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Note 6 - Leases

9 Months Ended

Sep. 30, 2020

6.	Leases

The Company has entered into various equipment and property leases. Certain lease agreements include renewals and/or purchase options set to expire at various dates, and certain lease agreements include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is a lease at inception. Leases with an initial term of twelve months or less are not recorded on the balance sheet; costs for these leases are recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company's leases do not provide an implicit rate of return, the Company uses its asset-based lending rate in determining the present value of lease payments. Some of the Company's lease agreements contain non-lease components, which are accounted for separately.

The following table summarizes the Company’s leases recorded on the Condensed Consolidated Balance Sheets (in thousands):

	September 30, 2020		December 31, 2019
Right-of-use assets:
Finance leases, net, included in Property and equipment (1)	$	886	$	1,203
Operating leases		31,538		7,683
Total right-of-use assets	$	32,424	$	8,886

Lease liabilities:
Finance leases	$	1,328	$	1,641
Operating leases		30,751		7,889
Total lease liabilities	$	32,079	$	9,530

(1)

Finance lease right-of-use assets are presented net of accumulated amortization of $1.2 million and $0.9 million as of September 30, 2020 and December 31, 2019, respectively.

Lease cost consists of the following (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Finance lease cost:
Amortization of right-of-use assets	$	105	$	109	$	316	$	328
Interest on lease liabilities		19		13		61		42
Operating lease cost		957		514		2,709		1,419
Short-term lease cost		113		383		520		958
Variable lease cost		80		33		162		108
Total lease cost	$	1,274	$	1,052	$	3,768	$	2,855

The future maturities of lease liabilities as of September 30, 2020 are as follows (in thousands):

	Finance Leases			Operating Leases

Remainder of 2020	$	125		$	892
2021		382			3,178
2022		361			2,820
2023		158			2,561
2024		471			2,416
Thereafter		-			29,871
Total lease payments		1,497			41,738
Amount representing interest		(169	)		(10,987	)
Present value of lease liabilities		1,328			30,751
Current portion of lease liabilities (1)		(352	)		(2,303	)
Long-term lease liabilities (2)	$	976		$	28,448

(1)

Current portion of finance lease liabilities are included in Accrued liabilities.

(2)

Long-term finance lease liabilities are included in Other long-term liabilities.

The following table summarizes the lease terms and discount rates for the lease liabilities:

	September 30, 2020			December 31, 2019
Weighted-average remaining lease term (years)
Finance leases		3.27			3.79
Operating leases		18.23			8.31
Weighted-average discount rate
Finance leases		5.48	%		5.40	%
Operating leases		3.37	%		4.50	%

The following table presents other information related to the leases (in thousands):

	Nine Months Ended September 30,
	2020			2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	(61	)	$	(42	)
Operating cash flows from operating leases		(2,588	)		(1,396	)
Financing cash flows from finance leases		(313	)		(325	)
Right-of-use assets obtained in exchange for operating lease liabilities		4,471			1,238