XML 26 R16.htm IDEA: XBRL DOCUMENT

LEASES

9 Months Ended

Sep. 30, 2022

10. LEASES

The Company adopted ASU 2016-02 (Topic 842) effective January 1, 2019 using the modified retrospective adoption method which allowed it to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of accumulated deficit. In connection with the adoption of the new lease pronouncement, the Company recorded a charge to accumulated deficit of $847.

A reconciliation of lease obligations for the nine months ended September 30, 2022, is as follows:

(in thousands)
Lease obligation
December 31, 2021	$	36,496
Lease principal payments		(1,818	)
September 30, 2022	$	34,678

All extension options that are reasonably certain to be exercised have been included in the measurement of lease obligations. The Company reassesses the likelihood of extension option exercise if there is a significant event or change in circumstances within its control.

Current and long-term portions of lease obligations at September 30, 2022 and December 31, 2021, are as follows:

	September 30,		December 31,
(in thousands)	2022		2021
Lease obligation, current portion	$	2,625	$	2,444
Lease obligation, long-term portion		32,053		34,052
Total	$	34,678	$	36,496

The key assumptions used in accounting for leases as of September 30, 2022 were a weighted average remaining lease term of 14.75 years and a weighted average discount rate of 6.0%.

The key assumptions used in accounting for leases as of December 31, 2021 were a weighted average remaining lease term of 17.2 years and a weighted average discount rate of 6.0%.

The components of lease expense for the three and nine months ended September 30, 2022 and 2021, are as follows:

	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
(in thousands)	2022		2021		2022		2021
Amortization of leased assets ⁽¹⁾	$	818	$	741	$	2,475	$	2,268
Interest on lease liabilities ⁽²⁾		549		531		1,683		1,728
Total	$	1,367	$	1,272	$	4,158	$	3,996

1) Included in cost of goods sold, general and administrative and other income/expense in the Condensed Consolidated Statements of Income (Loss).

2) Included in interest expense in the Condensed Consolidated Statements of Income (Loss).

The future lease payments with initial remaining terms in excess of one year as of September 30, 2022 were as follows:

(in thousands)	September 30, 2022
Balance of 2022	$	1,163
2023		4,706
2024		4,096
2025		3,267
2026 and beyond		40,469
Total lease payments		53,701
Less imputed interest		(19,023	)
Total	$	34,678