Leases

3 Months Ended

Mar. 31, 2023

The Company primarily leases manufacturing facilities, distribution centers and office spaces with lease terms expiring through 2031. For the three months ended March 31, 2023, the Company recognized the following lease costs in the accompanying condensed consolidated statement of income:


	(in thousands)
Operating lease expense	$	1,333
Short-term lease expense	$	13
Variable lease expense	$	247
Total lease expense	$	1,593

For the three months ended March 31, 2023, total lease expense included in operating expense, and cost of goods sold was $1,365,000, and $228,000 respectively. For the three months ended March 31, 2022, total lease expense included in operating expense and cost of goods sold was $644,000 and $260,000, respectively.

The following table presents supplemental information related to operating leases for the three months ended March 31, 2023:


Weighted average remaining lease term	4.12
Weighted average discount rate	5.4	%
Cash paid for amounts included in measurement of lease obligations
Operating cash flows from operating leases	1,363

As of March 31, 2023, future lease payments under operating leases were as follows:


	(in thousands)
2023 (remainder)	$	3,876
2024	4,287
2025	2,926
2026	3,015
2027	1,415
Thereafter	1,212
Total future lease payments	16,731
Less: imputed interest	1,664
Total lease liability balance	15,067

In September 2020, Global Wells entered into an operating lease with an unrelated party as the landlord. The lease generates monthly rental payments from $58,000 to $61,000 over the lease term of 38 months beginning September 9, 2020. Rental income for the three months ended March 31, 2023 and 2022 were $247,000 and $238,000, respectively. The expected rental income is $367,000 for the remainder of the year ended December 31, 2023.