XML 40 R27.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Leases | 12 Months Ended
--- | ---
Dec. 31, 2021
Lessee Disclosure [Abstract] |
Leases | Leases Effective January 1, 2019, we adopted the provisions of ASC 842, Leases, using the effective date (or modified retrospective) approach for transition. Under this transition method, periods prior to 2019 were not been restated and the cumulative effect of initially applying the new standard was recorded as an adjustment to Retained earnings at January 1, 2019. The most significant impact resulting from the adoption of the new standard was the recognition of right of use assets and lease liabilities for operating leases on our balance sheet for our real estate and automobile operating leases, in addition to the derecognition and reassessment of assets and liabilities related to our primary manufacturing facility in Salt Lake City, Utah (SLC lease), which had been accounted for as a build-to-suit lease with a failed sale leaseback. For that lease, transitional guidance required the derecognition of existing assets and liabilities and a reassessment of lease classification. We determined that the lease met the criteria for recording as a finance lease and we determined the January 1, 2019 values of the ROU asset and lease liability on the basis of that reassessment. The change in the SLC lease-related assets and liabilities resulted in a $0.3 million pre-tax reduction to retained earnings at the date of adoption. Significant changes to our accounting policies as a result of adopting the new standard are discussed below. We determine if an arrangement is a lease at inception. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether: •The contract involves the use of an identified asset. This may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset, •The lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use, and •The lessee has the right to direct the use of the asset, which is demonstrated when the lessee has decision-making rights that are most relevant to changing how and for what purpose the asset is used. Judgment is required in the application of ASC 842, including the determination of whether a contract contains a lease, the appropriate classification, allocation of consideration, and the determination of the discount rate for the lease. Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments. We are generally the lessee in our lease transactions. For periods ending after December 31, 2018, lessees are required to recognize a lease liability and a right of use asset for leases with terms greater than 12 months, in accordance with the practical expedient that is available for ongoing accounting. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term, using the rate implicit in the lease. If that rate is not readily determinable, the rate is based on the Company’s incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease. Our ROU assets include the values associated with the additional periods when it is reasonably certain that we will exercise the option. We review the carrying value of ROU assets for impairment whenever events and circumstances indicate that the carrying value of an asset group may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. We have operating and finance leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment. Our leases have remaining lease terms of 1 year to 8 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. The components of lease expense were as follows:
| For the years ended
(in thousands) | December 31, 2021 |  | December 31, 2020
Finance lease |  |  |
Amortization of right-of-use asset | $ | 997 |  |  | $ | 1,056 |
Interest on lease liabilities | 1,353 |  |  | 1,475 |
Operating lease |  |  |
Fixed lease cost | 5,283 |  |  | 5,448 |
Variable lease cost | (259) |  |  | 314 |
Short-term lease cost | 1,037 |  |  | 996 |
Total lease expense | $ | 8,411 |  |  | $ | 9,289 |
Lease expense for the year ended December 31, 2019 was $8.9 million. Supplemental cash flow information related to leases was as follows:
| For the years ended
(in thousands) | December 31, 2021 |  | December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash outflows from operating leases | $ | 5,233 |  |  | $ | 5,300 |
Operating cash outflows from finance leases | 1,353 |  |  | 1,475 |
Financing cash outflows from finance leases | 1,438 |  |  | 7,214 |
Right-of-use assets obtained in exchange for lease obligations: |  |  |
Operating leases | $ | 2,189 |  |  | $ | 4,017 |
Finance leases | — |  |  | — |
The initial recognition of each ROU asset and lease liability at lease commencement is a noncash transaction that is excluded from amounts reported in the Consolidated Statements of Cash Flows. In March 2020, the Company purchased, in cash, the primary CirComp GmbH operating facility in Germany for $5.8 million. This resulted in the recording of land and building assets, and the removal of the finance lease right of use assets and associated lease liabilities. The purchase is included with Principal payments on finance lease liabilities in the Consolidated Statements of Cash Flows. Supplemental balance sheet information related to leases was as follows:
(in thousands) | December 31, 2021 |  | December 31, 2020
Operating leases |  |  |
Right of use assets included in Other assets | $ | 14,366 |  |  | $ | 17,712 |
Lease liabilities included in |  |  |
Accrued liabilities | $ | 3,730 |  |  | $ | 4,433 |
Other noncurrent liabilities | 11,001 |  |  | 13,589 |
Total operating lease liabilities | $ | 14,731 |  |  | $ | 18,022 |
Finance leases |  |  |
Right-of-use assets included in Property, plant and equipment, net | $ | 7,979 |  |  | $ | 8,976 |
Lease liabilities included in |  |  |
Accrued liabilities | $ | 1,606 |  |  | $ | 1,438 |
Other noncurrent liabilities | 14,515 |  |  | 16,121 |
Total finance lease liabilities | $ | 16,121 |  |  | $ | 17,559 |
Additional information for leases existing at December 31, 2021 and 2020 was as follows:
| December 31, 2021 |  | December 31, 2020
Weighted average remaining lease term |  |  |
Operating leases | 6 years |  | 6 years
Finance leases | 8 years |  | 9 years
Weighted average discount rate |  |  |
Operating leases | 4.4 | % |  | 4.5 | %
Finance leases | 8.0 | % |  | 8.0 | %
Maturities of lease liabilities as of December 31, 2021 were as follows:
(in thousands) | Operating leases |  | Finance leases
Year ending December 31, |  |  |
2022 | $ | 4,737 |  |  | $ | 2,838 |
2023 | 3,412 |  |  | 3,004 |
2024 | 2,199 |  |  | 3,004 |
2025 | 1,801 |  |  | 3,004 |
2026 | 1,782 |  |  | 3,004 |
Thereafter | 2,789 |  |  | 6,501 |
Total lease payments | 16,720 |  |  | 21,355 |
Less imputed interest | (1,989) |  |  | (5,234) |
Total | $ | 14,731 |  |  | $ | 16,121 |
Maturities of lease liabilities as of December 31, 2020 were as follows:
(in thousands) | Operating leases |  | Finance leases
Year ending December 31, |  |  |
2021 | $ | 5,135 |  |  | $ | 2,790 |
2022 | 4,202 |  |  | 2,838 |
2023 | 2,829 |  |  | 3,004 |
2024 | 1,986 |  |  | 3,004 |
2025 | 1,788 |  |  | 3,004 |
Thereafter | 4,587 |  |  | 9,505 |
Total lease payments | 20,527 |  |  | 24,145 |
Less imputed interest | (2,505) |  |  | (6,586) |
Total | $ | 18,022 |  |  | $ | 17,559 |
Leases | Leases Effective January 1, 2019, we adopted the provisions of ASC 842, Leases, using the effective date (or modified retrospective) approach for transition. Under this transition method, periods prior to 2019 were not been restated and the cumulative effect of initially applying the new standard was recorded as an adjustment to Retained earnings at January 1, 2019. The most significant impact resulting from the adoption of the new standard was the recognition of right of use assets and lease liabilities for operating leases on our balance sheet for our real estate and automobile operating leases, in addition to the derecognition and reassessment of assets and liabilities related to our primary manufacturing facility in Salt Lake City, Utah (SLC lease), which had been accounted for as a build-to-suit lease with a failed sale leaseback. For that lease, transitional guidance required the derecognition of existing assets and liabilities and a reassessment of lease classification. We determined that the lease met the criteria for recording as a finance lease and we determined the January 1, 2019 values of the ROU asset and lease liability on the basis of that reassessment. The change in the SLC lease-related assets and liabilities resulted in a $0.3 million pre-tax reduction to retained earnings at the date of adoption. Significant changes to our accounting policies as a result of adopting the new standard are discussed below. We determine if an arrangement is a lease at inception. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether: •The contract involves the use of an identified asset. This may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset, •The lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use, and •The lessee has the right to direct the use of the asset, which is demonstrated when the lessee has decision-making rights that are most relevant to changing how and for what purpose the asset is used. Judgment is required in the application of ASC 842, including the determination of whether a contract contains a lease, the appropriate classification, allocation of consideration, and the determination of the discount rate for the lease. Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments. We are generally the lessee in our lease transactions. For periods ending after December 31, 2018, lessees are required to recognize a lease liability and a right of use asset for leases with terms greater than 12 months, in accordance with the practical expedient that is available for ongoing accounting. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term, using the rate implicit in the lease. If that rate is not readily determinable, the rate is based on the Company’s incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease. Our ROU assets include the values associated with the additional periods when it is reasonably certain that we will exercise the option. We review the carrying value of ROU assets for impairment whenever events and circumstances indicate that the carrying value of an asset group may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. We have operating and finance leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment. Our leases have remaining lease terms of 1 year to 8 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. The components of lease expense were as follows:
| For the years ended
(in thousands) | December 31, 2021 |  | December 31, 2020
Finance lease |  |  |
Amortization of right-of-use asset | $ | 997 |  |  | $ | 1,056 |
Interest on lease liabilities | 1,353 |  |  | 1,475 |
Operating lease |  |  |
Fixed lease cost | 5,283 |  |  | 5,448 |
Variable lease cost | (259) |  |  | 314 |
Short-term lease cost | 1,037 |  |  | 996 |
Total lease expense | $ | 8,411 |  |  | $ | 9,289 |
Lease expense for the year ended December 31, 2019 was $8.9 million. Supplemental cash flow information related to leases was as follows:
| For the years ended
(in thousands) | December 31, 2021 |  | December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash outflows from operating leases | $ | 5,233 |  |  | $ | 5,300 |
Operating cash outflows from finance leases | 1,353 |  |  | 1,475 |
Financing cash outflows from finance leases | 1,438 |  |  | 7,214 |
Right-of-use assets obtained in exchange for lease obligations: |  |  |
Operating leases | $ | 2,189 |  |  | $ | 4,017 |
Finance leases | — |  |  | — |
The initial recognition of each ROU asset and lease liability at lease commencement is a noncash transaction that is excluded from amounts reported in the Consolidated Statements of Cash Flows. In March 2020, the Company purchased, in cash, the primary CirComp GmbH operating facility in Germany for $5.8 million. This resulted in the recording of land and building assets, and the removal of the finance lease right of use assets and associated lease liabilities. The purchase is included with Principal payments on finance lease liabilities in the Consolidated Statements of Cash Flows. Supplemental balance sheet information related to leases was as follows:
(in thousands) | December 31, 2021 |  | December 31, 2020
Operating leases |  |  |
Right of use assets included in Other assets | $ | 14,366 |  |  | $ | 17,712 |
Lease liabilities included in |  |  |
Accrued liabilities | $ | 3,730 |  |  | $ | 4,433 |
Other noncurrent liabilities | 11,001 |  |  | 13,589 |
Total operating lease liabilities | $ | 14,731 |  |  | $ | 18,022 |
Finance leases |  |  |
Right-of-use assets included in Property, plant and equipment, net | $ | 7,979 |  |  | $ | 8,976 |
Lease liabilities included in |  |  |
Accrued liabilities | $ | 1,606 |  |  | $ | 1,438 |
Other noncurrent liabilities | 14,515 |  |  | 16,121 |
Total finance lease liabilities | $ | 16,121 |  |  | $ | 17,559 |
Additional information for leases existing at December 31, 2021 and 2020 was as follows:
| December 31, 2021 |  | December 31, 2020
Weighted average remaining lease term |  |  |
Operating leases | 6 years |  | 6 years
Finance leases | 8 years |  | 9 years
Weighted average discount rate |  |  |
Operating leases | 4.4 | % |  | 4.5 | %
Finance leases | 8.0 | % |  | 8.0 | %
Maturities of lease liabilities as of December 31, 2021 were as follows:
(in thousands) | Operating leases |  | Finance leases
Year ending December 31, |  |  |
2022 | $ | 4,737 |  |  | $ | 2,838 |
2023 | 3,412 |  |  | 3,004 |
2024 | 2,199 |  |  | 3,004 |
2025 | 1,801 |  |  | 3,004 |
2026 | 1,782 |  |  | 3,004 |
Thereafter | 2,789 |  |  | 6,501 |
Total lease payments | 16,720 |  |  | 21,355 |
Less imputed interest | (1,989) |  |  | (5,234) |
Total | $ | 14,731 |  |  | $ | 16,121 |
Maturities of lease liabilities as of December 31, 2020 were as follows:
(in thousands) | Operating leases |  | Finance leases
Year ending December 31, |  |  |
2021 | $ | 5,135 |  |  | $ | 2,790 |
2022 | 4,202 |  |  | 2,838 |
2023 | 2,829 |  |  | 3,004 |
2024 | 1,986 |  |  | 3,004 |
2025 | 1,788 |  |  | 3,004 |
Thereafter | 4,587 |  |  | 9,505 |
Total lease payments | 20,527 |  |  | 24,145 |
Less imputed interest | (2,505) |  |  | (6,586) |
Total | $ | 18,022 |  |  | $ | 17,559 |

X
- References No definition available. + Details
Name: | us-gaap_LesseeDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration