Leases

9 Months Ended

Dec. 31, 2021

Leases [Abstract]

Lessee, Operating Leases

LEASES

The Company, as a lessee, enters into operating leases for land, buildings, equipment, and vehicles. For all operating leases with terms greater than 12 months and with fixed payment arrangements, a lease liability and corresponding right-of-use asset are recognized in the balance sheet for the term of the lease by calculating the net present value of future lease payments. On the date of lease commencement, the present value of lease liabilities is determined by discounting the future lease payments by the Company’s collateralized incremental borrowing rate, adjusted for the lease term and currency of the lease payments. If a lease contains a renewal option that the Company is reasonably certain to exercise, the Company accounts for the original lease term and expected renewal term in the calculation of the lease liability and right-of-use asset.

The following table sets forth the right-of-use assets and lease liabilities for operating leases included in the Company’s consolidated balance sheet:

(in thousands of dollars)	December 31, 2021		December 31, 2020		March 31, 2021
Assets
Operating lease right-of-use assets	$	34,139	$	34,717	$	31,230
Liabilities
Current portion of operating lease liabilities	$	9,128	$	9,014	$	7,898
Long-term operating lease liabilities	22,612		22,709		19,725
Total operating lease liabilities	$	31,740	$	31,723	$	27,623

The following table sets forth the location and amount of operating lease costs included in the Company's consolidated statement of income:

	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands of dollars)	2021		2020		2021		2020
Income Statement Location
Cost of goods sold	$	2,805	$	3,401	$	8,104	$	9,531
Selling, general, and administrative expenses	2,536		2,520		7,102		7,176
Total operating lease costs(1)	$	5,341	$	5,921	$	15,206	$	16,707

(1)Includes variable operating lease costs.

The following table reconciles the undiscounted cash flows to the operating lease liabilities in the Company’s consolidated balance sheet:

(in thousands of dollars)	December 31, 2021
Maturity of Operating Lease Liabilities
2022 (excluding the nine months ended December 31, 2021)	$	2,743
2023	9,493
2024	7,526
2025	5,393
2026	3,116
2027 and thereafter	7,676
Total undiscounted cash flows for operating leases	$	35,947
Less: Imputed interest	(4,207)
Total operating lease liabilities	$	31,740

As of December 31, 2021, the Company had no leases that have not yet commenced.

The following table sets forth supplemental information related to operating leases:

	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands, except lease term and incremental borrowing rate)	2021		2020		2021			2020
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,219	$	3,171	$	8,836		$	9,358
Right-of-use assets obtained in exchange for new operating leases	3,843		1,532		12,894			3,122
Weighted Average Remaining Lease Term (years)					5.31			5.33
Weighted Average Collateralized Incremental Borrowing Rate					3.84		%	4.21		%

As part of the acquisition of Shank's, the Company recognized $8.5 million of operating lease right-of-use assets and corresponding operating lease liabilities on the opening balance sheet related to leases of Shank's facilities. The facilities were subsequently purchased in the three months ended December 31, 2021 and therefore excluded from the lease disclosures above.