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Leases
12 Months Ended
Jun. 30, 2023
Leases [Abstract]  
Leases

9. Leases

Lessee Considerations

The Company leases certain facilities, equipment, and vehicles under operating leases that expire on various dates through fiscal 2033. Its leases generally have terms that range from one year to ten years for its facilities, one year to five years for equipment, and one year to five years for vehicles. Some of its leases contain renewal options, escalation clauses, rent concessions, and leasehold improvement incentives.

The Company determines if an arrangement is a lease at inception. The Company has elected not to recognize a lease liability or ROU asset for short-term leases (leases with a term of twelve months or less). Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The interest rate used to determine the present value of future payments is the Company’s incremental borrowing rate at the commencement date because the rate implicit in the leases are not readily determinable. The Company’s incremental borrowing rate is the rate for collateralized borrowings based on the current economic environment, credit history, credit rating, value of leases, currency in which the lease obligation is satisfied, rate sensitivity, lease term and materiality. The biggest drivers having the greatest effect determining the incremental borrowing rate for each one of the Company’s leases are term of the lease and the currency in which the lease obligation is satisfied. Operating lease assets also included a reclassification for previous asset impairments and associated restructuring liabilities, deferred rent, lease incentives and initial direct costs which reduced the operating lease ROU assets.

Some operating leases contain lease and non-lease components. Certain lease contracts include fixed payments for services, such as operations, maintenance, or other services. The Company has elected to account for fixed lease and non-lease components as a single lease component except for the logistic service asset class. Cash payments made for variable lease and non-lease costs are not included in the measurement of operating lease assets and liabilities and are recognized in the Company’s consolidated statements of operations as incurred. Some lease terms include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless it is reasonably certain that it will exercise that option. The Company’s lease agreements do not contain any residual value guarantees.

The following table presents additional information relating to the Company's operating leases (in thousands, except for lease term and discount rate):

 

 

 

Year Ended

 

 

 

June 30,
2023

 

June 30,
2022

 

June 30,
 2021

 

Operating lease costs

$

14,416

 

$

16,852

 

$

18,840

 

Variable lease costs

 

 

6,920

 

 

6,921

 

 

6,487

 

Cash paid for amounts included in the measurement of operating liabilities

 

17,396

 

 

20,890

 

 

22,676

 

ROU assets obtained for new lease obligations

 

10,972

 

 

18,641

 

 

2,162

 

 

 

 

June 30,
2023

 

June 30,
2022

 

Weighted average remaining lease term

4.6 years

 

4.8 years

 

Weighted average discount rate

 

5.2

%

 

4.7

%

 

Short-term lease expense, which represents expense for leases with terms of one year or less, was not material for the years ended June 30, 2023 and 2022.

The following table presents maturities of the Company’s operating lease liabilities as of June 30, 2023 (in thousands):

 

 

Amount

 

For the fiscal year ending June 30,

 

 

 

2024

 

$

12,210

 

2025

 

 

10,199

 

2026

 

 

9,706

 

2027

 

 

8,671

 

2028

 

 

2,805

 

Thereafter

 

 

4,567

 

Total future minimum lease payments

 

 

48,158

 

Less amount representing interest

 

 

(5,466

)

Total operating lease liabilities

 

$

42,692

 

Operating lease liabilities, current

 

$

10,847

 

Operating lease liabilities, non-current

 

$

31,845

 

 

Sublease Considerations

The Company currently is a sublessor on several operating facility subleases that expire on various dates through fiscal 2024. The subleases have original terms ranging from one to six years and extend through the term of the underlying leases. The subleases do not include renewal options, purchase options, or termination rights. These operating subleases include only lease components. The Company included $0.5 million, $2.7 million and $2.9 million of sublease income in lease expense for the years ended June 30, 2023, 2022, and 2021, respectively.