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Leases | 9 Months Ended
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May 31, 2020
Leases [Abstract] |
Leases | Note 9 – Leases The Company, as lessee, has operating leases primarily for office space, manufacturing facilities, equipment, and vehicles. The Company determines if a contract is or contains a lease at the inception of the contract based on whether the contract conveys the right to control the use of an identified asset over a period of time in exchange for consideration. The Company elected, for all classes of underlying assets, to not separate lease and non-lease components and instead will treat the lease agreement as a single lease component for all asset classes. The Company additionally elected practical expedients to not reassess whether existing contracts are or contain leases, the classification of any existing leases, accounting for initial direct costs for any existing leases, and hindsight in determining the lease term and in assessing impairment of the right-of-use (“ROU”) asset. Short-term operating leases, which have an initial expected term of twelve months or less, are not recorded on the condensed consolidated balance sheet. Such fixed lease payments are recognized within the condensed consolidated statement of earnings on a straight-line basis over the lease term. Any variable payments associated with short-term operating leases are recognized within the condensed consolidated statement of earnings as they are incurred. The Company did not recognize any expense for such leases during the three and nine months ended May 31, 2020. Many of the Company’s leases contain renewal or extension options. The Company includes all renewal or extension periods that it is reasonably certain to exercise at lease commencement within the measurement of the ROU asset and lease liability. The Company’s lease portfolio consists of operating leases which are included in operating lease ROU assets and operating lease liabilities in the condensed consolidated balance sheet. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To calculate the present value of future lease payments, the Company uses an incremental borrowing rate that estimates a collateralized rate based on the expected term of the lease. Lease cost and other information related to the Company’s operating leases are as follows:
($ in thousands) |  | Three months ended May 31, 2020 |  |  | Nine months ended May 31, 2020 |
Operating lease cost (cost resulting from lease payments) |  |  | 1,502 |  |  |  | 4,412 |
Variable lease cost (cost excluded from lease payments) |  |  | 112 |  |  |  | 312 |
Total lease cost |  | $ | 1,614 |  |  | $ | 4,724 |
Operating cash outflows from operating leases |  |  | 1,178 |  |  |  | 3,997 |
Weighted average lease term - operating leases |  | 9.2 years |  |  | 9.2 years |
Weighted average discount rate - operating leases |  |  | 3.2 | % |  |  | 3.2 | %
Supplemental balance sheet information related to operating leases as of the third quarter of 2020 is as follows:
($ in thousands) |  | Classification |  | May 31, 2020 |
Operating lease ROU assets |  | Operating lease right-of-use assets |  | $ | 27,663 |
Operating lease short-term liabilities |  | Other current liabilities |  |  | 5,046 |
Operating lease long-term liabilities |  | Operating lease liabilities |  |  | 26,333 |
Total lease liabilities |  |  |  | $ | 31,379 |
The minimum lease payments under operating leases expiring subsequent to May 31, 2020 are as follows:
Fiscal year ending |  | $ in thousands |
2020 |  | $ | 1,748 |
2021 |  |  | 5,798 |
2022 |  |  | 5,465 |
2023 |  |  | 3,771 |
2024 |  |  | 3,397 |
Thereafter |  |  | 16,784 |
Total lease payments |  |  | 36,963 |
Less: interest |  |  | 5,584 |
Present value of lease liabilities |  | $ | 31,379 |
As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019 and under the previous lease accounting standard, future minimum lease payments under operating leases with an initial or remaining term in excess of one year at August 31, 2019 would have been as follows:
Fiscal year ending |  | $ in thousands |
2020 |  | $ | 6,065 |
2021 |  |  | 5,266 |
2022 |  |  | 4,771 |
2023 |  |  | 3,414 |
2024 |  |  | 3,107 |
Thereafter |  |  | 20,119 |
Total lease payments |  | $ | 42,742 |

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- 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
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