AGILYSYS INC Leases Disclosure
6. Leases
The majority of our leases are comprised of real estate leases for our respective offices around the globe. Our finance leases consist of office equipment. We have no residual value guarantees or restrictions or covenants imposed by or associated with our active leases.
As of March 31, 2021, we do not have any leases which have not yet commenced. We do not have any related party leases. We have variable payments for expenses such as common area maintenance and taxes. We do not have variable payments that are based on an index or rate. As a result, we do not include variable payments in the calculation of the lease liability. Any variable costs are expensed as incurred.
We sublease one of our office leases located in Bellevue, Washington with a lease term that will expire during fiscal year 2024.
The components of lease expenses, which are included in operating expenses in our Consolidated Statements of Operations, were as follows:
|
|
|
Year ended March 31, |
|
|||||
|
(in thousands) |
|
2021 |
|
|
2020 |
|
||
|
Operating leases expense |
|
$ |
4,440 |
|
|
$ |
4,193 |
|
|
Finance lease expense: |
|
|
|
|
|
|
|
|
|
Amortization of ROU assets |
|
|
26 |
|
|
|
23 |
|
|
Interest on lease liabilities |
|
|
5 |
|
|
|
6 |
|
|
Total finance lease expense |
|
|
31 |
|
|
|
29 |
|
|
Variable lease costs |
|
|
443 |
|
|
|
271 |
|
|
Short term lease expense |
|
|
120 |
|
|
|
88 |
|
|
Sublease income |
|
|
(129 |
) |
|
|
— |
|
|
Total lease expense |
|
$ |
4,905 |
|
|
$ |
4,581 |
|
Other information related to leases for fiscal 2021 and 2020 was as follows:
|
|
|
Year ended March 31, |
|
|||||
|
Supplemental cash flow information |
|
2021 |
|
|
2020 |
|
||
|
Cash paid for amounts included in the measurement of lease liabilities (in thousands): |
|
|
|
|
|
|
|
|
|
Operating cash flows for operating leases |
|
$ |
5,987 |
|
|
$ |
4,873 |
|
|
Operating cash flows for finance leases |
|
|
30 |
|
|
|
8 |
|
|
Financing cash flows for finance leases |
|
|
24 |
|
|
|
24 |
|
|
ROU assets obtained in exchange for lease obligations (in thousands): |
|
|
|
|
|
|
|
|
|
Operating leases |
|
$ |
1,573 |
|
|
$ |
2,734 |
|
|
Finance leases |
|
|
— |
|
|
|
17 |
|
|
Weighted average remaining lease terms |
|
|
|
|
|
|
|
|
|
Operating leases |
|
|
|
|
|
|
|
|
|
Finance leases |
|
|
|
|
|
|
|
|
|
Weighted average discount rates |
|
|
|
|
|
|
|
|
|
Operating leases |
|
|
10.51 |
% |
|
|
10.37 |
% |
|
Finance leases |
|
|
4.46 |
% |
|
|
4.38 |
% |
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the Consolidated Balance Sheet as of March 31, 2021:
|
Year ending (in thousands) |
|
Operating leases (1) |
|
|
Finance leases |
|
||
|
2022 |
|
$ |
5,211 |
|
|
$ |
21 |
|
|
2023 |
|
|
3,494 |
|
|
|
5 |
|
|
2024 |
|
|
2,859 |
|
|
|
2 |
|
|
2025 |
|
|
2,144 |
|
|
|
— |
|
|
2026 |
|
|
1,584 |
|
|
|
— |
|
|
Thereafter |
|
|
2,431 |
|
|
|
— |
|
|
Total undiscounted future minimum lease payments |
|
|
17,724 |
|
|
|
28 |
|
|
Less: difference between undiscounted lease payments and discounted lease liabilities |
|
|
(4,119 |
) |
|
|
(3 |
) |
|
Total lease liabilities |
|
$ |
13,606 |
|
|
$ |
25 |
|
|
|
(1) |
Non-cancellable sublease proceeds for the fiscal years ending March 31, 2022, 2023, and 2024 of $0.7 million, $0.8 million, and $0.7 million, respectively, are not included in the table above. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | May 21, 2021 | Showing above |
| 2020 | May 22, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.