Annual report pursuant to Section 13 and 15(d)

LEASES

v3.24.0.1
LEASES
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
LEASES LEASES
The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain
office equipment under finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
If the lease arrangement also contains non-lease components, the Company elected the practical expedient not to separate any combined lease and non-lease components for all lease contracts. For our real estate leases, the payments used in the calculation of a new lease liability include fixed payments and variable payments (if the variable payments are based on an index) over the remaining lease term. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Consolidated Balance Sheets, while variable lease payments based on usage of the underlying asset have been excluded and are expensed in the period they are incurred, as they do not represent present rights or obligations. Variable lease components for leases relate primarily to common area maintenance charges and other separately billed lessor services, sales and real estate taxes.
Any new additional operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets are based on the present value of the remaining minimum rental payments. The Company’s operating lease liability increased approximately $19.9 million as a result of acquiring ROU assets from new leases entered into during the year ended December 31, 2023. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution.
The following is a summary of the Company’s ROU assets and lease liabilities at December 31:
(In thousands) 2023 2022
Operating Leases:
Operating Right-of-Use Assets, Gross $ 43,528  $ 29,466 
Less Accumulated Right-of-Use Asset Impairment 53  1,710 
Less Accumulated Amortization 15,566  14,728 
Operating Right-of-Use Assets, Net $ 27,909  $ 13,028 
Short-term Operating Lease Liabilities $ 5,069  $ 4,441 
Long-term Operating Lease Liabilities 24,376  9,942 
Operating Lease Liabilities $ 29,445  $ 14,383 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 274  $ 231 
Less Accumulated Amortization 80  138 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 194  $ 93 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 97  $ 29 
Long-term Finance Lease Liabilities — Included in Other Liabilities 104  67 
Finance Lease Liabilities $ 201  $ 96 
The following is a summary of the Company’s total lease costs as of December 31:
(In thousands) 2023 2022
Finance Lease Cost:
Amortization of ROU Assets $ 54  $ 94 
Interest on Lease Liabilities 9  4 
Total Finance Lease Cost 63  98 
Operating Lease Cost 6,352  6,627 
Impairment Charge of Operating Lease ROU Asset 53  — 
Variable Lease Cost 2,240  1,757 
Short-term Lease Cost (excluding month-to-month) 251  602 
Less Sublease and Rental Income (548) (1,329)
Total Operating Lease Cost 8,348  7,657 
Total Net Lease Cost $ 8,411  $ 7,755 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2023 2022
Operating Cash Flow for Finance Leases $ 9  $ 4 
Operating Cash Flow for Operating Leases $ 6,180  $ 7,873 
Financing Cash Flow for Finance Leases $ 47  $ 93 
As permitted by ASC 842, leases with expected durations of less than 12 months from inception (i.e. short-term leases) were excluded from the Company’s calculation of its lease liability and ROU asset.
The weighted-average remaining term for the Company’s operating and financing leases are approximately 8 years and 2 years, respectively. The weighted-average discount rates for the Company’s operating and financing leases are approximately 5.7% and 5.8%, respectively.
The following is a summary of the Company’s maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2024 $ 6,511  $ 122 
2025 5,728  62 
2026 4,303  20 
2027 3,579  7 
2028 3,404  — 
Thereafter 13,183  — 
Total Lease Payments 36,708  211 
Less: Interest 7,263  10 
Total Lease Liability $ 29,445  $ 201 
LEASES LEASES
The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain
office equipment under finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
If the lease arrangement also contains non-lease components, the Company elected the practical expedient not to separate any combined lease and non-lease components for all lease contracts. For our real estate leases, the payments used in the calculation of a new lease liability include fixed payments and variable payments (if the variable payments are based on an index) over the remaining lease term. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Consolidated Balance Sheets, while variable lease payments based on usage of the underlying asset have been excluded and are expensed in the period they are incurred, as they do not represent present rights or obligations. Variable lease components for leases relate primarily to common area maintenance charges and other separately billed lessor services, sales and real estate taxes.
Any new additional operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets are based on the present value of the remaining minimum rental payments. The Company’s operating lease liability increased approximately $19.9 million as a result of acquiring ROU assets from new leases entered into during the year ended December 31, 2023. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution.
The following is a summary of the Company’s ROU assets and lease liabilities at December 31:
(In thousands) 2023 2022
Operating Leases:
Operating Right-of-Use Assets, Gross $ 43,528  $ 29,466 
Less Accumulated Right-of-Use Asset Impairment 53  1,710 
Less Accumulated Amortization 15,566  14,728 
Operating Right-of-Use Assets, Net $ 27,909  $ 13,028 
Short-term Operating Lease Liabilities $ 5,069  $ 4,441 
Long-term Operating Lease Liabilities 24,376  9,942 
Operating Lease Liabilities $ 29,445  $ 14,383 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 274  $ 231 
Less Accumulated Amortization 80  138 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 194  $ 93 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 97  $ 29 
Long-term Finance Lease Liabilities — Included in Other Liabilities 104  67 
Finance Lease Liabilities $ 201  $ 96 
The following is a summary of the Company’s total lease costs as of December 31:
(In thousands) 2023 2022
Finance Lease Cost:
Amortization of ROU Assets $ 54  $ 94 
Interest on Lease Liabilities 9  4 
Total Finance Lease Cost 63  98 
Operating Lease Cost 6,352  6,627 
Impairment Charge of Operating Lease ROU Asset 53  — 
Variable Lease Cost 2,240  1,757 
Short-term Lease Cost (excluding month-to-month) 251  602 
Less Sublease and Rental Income (548) (1,329)
Total Operating Lease Cost 8,348  7,657 
Total Net Lease Cost $ 8,411  $ 7,755 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2023 2022
Operating Cash Flow for Finance Leases $ 9  $ 4 
Operating Cash Flow for Operating Leases $ 6,180  $ 7,873 
Financing Cash Flow for Finance Leases $ 47  $ 93 
As permitted by ASC 842, leases with expected durations of less than 12 months from inception (i.e. short-term leases) were excluded from the Company’s calculation of its lease liability and ROU asset.
The weighted-average remaining term for the Company’s operating and financing leases are approximately 8 years and 2 years, respectively. The weighted-average discount rates for the Company’s operating and financing leases are approximately 5.7% and 5.8%, respectively.
The following is a summary of the Company’s maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2024 $ 6,511  $ 122 
2025 5,728  62 
2026 4,303  20 
2027 3,579  7 
2028 3,404  — 
Thereafter 13,183  — 
Total Lease Payments 36,708  211 
Less: Interest 7,263  10 
Total Lease Liability $ 29,445  $ 201