Quarterly report pursuant to Section 13 or 15(d)

LEASES

v3.21.1
LEASES
3 Months Ended
Mar. 31, 2021
LEASES  
LEASES

NOTE 3—LEASES

On January 1, 2019, the Company adopted ASU 2016-02 using the modified retrospective method, and accordingly, the new guidance was applied to leases that existed as of January 1, 2019.

The Company primarily leases office space and related equipment, as well as equipment, modular units and vehicles directly used in providing services to its customers. The Company’s leases have remaining lease terms of one to ten years. Most leases contain renewal options for varying periods, which are at the Company’s sole discretion and included in the expected lease term if they are reasonably certain of being exercised. In accordance with ASU 2016-02, the Company accounts for lease components, such as fixed payments including rent, real estate taxes, and insurance costs, separately from the non-lease components, such as common area maintenance costs.

In accordance with ASU 2016-02, for leases with terms greater than twelve months, the Company records the related right-of-use assets and lease liabilities at the present value of the fixed lease payments over the lease term at the lease commencement date. The Company uses its incremental borrowing rate to determine the present value of the lease as the rate implicit in the lease is typically not readily determinable.

Short-term leases (leases with an initial term of twelve months or less or leases that are cancelable by the lessee and lessor without significant penalties) are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used in delivering services to its customers. These leases are entered into at agreed upon hourly, daily, weekly, or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months.

The components of lease expense were as follows:

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

Lease Cost/(Sublease Income) (in thousands)

 

2021

 

2020

Operating lease cost

 

$

555

 

$

1,219

Short-term lease cost

 

 

620

 

 

835

Total lease cost

 

$

1,175

 

$

2,054

Lease cost related to finance leases was not significant for the three months ended March 31, 2021 and 2020.

Information related to the Company’s right-of-use assets and lease liabilities was as follows:

 

 

 

 

 

 

 

 

 

Lease Assets/Liabilities (in thousands)

 

Balance Sheet Classification

 

March 31, 2021

 

December 31, 2020

Lease Assets 

 

 

 

 

 

 

 

 

Right-of-use assets

 

Other long-term assets

 

$

2,018

 

$

2,029

 

 

 

 

 

 

 

 

 

Lease Liabilities

 

 

 

 

 

 

 

 

Short-term lease liabilities

 

Other current liabilities

 

$

1,528

 

$

1,362

Long-term lease liabilities

 

Other long-term liabilities

 

 

802

 

 

1,011

Total lease liabilities

 

 

 

$

2,330

 

$

2,373

 

Supplemental information related to the Company’s leases was as follows:

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

(dollars in thousands)

 

2021

 

2020

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash used by operating leases

 

$

578

 

$

1,231

Right-of-use assets obtained in exchange for new operating lease liabilities

 

 

491

 

 

1,001

Weighted-average remaining lease term - operating leases

 

 

1.80 years

 

 

1.83 years

Weighted-average remaining lease term - finance leases

 

 

3.23 years

 

 

3.98 years

Weighted-average discount rate - operating leases

 

 

9%

 

 

9%

Weighted-average discount rate - finance leases

 

 

9%

 

 

9%

 

Total remaining lease payments under the Company’s operating and finance leases are as follows:

 

 

 

 

 

 

 

 

 

Operating Leases

 

Finance Leases

Three Months Ended March 31, 2021

 

(in thousands)

Remainder of 2021

 

$

1,438

 

$

 4

2022

 

 

950

 

 

 6

2023

 

 

207

 

 

 6

2024

 

 

 6

 

 

 1

2025

 

 

 3

 

 

 -

Total lease payments

 

$

2,604

 

$

17

Less: interest

 

 

(291)

 

 

 -

Present value of lease liabilities

 

$

2,313

 

$

17