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LEASES | 12 Months Ended
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Dec. 31, 2020
LEASES [Abstract] |
LEASES | 4. LEASES The Company leases certain real estate and warehouse equipment under long-term lease agreements. On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) (“Topic 842”), and all subsequent amendments, using the optional transition method applied to leases existing on January 1, 2019, with no restatement of comparative periods. Upon adoption of Topic 842, the Company recognized operating ROU assets (referred herein as “lease assets”) and lease liabilities based on the present value of its remaining minimum rental payments for existing operating leases as of the adoption date, utilizing the Company’s applicable incremental borrowing rate as of that date. The adoption of Topic 842 resulted in the Company recognizing $17.6 million and $18.1 million of operating lease assets and lease liabilities, respectively, as of January 1, 2019. The difference between the lease assets and liabilities was primarily due to the recognition of a $0.5 million pre-tax cumulative effect adjustment to retained earnings on January 1, 2019, resulting from the impairment of certain operating lease assets upon adoption. The Company had no existing finance leases, previously termed capital leases under ASC 840, as of its adoption of Topic 842. During the fourth quarter of 2020, the Company executed two financing leases for two forklifts used in the warehouse operations totaling less than $0.1 million. The Company performs interim reviews of its operating and finance lease assets for impairment when evidence exists that the carrying value of an asset group, including a lease asset, may not be recoverable. During the year ended December 31, 2020, the Company recognized an impairment expense of approximately $0.6 million associated with certain operating lease assets. Excluding the January 1, 2019 impairment charge to retained earnings upon the adoption of Topic 842, the Company recognized an impairment expense of less than $0.1 million associated with its operating lease assets during 2019. Additional information regarding the Company’s operating leases is as follows (in thousands, except for lease term and discount rate information):
Leases |  | Balance Sheet Classification |  | December 31, 2020 |  |  | December 31, 2019 |
(in thousands) |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Operating |  | Operating lease assets |  | $ | 11,772 |  |  | $ | 13,897 |
Finance |  | Financing lease assets |  |  | 44 |  |  |  | - |
Total assets |  |  |  | $ | 11,816 |  |  | $ | 13,897 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |
Operating |  | Operating lease liabilities |  | $ | 3,530 |  |  | $ | 3,823 |
Finance |  | Current maturities of financing lease obligations |  |  | 14 |  |  |  | - |
Non-current |  |  |  |  |  |  |  |  |  |
Operating |  | Operating lease liabilities, non-current |  |  | 9,245 |  |  |  | 10,655 |
Finance |  | Financing lease liabilities, net of current obligation |  |  | 29 |  |  |  | - |
Total lease liabilities |  |  |  | $ | 12,818 |  |  | $ | 14,478 |
Lease Cost |  | Income Statement Classification |  | December 31, 2020 |  |  | December 31, 2019 |
(in thousands) |  |  |  |  |  |  |  |
Operating lease cost |  | Operating expenses |  | $ | 3,809 |  |  | $ | 4,151 |
Operating lease cost |  | Impairment expense |  |  | 601 |  |  |  | 4 |
Variable lease cost (1) |  | Operating expenses |  |  | 937 |  |  |  | 895 |
Finance: |  |  |  |  |  |  |  |  |  |
Amortization of lease assets (2) |  | Operating expenses |  |  | - |  |  |  | - |
Interest on lease liabilities (2) |  | Interest expense |  |  | - |  |  |  | - |
Total lease cost |  |  |  | $ | 5,347 |  |  | $ | 5,050 |
(1) Variable lease cost includes payment for certain real estate taxes, insurance, common area maintenance, and other charges related to lease agreements, which are not included in the measurement of the operating lease liabilities. (2) Finance lease costs are less than $1,000 for December 31, 2020; we had no finance lease costs in 2019.
|  | December 31, 2020 |
Maturity of Lease Liabilities |  | Operating Leases |  |  | Finance Leases |
(in thousands) |  |  |  |  |  |
2021 |  | $ | 3,591 |  |  | $ | 16 |
2022 |  |  | 2,835 |  |  |  | 16 |
2023 |  |  | 2,035 |  |  |  | 15 |
2024 |  |  | 1,564 |  |  |  | - |
2025 |  |  | 1,220 |  |  |  | - |
Thereafter |  |  | 3,205 |  |  |  | - |
Total lease payments |  | $ | 14,450 |  |  | $ | 47 |
Less: Interest |  |  | (1,675 | ) |  |  | (4 | )
Present value of lease liabilities |  | $ | 12,775 |  |  | $ | 43 |
Lease Term and Discount Rate |  | December 31, 2020 |  |  | December 31, 2019 |
Weighted-average remaining lease term (years): |  |  |  |  |  |
Operating leases |  |  | 5.9 |  |  |  | 6.0 |
Finance leases |  |  | 2.9 |  |  |  | - |
Weighted-average discount rate: |  |  |  |  |  |  |  |
Operating leases |  |  | 4.4 | % |  |  | 4.1 | %
Finance leases |  |  | 6.5 | % |  |  | - |
Other Information |  | December 31, 2020 |  |  | December 31, 2019 |
(in thousands) |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows used in operating leases |  | $ | 3,866 |  |  | $ | 4,079 |
Operating cash flows used in finance leases |  |  | - |  |  |  | - |
Financing cash flows used in finance leases |  |  | 1 |  |  |  | - |
Operating lease assets obtained in exchange for lease obligations |  |  |  |  |  |  |  |
Operating leases, initial recognition |  |  | 317 |  |  |  | 18,077 |
Operating leases, modifications and remeasurements |  |  | 1,340 |  |  |  | - |
Finance leases, initial recognition |  |  | 45 |  |  |  | - |

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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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