Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.20.2
Leases
6 Months Ended
Aug. 01, 2020
Leases [Abstract]  
Leases
Leases
The Company leases certain property and equipment, such as transmission and production equipment, satellite transponder and office equipment. The Company also leases office space used by its Emerging segment's Float Left and retail space used by its Emerging segment retailer, J.W. Hulme. The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on accompanying condensed consolidated balance sheets.
Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease liabilities and right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Some of the Company's leases include options to extend the term, which is only included in the lease liability and right-of-use assets calculation when it is reasonably certain the Company will exercise that option. As of August 1, 2020, the lease liability and right-of-use assets did not include any lease extension options.
The Company has lease agreements with lease and non-lease components, and has elected to account for these as a single lease component. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The components of lease expense were as follows:
 
 
For the Three-Month Periods Ended
 
For the Six-Month Periods Ended
 
 
August 1, 2020
 
August 3, 2019
 
August 1, 2020
 
August 3, 2019
Operating lease cost
 
$
245,000

 
$
258,000

 
$
490,000

 
$
523,000

Short-term lease cost
 
15,000

 
48,000

 
45,000

 
110,000

Variable lease cost (a)
 
26,000

 
30,000

 
53,000

 
50,000

(a) Includes variable costs of finance leases.
For the three-month periods ended August 1, 2020 and August 3, 2019, finance lease costs included amortization of right-of-use assets of $25,000 and $21,000 and interest on lease liabilities of $1,000 and $2,000. For the six-month periods ended August 1, 2020 and August 3, 2019, finance lease costs included amortization of right-of-use assets of $50,000 and $24,000 and interest on lease liabilities of $3,000 and $3,000.
Supplemental cash flow information related to leases were as follows:
 
 
For the Six-Month Periods Ended
 
 
August 1, 2020
 
August 3, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
 
 
 
Operating cash flows used for operating leases
 
$
613,000

 
$
524,000

Operating cash flows used for finance leases
 
3,000

 
3,000

Financing cash flows used for finance leases
 
49,000

 
23,000

Right-of-use assets obtained in exchange for lease liabilities:
 
 
 
 
Operating leases
 
534,000

 
142,000

Finance leases
 
34,000

 
188,000


The weighted average remaining lease term and weighted average discount rates related to leases were as follows:
 
 
August 1, 2020
 
February 1, 2020
Weighted average remaining lease term:
 
 
 
 
Operating leases
 
3.5 years
 
1.4 years
Finance leases
 
1.4 years
 
1.9 years
Weighted average discount rate:
 
 
 
 
Operating leases
 
6.7%
 
5.6%
Finance leases
 
5.5%
 
5.3%

Supplemental balance sheet information related to leases is as follows:
Leases
 
Classification
 
August 1,
2020
 
February 1,
2020
Assets
 
 
 
 
 
 
Operating lease right-of-use assets
 
Other assets
 
$
851,000

 
$
832,000

Finance lease right-of-use assets
 
Property and equipment, net
 
127,000

 
143,000

Total lease right-of-use assets
 
 
 
$
978,000

 
$
975,000

Operating lease liabilities
 
 
 
 
 
 
Current portion of operating lease liabilities
 
Current portion of operating lease liabilities
 
$
278,000

 
$
704,000

Operating lease liabilities, excluding current portion
 
Other long term liabilities
 
503,000

 
129,000

Total operating lease liabilities
 
 
 
781,000

 
833,000

Finance lease liabilities
 
 
 
 
 
 
Current portion of finance lease liabilities
 
Current liabilities: Accrued liabilities
 
96,000

 
80,000

Finance lease liabilities, excluding current portion
 
Other long term liabilities
 
34,000

 
66,000

Total finance lease liabilities
 
 
 
130,000

 
146,000

Total lease liabilities
 
 
 
$
911,000

 
$
979,000


Future maturities of lease liabilities as of August 1, 2020 are as follows:
Fiscal year
 
Operating Leases
 
Finance Leases
2020
 
$
235,000

 
$
53,000

2021
 
169,000

 
74,000

2022
 
172,000

 
8,000

2023
 
168,000

 

2024
 
141,000

 

Thereafter
 

 

Total lease payments
 
885,000

 
135,000

Less imputed interest
 
(104,000
)
 
(5,000
)
Total lease liabilities
 
$
781,000

 
$
130,000


As of August 1, 2020, the Company had no operating and finance leases that had not yet commenced. Subsequent to August 1, 2020, the Company amended its satellite transponder operating lease agreement which was expiring on October 31, 2020. The amended operating lease agreement extended the lease agreement an additional five years for total cash payments of $3.6 million.