Leases

12 Months Ended

Jun. 30, 2020

The Company leases certain manufacturing facilities, warehouses, office space, land, and equipment. The Company determines if a contract is a lease or contains an embedded lease at the inception of the agreement. The Company recorded right-of-use assets, included in other assets on the balance sheet, totaling $16,142 as of July 1, 2019. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. The Company's lease liabilities do not include future lease payments related to options to extend or terminate lease agreements as it is not reasonably certain those options will be exercised. Lease expense recorded in the fiscal year ended June 30, 2020 under ASC Topic 842 was not materially different from lease expense that would have been recorded under the previous lease accounting standard.

Other information concerning the Company's operating leases accounted for under ASC Topic 842 is as follows (in thousands):

Classification

As of June 30, 2020

Assets

Right-of-use assets

Other assets

14,315

Liabilities

Current operating lease liabilities

Accrued expenses

2,006

Long-term operating lease liabilities

Other liabilities

14,013

Total lease liabilities

16,019

Classification

Fiscal Year Ended June 30, 2020

Operating lease costs ⁽¹⁾

Cost of sales

1,966

Selling, general and administrative

863

Sublease income

Other income (expense)

Cash paid for amounts included in the measurement of operating lease liabilities

Cash flows from operating activities

2,606

⁽¹⁾ Includes short-term leases, which are insignificant, and are not included in the lease liability.

The lease liability for operating leases that contain variable escalating rental payments with scheduled increases that are based on the lesser of a stated percentage increase or the cumulative increase in an index, are determined using the stated percentage increase.

The weighted average remaining lease term is 7.27 years. The weighted average discount rate determined based on the Company's incremental borrowing rate is 3.65%, as of June 30, 2020.

Future annual minimum lease payments for the following fiscal years as of June 30, 2020 are as follows:


	Amount
2021	$	2,548
2022	2,391
2023	2,442
2024	2,570
2025	2,308
2026 and thereafter	6,014
Total	18,273
Less imputed interest	(2,254)
Present value of lease liabilities	$	16,019

The following represents the Company's future minimum rental payments at June 30, 2019 for agreements classified as operating leases under ASC Topic 840:


	Amount
2020	$	2,552
2021	2,541
2022	2,432
2023	2,489
2024	2,649
2025 and thereafter	8,577
Total	$	21,240