e.l.f. Beauty, Inc. - 10-K/A filing on 2020-05-29

Leases (Tables)

12 Months Ended

Mar. 31, 2020

A reconciliation of the balance sheet line items that were impacted or created as a result of the Company’s adoption of ASC 842 as of March 31, 2020 and March 31, 2019 is as follows (in thousands):



	Classification	March 31, 2020		March 31, 2019
Assets
Operating lease assets ^(a)	Other assets	$	13,668	$	4,445
Finance lease assets ^(b)	Other assets	2,094		3,089
Total leased assets		$	15,762	$	7,534
Liabilities
Current
Operating ^(a)	Accrued expenses and other current liabilities	$	3,083	$	4,172
Finance	Current portion of long-term debt and finance lease obligations	812		771
Noncurrent
Operating ^(a)	Long-term operating lease obligations	11,239		15,898
Finance	Long-term debt and finance lease obligations	2,200		3,012
Total lease liabilities		$	17,334	$	23,853

___________________

^(a) In accordance with ASC 842, $15.7 million of ROU assets related to operating leases were derecognized in the transition period for the three months ended March 31, 2019 in connection with the Restructuring Plan. Pursuant to ASC 842, each related lease liability is derecognized only after the Company is released from that liability. The Company recognized a gain of $1.9 million in restructuring expenses related to the derecognition of lease liabilities in connection with the Restructuring Plan in the transition period for the three months ended March 31, 2019. See Note 15, “Restructuring and other related costs” for further details on the Restructuring Plan and the gain recorded on lease liabilities derecognized in the year ended March 31, 2020 and the transition period for the three months ended March 31, 2019, respectively.

^(b) Finance leases are recorded net of accumulated amortization of $2.9 million and $1.9 million as of March 31, 2020 and March 31, 2019, respectively.

Components of Lease Expense

he components of operating and finance lease costs were as follows (in thousands):



	Classification	Twelve months ended March 31, 2020			Three months ended March 31, 2019 (transition period)
Operating lease cost	Selling, general and administrative (“SG&A”) expenses	$	2,950		$	1,195
Gain from extinguishment of lease liabilities	Restructuring expense (income)	(7,733		)	(1,866		)
Acceleration of rent expense	Restructuring expenses	—			16,106
Finance lease cost
Amortization of leased assets	SG&A expenses	996			254
Interest on lease liabilities	Interest expense, net	179			50
Total lease (gain) cost		$	(3,608	)	$	15,739

he weighted average remaining lease term (in years) and discount rate were as follows:



	March 31, 2020		March 31, 2019
Weighted-average remaining lease term
Operating leases	6.8 years		5.9 years
Finance leases	3.3 years		4.3 years
Weighted-average discount rate
Operating leases	3.7	%	4.8	%
Finance leases	5.2	%	5.2	%

Maturities of Operating Lease Liabilities

As of March 31, 2020, the aggregate future minimum lease payments under non-cancellable leases presented in accordance with ASC 842 are as follows (in thousands):



	Operating leases		Finance leases		Total
2021	3,540		950		4,490
2022	2,350		907		3,257
2023	1,924		1,208		3,132
2024	1,962		235		2,197
2025	1,547		—		1,547
Thereafter	4,748		—		4,748
Total lease payments	16,071		3,300		19,371
Less: Interest	1,749		288
Present value of lease liabilities	$	14,322	$	3,012

Maturities of Finance Lease Liabilities

As of March 31, 2020, the aggregate future minimum lease payments under non-cancellable leases presented in accordance with ASC 842 are as follows (in thousands):



	Operating leases		Finance leases		Total
2021	3,540		950		4,490
2022	2,350		907		3,257
2023	1,924		1,208		3,132
2024	1,962		235		2,197
2025	1,547		—		1,547
Thereafter	4,748		—		4,748
Total lease payments	16,071		3,300		19,371
Less: Interest	1,749		288
Present value of lease liabilities	$	14,322	$	3,012

Schedule of Future Minimum Lease Payments

As of December 31, 2018 the aggregate future minimum lease payments under non-cancellable leases presented in accordance with ASC 840 were as follows (in thousands):



Year ending December 31,
2019	$	5,375
2020	5,210
2021	3,876
2022	2,832
2023	2,858
2024 and thereafter	7,167
Total	$	27,318