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Leases
 9 Months Ended
Sep. 30, 2020
Leases  
Leases
7. LEASES
 
 
The Company has operating leases
 
with fixed payment terms for
 
certain buildings and warehouses.
 
The Company's leases have
remaining lease
 
terms of
 
less than
one year
 
to
four years
, some
 
of which
 
include options
 
to extend
 
the lease
 
for
five years
.
Operating leases
 
are included
 
in operating
 
lease right
 
-of-use ("ROU")
 
assets, accrued
 
other liabilities
 
and other
 
non-current
liabilities in the
 
Consolidated Balance Sheets.
 
ROU assets represent
 
our right to
 
use an underlying asset
 
for the lease
 
term and
lease liabilities represent our 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,
September 30,
2020
2019
2020
2019
Operating lease cost
$
357,000
$
358,000
$
1,072,000
$
1,073,000
Total net lease cost
$
357,000
$
358,000
$
1,072,000
$
1,073,000
Other supplemental balance sheet information related to leases was as
 
follows:
September 30, 2020
December 31, 2019
Operating leases:
Operating lease right of use assets
$
3,506,000
$
4,484,000
Total operating lease right of
 
use assets
$
3,506,000
$
4,484,000
Current operating lease liabilities
(A)
$
843,000
$
1,304,000
Noncurrent operating lease liabilities
(B)
2,602,000
3,119,000
Total operating lease liabilities
$
3,445,000
$
4,423,000
Weighted average remaining
 
lease term (in years):
Operating leases
3.5
4.0
Weighted average discount
 
rate:
Operating leases
5.0
%
4.9
%
Current operating lease liabilities are included in
accrued other liabilities
 
on the Consolidated Balance Sheets.
 
(B)
 
Noncurrent operating
 
lease liabilities
 
are included
 
in
other non-current liabilities
 
on the
 
Consolidated Balance
Sheets.
 
 
Other information related to leases were as follows:
Nine Months Ended
September 30,
2020
2019
Cash paid for amounts included in the measurement
 
of lease liabilities
Operating cash flows from operating leases
(C)
$
1,072,000
$
1,073,000
(C)
 
Cash flow from operating lease included in prepaid and other assets
 
on the Consolidated Statements of Cash Flows.
 
 
 
As of September
 
30, 2020, maturities of lease liabilities were as follows:
Operating Leases
2020 (remainder of year)
$
358,000
2021
1,174,000
2022
1,102,000
2023
1,000,000
2024
530,000
 
Total lease payments
4,164,000
Less: imputed interest
(719,000)
 
Total lease obligations
3,445,000
Less: current obligations
(843,000)
 
Long-term lease obligations
$
2,602,000
As of December
 
31, 2019, maturities of lease liabilities were as follows:
Operating Leases
2020
$
1,433,000
2021
1,174,000
2022
1,102,000
2023
1,000,000
2024
530,000
 
Total lease payments
5,239,000
Less: imputed interest
(816,000)
 
Total lease obligations
4,423,000
Less: current obligations
(1,304,000)
 
Long-term lease obligations
$
3,119,000