Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

LeasesThe Company determines if an arrangement is a lease at its inception. Operating leases are included in “Operating lease right-of-use assets,” “Other current liabilities,” and “Long-term operating lease liabilities” within the Consolidated Balance Sheets. Finance leases are included in “Property, plant, and equipment - net,” “Current maturities of long-term debt,” and “Long-term debt” in the Consolidated Balance Sheets.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit rate when readily determinable. The operating lease right-of-use asset also includes indirect costs incurred and lease payments made prior to the commencement date, less any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components that it accounts for as a single lease component. Also, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities.

The Company has operating and finance leases for manufacturing facilities, corporate offices, sales offices, vehicles, and certain equipment. As of December 31, 2022, its leases had remaining lease terms of 2 to 12 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year.

The balance sheet components of the leases were as follows as of December 31, 2022 and 2021:

	December 31, 2022		December 31, 2021
Operating leases
Operating lease right-of-use assets	$	17,291	$	15,131
Other current liabilities	$	3,128	$	2,852
Long-term operating lease liabilities	14,163		12,279
Total operating lease liabilities	$	17,291	$	15,131
Finance leases
Property, plant, and equipment	$	1,442	$	1,162
Accumulated amortization	(1,130)		(1,011)
Property, plant, and equipment - net	$	312	$	151
Current maturities of long-term debt	$	127	$	98
Long-term debt	185		53
Total finance lease liabilities	$	312	$	151

The components of lease expense within the Consolidated Statements of Operations were as follows for the years ended December 31, 2022 and 2021:

	Year Ended December 31,
	2022		2021
Finance lease cost:
Amortization of finance leases	$	177	$	203
Interest on lease liabilities	34		82
Operating lease cost	2,891		2,784
Sublease income	(200)		(200)
Total lease cost	$	2,902	$	2,869

The cash flow components of the leases were as follows for the years ended December 31, 2022 and 2021:

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(3,440)	$	(3,342)
Financing cash flows from finance leases	(164)		(221)
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	5,257	$	1,847

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows for the periods presented:

	December 31,
	2022		2021
Operating lease weighted-average remaining lease term	7		6
Operating lease weighted-average discount rate	5.2	%	5.2	%
Finance lease weighted-average remaining lease term	2		1
Finance lease weighted-average discount rate	3.7	%	4.1	%

As of December 31, 2022, estimated annual maturities of lease liabilities for the year ending December 31, 2023 and thereafter were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2023	$	4,002	$	160
2024	3,620		112
2025	3,043		76
2026	2,811		6
2027	2,007		—
2028 and thereafter	4,988		—
	20,471		354
Interest	(3,180)		(42)
Total	$	17,291	$	312

Leases

LeasesThe Company determines if an arrangement is a lease at its inception. Operating leases are included in “Operating lease right-of-use assets,” “Other current liabilities,” and “Long-term operating lease liabilities” within the Consolidated Balance Sheets. Finance leases are included in “Property, plant, and equipment - net,” “Current maturities of long-term debt,” and “Long-term debt” in the Consolidated Balance Sheets.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit rate when readily determinable. The operating lease right-of-use asset also includes indirect costs incurred and lease payments made prior to the commencement date, less any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components that it accounts for as a single lease component. Also, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities.

The Company has operating and finance leases for manufacturing facilities, corporate offices, sales offices, vehicles, and certain equipment. As of December 31, 2022, its leases had remaining lease terms of 2 to 12 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year.

The balance sheet components of the leases were as follows as of December 31, 2022 and 2021:

	December 31, 2022		December 31, 2021
Operating leases
Operating lease right-of-use assets	$	17,291	$	15,131
Other current liabilities	$	3,128	$	2,852
Long-term operating lease liabilities	14,163		12,279
Total operating lease liabilities	$	17,291	$	15,131
Finance leases
Property, plant, and equipment	$	1,442	$	1,162
Accumulated amortization	(1,130)		(1,011)
Property, plant, and equipment - net	$	312	$	151
Current maturities of long-term debt	$	127	$	98
Long-term debt	185		53
Total finance lease liabilities	$	312	$	151

The components of lease expense within the Consolidated Statements of Operations were as follows for the years ended December 31, 2022 and 2021:

	Year Ended December 31,
	2022		2021
Finance lease cost:
Amortization of finance leases	$	177	$	203
Interest on lease liabilities	34		82
Operating lease cost	2,891		2,784
Sublease income	(200)		(200)
Total lease cost	$	2,902	$	2,869

The cash flow components of the leases were as follows for the years ended December 31, 2022 and 2021:

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(3,440)	$	(3,342)
Financing cash flows from finance leases	(164)		(221)
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	5,257	$	1,847

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows for the periods presented:

	December 31,
	2022		2021
Operating lease weighted-average remaining lease term	7		6
Operating lease weighted-average discount rate	5.2	%	5.2	%
Finance lease weighted-average remaining lease term	2		1
Finance lease weighted-average discount rate	3.7	%	4.1	%

As of December 31, 2022, estimated annual maturities of lease liabilities for the year ending December 31, 2023 and thereafter were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2023	$	4,002	$	160
2024	3,620		112
2025	3,043		76
2026	2,811		6
2027	2,007		—
2028 and thereafter	4,988		—
	20,471		354
Interest	(3,180)		(42)
Total	$	17,291	$	312