LEASES

12 Months Ended

Dec. 31, 2022

LEASES

LEASES

10. LEASES

The Company has operating leases for office space, manufacturing facilities and equipment, computer equipment and automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of the Company's lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes.

The Company’s finance lease obligations relate to a manufacturing facility. As of December 31, 2022, finance lease assets of $8,839 are included in property, plant, and equipment, net, finance lease obligations of $377 are included in accrued liabilities, and $9,019 are included in long-term debt on the consolidated balance sheet.

For the years ended December 31, 2022 and 2021, the components of operating lease expense were as follows (in thousands):

	December 31,			December 31,
	2022			2021
Fixed operating lease expense	$	5,507	$	5,105
Variable operating lease expense		187		707
Short-term lease expense		1,246		237
	$	6,940	$	6,049

Supplemental cash flow information related to the Company’s operating and finance leases for the years ended December 31, 2022 and 2021 are as follows (in thousands):

	December 31,		December 31,
	2022		2021
Cash paid for amounts included in the measurement of operating leases	$	5,191	$	5,321
Cash paid for amounts included in the measurement of finance lease obligations	$	736	$	—
Right of use ("ROU") assets obtained in exchange for operating lease obligations	$	9,592	$	2,482
ROU assets obtained in acquisitions for operating lease obligations (Note 2)	$	5,053	$	1,005
ROU assets obtained in exchange for finance lease obligations	$	9,471	$	—

The following table presents weighted average remaining lease term and discount rates related to the Company’s operating leases as of December 31, 2022 and 2021:

	December 31,
	2022			2021
Weighted average remaining lease term (in years)		6.75			6.41
Weighted average discount rate		3.66	%		2.28	%

The following table presents the maturity of the Company’s operating and finance lease liabilities as of December 31, 2022 (in thousands):

	Operating Leases		Finance Leases
2023		5,027		799
2024		4,446		815
2025		3,688		831
2026		3,316		848
2027		2,832		867
Thereafter		6,773		8,769
Total undiscounted cash flows	$	26,082	$	12,929
Less: present value discount		(3,064)		(3,533)
Total lease liabilities	$	23,018	$	9,396

As of December 31, 2022, the Company has entered into leases for building renewal and expansion, with future minimum lease payments of $7,999 that have not yet commenced.

The Company leases certain facilities from companies for which a member of management is a part owner. In connection with such leases, the Company made payments to the lessor of $1,529 and $706 during the years ended December 31, 2022 and 2021, respectively. Future minimum lease payments under these leases as of December 31, 2022 are $13,455.