Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Leases

Operating Leases

The Company is obligated to make rental payments under non-cancellable operating leases for office, dispatch station space and transportation equipment, expiring at various dates through 2032. Under the terms of the leases, the Company is also obligated for its proportionate share of real estate taxes, insurance and maintenance costs of the property. The Company is required to hold certain funds in restricted cash and cash equivalents accounts under some of these agreements.

Certain leases for property and transportation equipment contain options to purchase, extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the right-of-use asset and lease obligations for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and whether the optional period and payments should be included in the calculation of the associated right-of-use asset and lease obligation. In making such determination, the Company considers all relevant economic factors that would require whether to exercise or not exercise the option.

The Company’s lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates, which were used to discount its real estate lease liabilities. The Company used estimated borrowing rates of 6% on January 1, 2019 for all leases that commenced prior to that date for office spaces and transportation equipment.

Loss on Lease Remeasurement

In March 2024, the Company reassessed the use of an office space for one entity. As a result, the Company terminated the leased office space, which resulted in a loss of $7,306 recorded as loss from remeasurement of operating lease on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income during the three months ended March 31, 2024.

Lease Cost

The table below comprises operating lease expenses for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
Components of total lease cost:	2024		2023
Operating lease expense	$	936,750	$	756,245
Short-term lease expense	468,874		336,318
Total lease cost - operating leases	$	1,405,624	$	1,092,563

Lease Position as of March 31, 2024

Right-of-use assets and lease liabilities for the Company’s operating leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

	March 31, 2024		December 31, 2023
Assets
Lease right-of-use assets	$	9,125,733	$	9,580,535
Total lease assets	$	9,125,733	$	9,580,535
Liabilities
Current liabilities:
Lease liability - current portion	$	2,835,458	$	2,773,020
Noncurrent liabilities:
Lease liability, net of current portion	6,720,787		7,223,941
Total lease liability	$	9,556,245	$	9,996,961

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases as of March 31, 2024:

Weighted average remaining lease term (in years) - operating leases	3.54
Weighted average discount rate - operating leases	5.73	%

Undiscounted Cash Flows

Future minimum lease payments under the operating leases as of March 31, 2024 were as follows:

	Operating Leases
2024, remaining	$	2,465,671
2025	3,326,939
2026	2,488,249
2027	1,294,407
2028	676,215
Thereafter	365,656
Total future minimum lease payments	10,617,137
Less effects of discounting	(1,060,892)
Present value of future minimum lease payments	$	9,556,245

Operating lease expense was approximately $936,750 and $756,245 for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, the Company made $928,986 of fixed cash payments related to operating leases and $969,588 related to finance leases.

For the three months ended March 31, 2023, the Company made $756,245 of fixed cash payments related to operating leases and $744,030 related to finance leases.

Finance Leases

The Company leases vehicles under non-cancelable finance lease agreements with a liability of $12,585,389 and $11,430,465 as of March 31, 2024 and December 31, 2023, respectively, and accumulated depreciation of $11,469,799 and $11,679,823 as of March 31, 2024 and December 31, 2023, respectively.

Depreciation expense for the vehicles under non-cancelable finance lease agreements amounted to $1,056,490 and $801,083 for the three months ended March 31, 2024 and 2023, respectively.

Gain on Lease Remeasurement

In March 2024, the Company returned two leased vehicles. As a result, the Company terminated these leased vehicles, which resulted in a gain of $2,609 recorded as gain from remeasurement of finance leases on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income during the three months ended March 31, 2024.

Lease Payments

The table below presents lease payments for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
Components of total lease cost:	2024		2023
Finance lease payment	$	969,588	$	744,030
Short-term lease payment	—		—
Total lease payments	$	969,588	$	744,030

Lease Position as of March 31, 2024

Right-of-use assets and lease liabilities for the Company’s finance leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

	March 31, 2024		December 31, 2023
Assets
Lease right-of-use assets	$	13,385,131	$	12,003,919
Total lease assets	$	13,385,131	$	12,003,919
Liabilities
Current liabilities:
Lease liability - current portion	$	3,866,929	$	3,534,073
Noncurrent liabilities:
Lease liability, net of current portion	8,718,460		7,896,392
Total lease liability	$	12,585,389	$	11,430,465

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of March 31, 2024:

Weighted average remaining lease term (in years) - finance leases	3.46
Weighted average discount rate - finance leases	5.58	%

Undiscounted Cash Flows

Future minimum lease payments under the finance leases as of March 31, 2024 are as follows:

	Finance Leases
2024, remaining	$	3,381,839
2025	4,227,073
2026	3,363,565
2027	1,983,021
2028	843,042
Thereafter	83,908
Total future minimum lease payments	13,882,448
Less effects of discounting	(1,297,059)
Present value of future minimum lease payments	$	12,585,389

Leases

Leases

Operating Leases

The Company is obligated to make rental payments under non-cancellable operating leases for office, dispatch station space and transportation equipment, expiring at various dates through 2032. Under the terms of the leases, the Company is also obligated for its proportionate share of real estate taxes, insurance and maintenance costs of the property. The Company is required to hold certain funds in restricted cash and cash equivalents accounts under some of these agreements.

Certain leases for property and transportation equipment contain options to purchase, extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the right-of-use asset and lease obligations for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and whether the optional period and payments should be included in the calculation of the associated right-of-use asset and lease obligation. In making such determination, the Company considers all relevant economic factors that would require whether to exercise or not exercise the option.

The Company’s lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates, which were used to discount its real estate lease liabilities. The Company used estimated borrowing rates of 6% on January 1, 2019 for all leases that commenced prior to that date for office spaces and transportation equipment.

Loss on Lease Remeasurement

In March 2024, the Company reassessed the use of an office space for one entity. As a result, the Company terminated the leased office space, which resulted in a loss of $7,306 recorded as loss from remeasurement of operating lease on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income during the three months ended March 31, 2024.

Lease Cost

The table below comprises operating lease expenses for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
Components of total lease cost:	2024		2023
Operating lease expense	$	936,750	$	756,245
Short-term lease expense	468,874		336,318
Total lease cost - operating leases	$	1,405,624	$	1,092,563

Lease Position as of March 31, 2024

Right-of-use assets and lease liabilities for the Company’s operating leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

	March 31, 2024		December 31, 2023
Assets
Lease right-of-use assets	$	9,125,733	$	9,580,535
Total lease assets	$	9,125,733	$	9,580,535
Liabilities
Current liabilities:
Lease liability - current portion	$	2,835,458	$	2,773,020
Noncurrent liabilities:
Lease liability, net of current portion	6,720,787		7,223,941
Total lease liability	$	9,556,245	$	9,996,961

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases as of March 31, 2024:

Weighted average remaining lease term (in years) - operating leases	3.54
Weighted average discount rate - operating leases	5.73	%

Undiscounted Cash Flows

Future minimum lease payments under the operating leases as of March 31, 2024 were as follows:

	Operating Leases
2024, remaining	$	2,465,671
2025	3,326,939
2026	2,488,249
2027	1,294,407
2028	676,215
Thereafter	365,656
Total future minimum lease payments	10,617,137
Less effects of discounting	(1,060,892)
Present value of future minimum lease payments	$	9,556,245

Operating lease expense was approximately $936,750 and $756,245 for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, the Company made $928,986 of fixed cash payments related to operating leases and $969,588 related to finance leases.

For the three months ended March 31, 2023, the Company made $756,245 of fixed cash payments related to operating leases and $744,030 related to finance leases.

Finance Leases

The Company leases vehicles under non-cancelable finance lease agreements with a liability of $12,585,389 and $11,430,465 as of March 31, 2024 and December 31, 2023, respectively, and accumulated depreciation of $11,469,799 and $11,679,823 as of March 31, 2024 and December 31, 2023, respectively.

Depreciation expense for the vehicles under non-cancelable finance lease agreements amounted to $1,056,490 and $801,083 for the three months ended March 31, 2024 and 2023, respectively.

Gain on Lease Remeasurement

In March 2024, the Company returned two leased vehicles. As a result, the Company terminated these leased vehicles, which resulted in a gain of $2,609 recorded as gain from remeasurement of finance leases on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income during the three months ended March 31, 2024.

Lease Payments

The table below presents lease payments for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
Components of total lease cost:	2024		2023
Finance lease payment	$	969,588	$	744,030
Short-term lease payment	—		—
Total lease payments	$	969,588	$	744,030

Lease Position as of March 31, 2024

Right-of-use assets and lease liabilities for the Company’s finance leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

	March 31, 2024		December 31, 2023
Assets
Lease right-of-use assets	$	13,385,131	$	12,003,919
Total lease assets	$	13,385,131	$	12,003,919
Liabilities
Current liabilities:
Lease liability - current portion	$	3,866,929	$	3,534,073
Noncurrent liabilities:
Lease liability, net of current portion	8,718,460		7,896,392
Total lease liability	$	12,585,389	$	11,430,465

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of March 31, 2024:

Weighted average remaining lease term (in years) - finance leases	3.46
Weighted average discount rate - finance leases	5.58	%

Undiscounted Cash Flows

Future minimum lease payments under the finance leases as of March 31, 2024 are as follows:

	Finance Leases
2024, remaining	$	3,381,839
2025	4,227,073
2026	3,363,565
2027	1,983,021
2028	843,042
Thereafter	83,908
Total future minimum lease payments	13,882,448
Less effects of discounting	(1,297,059)
Present value of future minimum lease payments	$	12,585,389