Effective as of the Company commenced its initial application of the provisions of FASB ASC Topic   (“Topic ), under which the Company has capitalized most of its current operating lease obligations as right-of-use assets and recognized corresponding liabilities. The Company has used a modified retrospective transition approach permitted by Topic   The Company elected to use the “package of practical expedients,” which permitted the Company to avoid a reassessment of prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the practical expedient that permitted the Company to exclude short-term agreements of less than months from capitalization.

 

In its initial application of Topic the Company recognized operating lease liabilities and corresponding right-of-use assets of million based on the present value of the then-remaining minimum rental payments under the Company’s operating leases. In addition to the recognition of operating lease liabilities and right-of-use assets, the Company also reclassified its deferred rent liability as of of as an offset to the amount of its initial operating lease right-of-use assets.  The Company was required to recognize a cumulative-effect adjustment to the opening balance of the Company’s retained earnings as a result of the initial application of Topic

 

The Company is a party to various operating leases for offices, warehousing facilities and certain office equipment. The leases expire at various dates, have varying options to renew and cancel, and contain escalation provisions. The Company recognizes as expense non-variable lease payments ratably over the lease term. The key estimates for the Company’s leases include the discount rate used to discount the unpaid lease payment to present value and the lease term. The Company’s leases generally do include a readily determinable implicit rate; therefore, management determined the incremental borrowing rate to discount the lease payment based on the information available at lease commencement. For purposes of such estimates, a lease term includes the noncancellable period under the applicable lease.

 

Subsequent to the Company’s recognition of operating lease liabilities of million on the Company made cash payments related to its recognized operating leases of million during the fiscal year ended Such payments reduced the operating lease liabilities and were included in the cash flows provided by operating activities in the accompanying consolidated statements of cash flows.

 

During the fiscal year ended the Company classified its operating lease costs within the accompanying consolidated statements of income as follows (in thousands):

 

Cost of products sold		$	1,383
Marketing and administrative expenses			210
Total operating lease costs		$	1,593

 

The Company’s operating leases have a weighted-average remaining lease term of  years. The weighted-average discount rate for the operating leases is  The following table represents the maturities of the Company’s operating lease liabilities as of in thousands):

 

Fiscal Year
2021		$	1,777
2022			1,726
2023			1,685
2024			280
Total undiscounted operating lease payments			5,468
Imputed interest			(318	)
Total operating lease liabilities		$	5,150

 

The following table represents the Company’s commitment for minimum guaranteed rental payments under its lease agreements as of in thousands):

 

Fiscal Year
2020		$	1,406
2021			497
2022			42
Total		$	1,945