XML 28 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases Leases
The Company’s operating and finance leases generally have original lease terms between two and 11 years, and often include one or more options to renew. Some leases also include early termination options, which can be exercised under specific conditions. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company currently considers its renewal options to be reasonably certain to be exercised. The Company does not have residual value guarantees or material restrictive covenants associated with its leases.
On January 1, 2020, the Company adopted ASU 2016-02 using the modified retrospective approach, which permits application of this new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under ASC 840.
Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. The Company calculates the present value of its operating leases using an estimated incremental borrowing rate, which requires judgment. The Company estimates the incremental borrowing rate for each operating lease based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. Certain leases contain variable payments, which are expensed as incurred and not included in the Company’s operating lease right-of-use assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance on the Company’s corporate, research and development, and manufacturing facilities and warehouse leases and are excluded from the present value of the Company’s lease obligations.
Previously designated capital leases under ASC 840 are now considered finance leases under ASC 842. The Company calculates the present value of its finance leases using the interest rate implicit in the lease agreement.
Upon adoption of ASU 2016-02, the Company recognized operating lease right-of-use assets of $11.9 million adjusted for $0.3 million previously recorded as deferred rent and $0.2 million previously recorded as prepaid rent on the Company’s consolidated balance sheets. The Company also recorded $1.4 million in current operating lease liabilities and $10.6 million in operating lease liabilities, net of current portion.
As part of this adoption, the Company elected to not record operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less.
Subsequent to the year ended December 31, 2020, on January 14, 2021, the Company entered into a 12-year lease with two 5-year renewal options to house its corporate headquarters, lab and innovation space in El Segundo, California. See Note 14.
(in thousands)Statement of Operations LocationYear Ended December 31, 2020
Operating lease cost:
Lease costCost of goods sold$1,570 
Lease costResearch and development expenses621 
Lease costSelling, general and administrative expenses569 
Variable lease cost (1)
Cost of goods sold17 
Operating lease cost$2,777 
Short-term lease costSelling, general and administrative expenses$311 
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$75 
Interest on lease liabilitiesInterest expense13 
Finance lease cost$88 
Total lease cost$3,176 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.

Supplemental balance sheet information as of December 31, 2020 related to leases are as follows:
(in thousands) Balance Sheet LocationDecember 31, 2020
Assets
Operating leasesOperating lease right-of-use assets$14,570 
Finance leases, netProperty, plant and equipment, net212 
Total lease assets$14,782 
Liabilities
Current:
Operating lease liabilitiesCurrent portion of operating lease liabilities$3,095 
Finance lease liabilitiesCurrent portion of finance lease liabilities71 
Long-term:
Operating lease liabilitiesOperating lease liabilities, net of current portion11,793 
Finance lease liabilitiesFinance lease obligations and other long-term liabilities149 
Total lease liabilities$15,108 
The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year, as of December 31, 2020:
December 31, 2020
(in thousands)Operating LeasesFinance Leases
2021$3,455 $80 
20223,290 70 
20232,703 58 
20241,662 30 
20251,301 — 
Thereafter3,914 — 
Total undiscounted future minimum lease payments16,325 238 
Less imputed interest(1,437)(18)
Total discounted future minimum lease payments$14,888 $220 

Weighted average remaining lease terms and weighted average discount rates were:
December 31, 2020
Operating LeasesFinance Leases
Weighted average remaining lease term (years)6.63.2
Weighted average discount rate2.7 %5.3 %

A schedule of the future minimum rental commitments under the Company’s capital lease agreements and non-cancelable operating lease agreements with an initial or remaining term in excess of one year as of December 31, 2019, in accordance with ASC 840 were as follows:
December 31, 2019
(in thousands)Capital Lease ObligationsOperating Lease
Obligations
2020$86 $1,878 
202180 1,813 
202271 1,817 
202358 1,840 
202430 1,353 
Thereafter— 5,167 
Total minimum lease payments$13,868 
Total minimum lease payments$325 
Less: imputed interest (4.1% to 15.9%)
(34)
Total capital lease obligations$291 
Less: current portion of capital lease obligations(72)
Long-term capital lease obligations$219 
Leases Leases
The Company’s operating and finance leases generally have original lease terms between two and 11 years, and often include one or more options to renew. Some leases also include early termination options, which can be exercised under specific conditions. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company currently considers its renewal options to be reasonably certain to be exercised. The Company does not have residual value guarantees or material restrictive covenants associated with its leases.
On January 1, 2020, the Company adopted ASU 2016-02 using the modified retrospective approach, which permits application of this new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under ASC 840.
Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. The Company calculates the present value of its operating leases using an estimated incremental borrowing rate, which requires judgment. The Company estimates the incremental borrowing rate for each operating lease based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. Certain leases contain variable payments, which are expensed as incurred and not included in the Company’s operating lease right-of-use assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance on the Company’s corporate, research and development, and manufacturing facilities and warehouse leases and are excluded from the present value of the Company’s lease obligations.
Previously designated capital leases under ASC 840 are now considered finance leases under ASC 842. The Company calculates the present value of its finance leases using the interest rate implicit in the lease agreement.
Upon adoption of ASU 2016-02, the Company recognized operating lease right-of-use assets of $11.9 million adjusted for $0.3 million previously recorded as deferred rent and $0.2 million previously recorded as prepaid rent on the Company’s consolidated balance sheets. The Company also recorded $1.4 million in current operating lease liabilities and $10.6 million in operating lease liabilities, net of current portion.
As part of this adoption, the Company elected to not record operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less.
Subsequent to the year ended December 31, 2020, on January 14, 2021, the Company entered into a 12-year lease with two 5-year renewal options to house its corporate headquarters, lab and innovation space in El Segundo, California. See Note 14.
(in thousands)Statement of Operations LocationYear Ended December 31, 2020
Operating lease cost:
Lease costCost of goods sold$1,570 
Lease costResearch and development expenses621 
Lease costSelling, general and administrative expenses569 
Variable lease cost (1)
Cost of goods sold17 
Operating lease cost$2,777 
Short-term lease costSelling, general and administrative expenses$311 
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$75 
Interest on lease liabilitiesInterest expense13 
Finance lease cost$88 
Total lease cost$3,176 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.

Supplemental balance sheet information as of December 31, 2020 related to leases are as follows:
(in thousands) Balance Sheet LocationDecember 31, 2020
Assets
Operating leasesOperating lease right-of-use assets$14,570 
Finance leases, netProperty, plant and equipment, net212 
Total lease assets$14,782 
Liabilities
Current:
Operating lease liabilitiesCurrent portion of operating lease liabilities$3,095 
Finance lease liabilitiesCurrent portion of finance lease liabilities71 
Long-term:
Operating lease liabilitiesOperating lease liabilities, net of current portion11,793 
Finance lease liabilitiesFinance lease obligations and other long-term liabilities149 
Total lease liabilities$15,108 
The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year, as of December 31, 2020:
December 31, 2020
(in thousands)Operating LeasesFinance Leases
2021$3,455 $80 
20223,290 70 
20232,703 58 
20241,662 30 
20251,301 — 
Thereafter3,914 — 
Total undiscounted future minimum lease payments16,325 238 
Less imputed interest(1,437)(18)
Total discounted future minimum lease payments$14,888 $220 

Weighted average remaining lease terms and weighted average discount rates were:
December 31, 2020
Operating LeasesFinance Leases
Weighted average remaining lease term (years)6.63.2
Weighted average discount rate2.7 %5.3 %

A schedule of the future minimum rental commitments under the Company’s capital lease agreements and non-cancelable operating lease agreements with an initial or remaining term in excess of one year as of December 31, 2019, in accordance with ASC 840 were as follows:
December 31, 2019
(in thousands)Capital Lease ObligationsOperating Lease
Obligations
2020$86 $1,878 
202180 1,813 
202271 1,817 
202358 1,840 
202430 1,353 
Thereafter— 5,167 
Total minimum lease payments$13,868 
Total minimum lease payments$325 
Less: imputed interest (4.1% to 15.9%)
(34)
Total capital lease obligations$291 
Less: current portion of capital lease obligations(72)
Long-term capital lease obligations$219