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Leases | 3 Months Ended
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Jan. 31, 2020
Leases [Abstract] |
Leases | Note 11. Leases The Company adopted ASC 842 and its related amendments (collectively, the “New Lease Accounting Standard”) effective November 1, 2019 and elected the modified retrospective approach in which results and disclosures for periods before 2019 were not adjusted for the new standard and the cumulative effect of the change in accounting, if applicable, is recognized through accumulated deficit at the date of adoption. The New Lease Accounting Standard establishes a right-of-use model that requires a lessee to record a ROU asset and a lease liability on the Consolidated Balance Sheet for all leases. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statement of Operations. In addition, this standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor does not convey risks and rewards or control, the lease is treated as operating. The New Lease Accounting Standard provides entities with several practical expedient elections. Among them, the Company elected the package of practical expedients that permits the Company to not reassess prior conclusions related to its leasing arrangements, lease classifications and initial direct costs. In addition, the Company has elected the practical expedients to not separate lease and non-lease components, to use hindsight in determining the lease terms and impairment of ROU assets, and to not apply the New Lease Accounting Standard’s recognition requirements to short-term leases with a term of 12 months or less. The adoption of the New Lease Accounting Standard did not have a material effect on the Company’s Consolidated Statement of Operations or Consolidated Statement of Cash Flows. Upon adoption, the Company recorded a $10.1 million operating lease ROU asset and a $10.3 million operating lease liability. The adoption of the New Lease Accounting Standard had no impact on accumulated deficit. The Company enters into operating and finance lease agreements for the use of real estate space, vehicles, information technology equipment, and certain other equipment. We determine if an arrangement contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. Operating leases are included in Operating lease right-of-use assets, Operating lease liabilities, and Long-term operating lease liabilities in the Company’s Consolidated Balance Sheet. Finance leases are not considered significant to the Company’s Consolidated Balance Sheet or Consolidated Statement of Operations. Finance lease ROU assets at January 31, 2020 of $0.1 million are included in Property, plant and equipment, net in the Company’s Consolidated Balance Sheet. Finance lease liabilities at January 31, 2020 of $0.1 million are included in Current portion of long term debt and Long term debt and other liabilities in the Company’s Consolidated Balance Sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the present value of the Company’s obligation to make lease payments arising from the lease over the lease term at the commencement date of the lease (or November 1, 2019 for leases existing upon the adoption of ASC 842). As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate based on the information available at the date of adoption in determining the present value of lease payments and used the implicit rate when readily determinable. The Company determined incremental borrowing rates through market sources for secured borrowings including relevant industry rates. The Company’s operating lease ROU assets also include any lease pre-payments and exclude lease incentives. Certain of the Company’s leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from lease ROU assets and lease liabilities, to the extent not considered in-substance fixed, and instead, expenses variable payments as incurred. Variable lease expense and lease expense for short term contracts are not material components of lease expense. The Company’s leases generally have remaining lease terms of 1 to 26 years, some of which include options to extend leases. The exercise of lease renewal options is at the Company’s sole discretion and the Company’s lease ROU assets and liabilities reflect only the options the Company is reasonably certain that it will exercise. We do not have leases with residual value guarantees or similar covenants. Operating lease expense for the three months ended January 31, 2020 was $0.2 million. As of January 31, 2020, the weighted average remaining lease term (in years) was approximately 20 years and the weighted average discount rate was 6.2%. Lease payments made for the three months ended January 31, 2020 were $0.2 million. Undiscounted maturities of operating lease and finance lease liabilities are as follows:
|  | Operating Leases |  |  | Finance Leases |
Due Year 1 |  | $ | 1,111 |  |  | $ | 97 |
Due Year 2 |  |  | 1,361 |  |  |  | 28 |
Due Year 3 |  |  | 1,313 |  |  |  | — |
Due Year 4 |  |  | 852 |  |  |  | — |
Due Year 5 |  |  | 705 |  |  |  | — |
Thereafter |  |  | 14,581 |  |  |  | — |
Total undiscounted lease payments |  |  | 19,923 |  |  |  | 125 |
Less imputed interest |  |  | (9,308 | ) |  |  | (14 | )
Total discounted lease payments |  | $ | 10,615 |  |  | $ | 111 |
Prior to the adoption of the New Lease Accounting Standard, rental commitments on an undiscounted basis were approximately $19.9 million under long-term non-cancelable operating leases and were payable as follows: $1.1 million in fiscal year 2020, $1.4 million in fiscal year 2021, $1.3 million in fiscal year 2022, $0.9 million in fiscal year 2023, $0.7 million in fiscal year 2024 and $14.6 million thereafter. Rent expense for the three months ended January 31, 2019 was $0.2 million.

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