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Note 8 - Leases | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] |
( 8 ) | LEASES
As previously discussed in Note 2, we account for our leases in accordance with the guidance in ASC Topic 842. We lease our offices, warehouse facilities and certain equipment under non-cancellable operating leases that expire at various dates through 2031. Total operating lease and short-term lease costs for the years ended December 31, 2020 and 2019, respectively, were as follows:
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |
Operating lease cost |  | $ | 1,583 |  |  | $ | 1,476 |
Short-term lease cost |  | $ | 47 |  |  | $ | 51 |
The following is additional information about our leases as of December 31, 2020:
Range of remaining lease terms (in years) |  | 0.1 | to | 10.0
Weighted average remaining lease term (in years) |  |  | 6.4 |
Weighted average discount rate |  |  | 4.3% |
Maturities of lease liabilities as of December 31, 2020 were as follows:
2021 |  | $ | 1,481 |
2022 |  |  | 1,405 |
2023 |  |  | 1,416 |
2024 |  |  | 1,395 |
2025 |  |  | 722 |
Thereafter |  |  | 1,845 |
Total lease payments |  | $ | 8,264 |
Less imputed interest |  |  | (999 | )
Total |  | $ | 7,265 |
Cash Flow Information Total amortization of right of use assets for the years ended December 31, 2020 and 2019 was $1,294 and $1,251, respectively. ROU Asset Impairment Charges During the fourth quarter of 2020, we recorded charges for non-cash impairments related to certain of our ROU assets as discussed further in Note 3. The total of these charges was $612. In determining whether our ROU assets were impaired, we considered the intended future use of the assets, including whether we expect to be able to sublease the related facilities. In both cases, we expect to eventually be able to sublease the facilities, but we currently do not expect to successfully negotiate a sublease for either facility in 2021. Our projected future cash inflows from sublease income reflect this expectation. In order to determine whether an impairment existed, we compared all future cash outflows related to the lease for the underlying ROU asset and compared this with our projected future cash inflows from the sublease. We developed several scenarios to model the expected timing and amount of sublease income we expect to receive. In all cases, the future cash outflows exceeded the expected future cash inflows, resulting in the conclusion that the ROU assets were impaired. We then discounted the projected deficit in each scenario using our estimated cost of capital and probability weighted the results to determine the amount of the impairment charge to record. To the extent that our estimate of future cash inflows exceeds the amount we ultimately receive from any sublease we enter into for these facilities, we may need to record an additional impairment charge related to these ROU assets in a future period. Lease Modifications and Additions Supplemental cash flow information related to leases for the years ended December 31, 2020 and 2019 was as follows:
Year ended December 31, 2020 |
Non-cash increases (decreases) in operating lease liabilities and ROU assets as a result of lease modifications and the execution of new leases: |
Modification to lease for facility in Fremont, California |  | $ | 1,176 |
Modification to lease for facility in Mt. Laurel, New Jersey |  | $ | 2,051 |
Modification to lease for Ambrell's Netherlands facility |  | $ | 133 |
Additions to automobile leases |  | $ | 91 |
On January 23, 2020, we executed an amendment to the lease for our EMS facility in Fremont, California, which extended the term for a period of 61 months commencing on November 1, 2020 and expiring on November 30, 2025. At the effective date of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $1,176. On September 22, 2020, we executed an amendment to the lease for our EMS facility in Mt. Laurel, New Jersey, which extended the term of the existing lease for a period of 120 months commencing on May 1, 2021. At the effective date of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $2,051. In addition, effective on August 1, 2021, the leased space will be reduced to approximately 33,650 square feet. On October 1, 2020, the lease for Ambrell's Netherlands facility automatically renewed for an additional three years. At the effective date of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $133. During the fourth quarter of 2020, we executed new leases for automobiles for certain of our employees in Europe. At the dates of execution, we recorded increases in our ROU assets and operating lease liabilities. The total increase recorded in 2020 related to these new leases was approximately $91.
Year ended December 31, 2019 |
Non-cash increases (decreases) in operating lease liabilities and ROU assets as a result of lease modifications: |
Modification to lease for Ambrell's U.K. facility |  | $ | (486 | )
Modification to lease for facility in Mansfield, Massachusetts |  | $ | 1,811 |
Modification to lease for Ambrell's Netherlands facility |  | $ | (48 | )
The lease for Ambrell's U.K. facility had an original term of 15 years, which extended through August 2029. The lease included the option to terminate the lease at specified points in time without penalty. We exercised this option in March 2019, and the lease expired in September 2019. At the effective date of this modification, we recorded a reduction in our ROU assets and operating lease liabilities of approximately $486. On April 8, 2019, we executed an amendment to the lease for our facility in Mansfield, Massachusetts that extended the term of the lease for an additional forty months to December 31, 2024 and expanded the amount of leased space by approximately 6,100 square feet. The current rate per square foot that is in place through August 31, 2021 ( the original expiration date of the lease) did not change. After August 31, 2021, there are predetermined fixed escalations of the rate as outlined in the amendment. As a result of this modification, we recorded an increase in our ROU assets and operating lease liabilities of approximately $1,811. During the third quarter of 2019, the lease for a portion of Ambrell's facility in the Netherlands was modified to reduce the term of that lease to expire in September 2019 as that portion of the space was no longer needed. At the effective date of this modification, we recorded a reduction in our ROU assets and operating lease liabilities of approximately $48.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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