have lease terms of 2 to 10 years.

The weighted average remaining lease term and discount rates are as follows:

Lease Term and Discount Rate		*March 31, 2020*
Weighted average remaining lease term (years)		9.76
Operating leases
Weighted average discount rate (percentage)		2.73
Operating leases

Other Information

Supplemental cash flow information related to leases is as follows:

	*Three Months Ended*		*Nine Months Ended*
	*March 31, 2020*		*March 31, 2020*
Operating cash flows from operating leases	$	1,701	$	7,771
Total cash paid for amounts included in the measurement of lease liabilities		1,701		7,771