Leases

9 Months Ended

Dec. 31, 2022

The Company has operating leases for the use of real estate, machinery, and office equipment. The majority of our leases have a lease term of 2 to 5 years; however, we have certain leases with longer terms of up to 30 years. Many of our leases include options to extend the lease for an additional period.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor that is considered likely to be exercised.

Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. Variable payments are typically operating costs associated with the underlying asset and are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Our leases do not contain residual value guarantees.

The Company has elected to combine lease and non-lease components as a single component and not to recognize leases on the balance sheet with an initial term of one year or less.

The interest rate implicit in lease contracts is typically not readily determinable, and as such the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The components of lease cost for the three and nine months ended December 31, 2022 and 2021 are as follows (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Operating lease cost	$	537	$	499	$	1,529	$	1,366
Short-term lease cost	193		325		564		983
Variable lease cost	140		174		415		464
Total lease cost	$	870	$	998	$	2,508	$	2,813

Amounts reported in the consolidated balance sheets for leases where we are the lessee as of December 31, 2022 and March 31, 2022 were as follows (in thousands):


	December 31, 2022			March 31, 2022
Operating leases
Operating lease ROU assets	$	6,391		$	7,354
Operating lease liabilities	$	7,176		$	8,177

Weighted-average remaining lease term
Operating leases	13 years, 11 months			13 years, 5 months

Weighted-average discount rate
Operating leases	4.37		%	4.33		%

Maturities of lease liabilities under non-cancellable leases where we are the lessee as of December 31, 2022 are as follows (in thousands):


	Operating Leases
2023 (excluding the nine months ended December 31, 2022)	$	431
2024	1,438
2025	1,139
2026	870
2027	704
2028	273
Thereafter	5,028
Total undiscounted lease payments	9,883
Less: Interest	(2,275)
Less: Discount	(432)
Total lease liabilities	$	7,176