Property, Plant, and Equipment

12 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, plant, and equipment acquired outside of acquisition are stated at cost. When property, plant, and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is accounted for in the statement of operations and comprehensive income. Major additions are capitalized; maintenance, repairs and minor improvements are charged to operating expenses as incurred if they do not increase the life or productivity of the related capitalized asset. Depreciation on leasehold improvements is computed using the straight-line method based on the lesser of the remaining lease term or the estimated useful life and depreciation of equipment is computed using the straight-line method over the estimated useful life as follows:


						Years
Building						20
Leasehold improvements						Shorter of useful life or lease term
Machinery and equipment						3-5
Furniture and fixtures						3-5

The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC Topic 360, Property, Plant, and Equipment. In accordance with ASC Topic 360, long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. The Company periodically reviews for indicators and, if indicators are present, tests the carrying value of long-lived assets, assessing their net realizable values based

on estimated undiscounted cash flows over their remaining estimated useful lives. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on discounted cash flows. No impairment charges were recorded for the fiscal years ended June 30, 2020, 2019 and 2018 in the Company’s consolidated financial statement.

Property, plant, and equipment, net consisted of the following:


	As of June 30,
	2020		2019
Land	$	2,540	$	2,194
Building and leasehold improvements	54,318		28,957
Machinery and equipment	55,831		46,618
Furniture and fixtures	7,031		6,734
Construction in process	10,470		9,764
	130,190		94,267
Less accumulated depreciation	(35,880)		(28,511)
	$	94,310	$	65,756

Depreciation expense was $12,249, $10,004 and $7,656 for the fiscal years ended June 30, 2020, 2019 and 2018, respectively, substantially all of which was recorded in cost of sales. During fiscal year 2020 the Company disposed of various assets with a net book value of $958 and recorded a loss of $61 related to these disposals. During fiscal year 2019, the Company disposed of various molds for models not currently in production with zero net book value.

Sale-Leaseback Transaction

In March 2008, the Company sold its two primary manufacturing and office facilities for a total of $18,250, which resulted in a gain of $726. Expenses incurred related to the sale were $523. Simultaneous with the sale, the Company entered into an agreement to lease back the buildings for an initial term of 20 years. The net gain on this transaction of $203 had been deferred and is being amortized over the initial lease term. On July 1, 2019, as part of lease implementation under Topic 842 the Company recognized the unamortized portion of the gain on the sale leaseback of $89. For the fiscal years ended June 30, 2019 and 2018, the realized gain recognized was $10 and $10 respectively.