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Leases | 6 Months Ended
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Aug. 03, 2019
Leases [Abstract] |
Leases | Note 11 – Leases Policy On February 1, 2019 the Company adopted ASC 842, Leases. This new guidance requires a lessee to recognize assets and liabilities on the balance sheet for all leases, with the result being the recognition of a right of use (ROU) asset and a lease liability. The lease liability is equal to the present value of the minimum lease payments for the term of the lease, including any optional renewal periods determined to be reasonably certain to be exercised, using a discount rate determined at lease commencement. This discount rate is the rate implicit in the lease, if known; otherwise, the incremental borrowing rate for the expected lease term is used. The Company’s incremental borrowing rate approximates the rate the Company would have to pay to borrow on a collateralized basis over a similar term at lease inception. The value of the ROU asset is equal to the initial measurement of the lease liability plus any lease payments made to the lessor at or before the commencement date and any unamortized initial direct costs incurred by the lessee, less any unamortized lease incentives received. There are two types of leases, operating leases and finance leases. Lease classification is determined at lease commencement. All of the Company’s leases are classified as operating leases. Operating lease expense is recognized on a straight-line basis over the lease term and included in general and administrative expense on the condensed consolidated statement of income. For operating leases, ROU assets are classified in other long-term assets, short-term lease liabilities are classified in other current liabilities, and long-term lease liabilities are classified in other long-term liabilities on the condensed consolidated balance sheet. On the cash flow statement, payments for operating leases are classified as operating activities. The Company enters into lease contracts for certain of its facilities at various locations worldwide. At inception of a contract, the Company determines whether the contract is or contains a lease. If the Company has a right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the asset, then the contract contains a lease. Several of the Company’s lease contracts include options to extend the lease term and Company includes the renewal options for these leases in the determination of the ROU asset and lease liability when the likelihood of renewal is determined to be reasonably certain. In addition, several of our lease agreements include non-lease components for items such as common area maintenance and utilities which are accounted for separately from the lease component. Adoption Method and Impact The Company applied ASC 842 to all leases in effect at February 1, 2019 and adopted the accounting standard using the non-comparative transition option, which does not require the restatement of prior years. Comparative information has not been adjusted and continues to be reported under the previous accounting guidance. The Company has elected the package of practical expedients, which allows entities to not reassess (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less. On February 1, 2019, the Company recognized $2.0 million of ROU assets and lease liabilities on its consolidated balance sheet. The adoption did not have a material impact on the Company’s results of operations or cash flows. Disclosure Our leases have remaining lease terms of 1 to 12 years, some of which include options to extend the lease term for periods up to 5 years when it is reasonably certain the Company will exercise such options. The company leases office space from an affiliate. This lease is classified as an operating lease with annual rental payments of approximately $64,000 and $66,000 in fiscal 2020 and 2021, respectively. Balance sheet and other information related to our leases is as follows:
Operating Leases (In thousands) |  | Balance Sheet Classification |  | August 3, 2019 |
Lease Assets |  | Right of Use Assets |  | $ | 1,760 |
Lease Liabilities – Current |  | Other Liabilities and Accrued Expenses |  |  | 405 |
Lease Liabilities – Long Term |  | Lease Liabilities |  |  | 1,364 |
Lease cost information is as follows:
|  |  |  | Three Months Ended |  |  | Six Months Ended |
Operating Leases (In thousands) |  | Statement of Income Classification |  | August 3, 2019 |  |  | August 3, 2019 |
Operating Lease Costs |  | General and Administrative Expense |  | $ | 118 |  |  | $ | 210 |
Maturities of operating lease liabilities are as follows:
(In thousands) |  | August 3, 2019 |
2020 |  | $ | 189 |
2021 |  |  | 393 |
2022 |  |  | 327 |
2023 |  |  | 277 |
2024 |  |  | 262 |
(In thousands) |  | August 3, 2019 |
Thereafter |  |  | 561 |
Total Lease Payments |  |  | 2,009 |
Less: Imputed Interest |  |  | (240 | )
Total Lease Liabilities |  | $ | 1,769 |
As of August 3, 2019, the weighted-average remaining lease term and weighted-average discount rate for our operating leases are 6.1 years and 4.02%, respectively. We calculated the weighted-average discount rate using incremental borrowing rates, which equal the rates of interest that we would pay to borrow funds on a fully collateralized basis over a similar term. Supplemental cash flow information related to leases is as follows:
|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | August 3, 2019 |  |  | August 3, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows for operating leases |  | $ | 98 |  |  | $ | 198 |
As previously disclosed in our fiscal year 2019 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at January 31, 2019 were as follows:
(In thousands) |  |  |
2020 |  | $ | 574 |
2021 |  |  | 520 |
2022 |  |  | 387 |
2023 |  |  | 294 |
2024 |  |  | 273 |
Thereafter |  |  | 568 |
|  | $ | 2,616 |

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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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