Leases

12 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

6. Leases

Company as Lessee

As of June 30, 2023, the Company had 32 facilities, consisting of warehouse facilities and administrative offices, financed under operating leases with lease term expirations between 2023 and 2030. Rent expense consists of monthly rental payments under the terms of the Company’s lease agreements recognized on a straight-line basis.

The following table sets forth the Company’s future minimum lease payments under operating lease liabilities recorded on the Company’s condensed consolidated balance sheet as of June 30, 2023. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.

Fiscal years ending June 30,	Maturity of Operating Lease Liabilities (in thousands)
2024	$	3,329
2025		2,571
2026		1,904
2027		1,019
2028		637
Thereafter		804
Total lease payments	$	10,264
Less: amounts representing interest		683
Present value of lease liabilities	$	9,581
Less: current portion		3,027
Long-term portion	$	6,554

The table below presents additional information related to the Company’s operating leases (in thousands):

Operating lease cost	Fiscal year ended June 30, 2023		Fiscal year ended June 30, 2022
Operating lease cost (1)	$	3,526	$	2,612
Variable lease cost (2)		3,391		289
Total lease cost	$	6,917	$	2,901

(1) Expenses are classified within selling, general and administrative expenses in the Company’s consolidated statements of operations for the fiscal years ended June 30, 2023 and 2022.

(2) Certain of the Company’s subsidiaries lease space at locations where (i) they install laundry equipment and customers pay for the use of equipment and (ii) the leased space is paid for as part of a revenue sharing arrangement. The Company did not report this variable lease cost in the fiscal year ended June 30, 2022 and does not believe the omission is material to the Company’s consolidated financial statements. These expenses are classified within cost of sales in the Company’s consolidated statements of operations for the fiscal years ended June 30, 2023 and 2022.

The table below presents lease-related terms and discount rates as of June 30, 2023 and 2022:

	June 30, 2023		June 30, 2022
Weighted average remaining lease terms
Operating leases		4.0 years		4.8 years
Weighted average discount rate
Operating leases		3.45%		3.2%

The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the fiscal years ended June 30, 2023 and 2022 (in thousands):

	Fiscal year ended June 30, 2023		Fiscal year ended June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:	$	3,526	$	2,612
Operating lease right-of-use assets obtained in exchange for operating lease liabilities:	$	4,403	$	2,658

Company as Lessor

The Company derives a portion of its revenue from equipment leasing arrangements. Such arrangements provide for monthly payments covering the equipment provided, maintenance, and interest. These arrangements meet the criteria to be accounted for as sales type leases. Accordingly, revenue related to the provision of the equipment is recognized upon delivery of the equipment and its acceptance by the customer. Upon the recognition of such revenue, an asset is established for the investment in sales type leases. Maintenance revenue and interest are recognized monthly over the lease term.

The future minimum lease payments receivable for sales type leases are as follows (in thousands):

Fiscal years ending June 30,	Total Minimum Lease Payments to be Received		Amortization of Unearned Income		Net Investment in Sales Type Leases
2024	$	4,385	$	2,759	$	1,626
2025		3,377		2,172		1,205
2026		2,749		1,522		1,227
2027		1,962		951		1,011
2028		938		414		524
Thereafter		816		355		461
					$	6,054	*

* Excludes non-guaranteed residual values of $3.0 million.

The total net investments in sales type leases, including stated residual values, as of June 30, 2023 and June 30, 2022 was $9.0 million and $7.7 million, respectively. The current portion of $1.6 million and $2.0 million is included in other current assets in the consolidated balance sheets as of June 30, 2023 and June 30, 2022, respectively, and the long term portion of $7.4 million and $5.7 million is included in other assets in the consolidated balance sheets as of June 30, 2023 and June 30, 2022, respectively.