7. LEASES

The Company has operating leases with fixed payment terms primarily associated with buildings and warehouses. The Company's leases have remaining lease terms of less than two years to five years, some of which include options to extend the lease for six years. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities on the Consolidated Balance Sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

The Company used the applicable incremental borrowing rate at implementation date to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads commensurate with the Company’s secured borrowing rate. At each reporting period when there is a new lease initiated, the Company will utilize its incremental borrowing rate to perform lease classification tests on lease components and to measure ROU assets and lease liabilities.

The components of lease expense were as follows:



	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Operating lease cost	$	358,000	$	1,073,000
Total net lease cost	$	358,000	$	1,073,000

Other supplemental balance sheet information related to leases was as follows:



	September 30, 2019
Operating leases:
Current operating lease right of use assets	$	—
Noncurrent operating lease right of use assets	4,823,000
Total operating lease right of use assets	$	4,823,000


Current operating lease liabilities^(A)	$	1,319,000
Noncurrent operating lease liabilities	3,445,000
Total operating lease liabilities	$	4,764,000

Weighted average remaining lease term (in years):
Operating leases	4.4

Weighted average discount rate:
Operating leases	4.9		%

Other information related to leases were as follows:



	Nine Months Ended
	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,073,000

As of September 30, 2019, maturities of lease liabilities were as follows:



	Operating Leases
2019	$	358,000
2020	1,433,000
2021	1,174,000
2022	1,102,000
2023	1,000,000
2024 and thereafter	530,000
Total lease payments	5,597,000
Less: imputed interest	(833,000		)
Total lease obligations	4,764,000
Less: current obligations	(1,319,000		)
Long-term lease obligations	$	3,445,000

As of December 31, 2018, maturities of lease liabilities were as follows:



	Operating Leases
2019	$	1,291,000
2020	1,099,000
2021	838,000
2022	766,000
2023	661,000
2024 and thereafter	331,000
Total lease payments	$	4,986,000