LEASES

9 Months Ended

Jun. 30, 2023

Leases [Abstract]

LEASES

11.    LEASES

The Company records a right-of-use (“ROU”) asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASU 842. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. The Company recognizes lease expense for the leases on a straight-line basis over the lease term. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration.

The Company has various operating and finance leases for facilities and equipment. Facilities leases provide office, laboratory, warehouse, or land that the Company uses to conduct its operations. Facilities leases range in duration from two to eleven years, with either renewal options for additional terms as the initial lease term expires, or purchase options. Facilities leases are considered as either operating or financing leases.

Equipment leases provide for office equipment, laboratory equipment or services the Company uses to conduct its operations. Equipment leases range in duration from 21 to 84 months, with either subsequent annual renewals, additional terms as the initial lease term expires, or purchase options.

ROU lease assets and lease liabilities that are reported in the Company’s condensed consolidated balance sheets are as follows:

	June 30, 2023		September 30, 2022
Operating ROU assets, net	$	41,426	$	32,489
Current portion of operating lease liabilities	10,755		7,982
Long-term operating lease liabilities	31,795		24,854
Total operating lease liabilities	$	42,550	$	32,836
Finance ROU assets, net	$	47	$	79
Current portion of finance lease liabilities	31		43
Long-term finance lease liabilities	19		41
Total finance lease liabilities	$	50	$	84

During the three and nine months ended June 30, 2023, the Company had operating lease amortization of $2,067 and $6,469, respectively. During the three and nine months ended June 30, 2022, the Company had operating lease amortization of $2,421 and $4,989, respectively.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense related to the Company’s leases for the three and nine months ended June 30, 2023 were:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Operating lease costs:
Fixed operating lease costs	$	2,800	$	2,187	$	8,714	$	5,882
Short-term lease costs	41		11		103		56
Lease income	(794)		(566)		(2,278)		(1,732)
Finance lease costs:
Amortization of ROU asset expense	10		6		31		18
Interest on finance lease liability	1		1		2		2
Total lease cost	$	2,058	$	1,639	$	6,572	$	4,226

The Company serves as lessor to a lessee in six facilities. The gross rental income and underlying lease expense are presented net in the Company’s condensed consolidated statements of operations. The gross rent receivables and underlying lease liabilities are presented gross in the Company’s condensed consolidated balance sheets.

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended June 30,
	2023		2022
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,397	$	2,205
Operating cash flows from finance leases	34		5
Financing cash flows from finance leases	2		1
Non-cash lease activity:
ROU assets obtained in exchange for new operating lease liabilities	$	15,938	$	7,658

The weighted average remaining lease term and discount rate for the Company’s operating and finance leases as of June 30, 2023 and 2022 were:

	June 30, 2023		June 30, 2022
Weighted-average remaining lease term (in years)
Operating lease	6.26		5.60
Finance lease	1.62		2.79
Weighted-average discount rate (in percentages)
Operating lease	7.98	%	5.45	%
Finance lease	4.86	%	4.86	%

Lease duration was determined utilizing renewal options that the Company is reasonably certain to execute.

As of June 30, 2023, maturities of operating and finance lease liabilities for each of the following five fiscal years and a total thereafter were as follows:

	Operating Leases		Finance Leases
2023 (remainder of fiscal year)	$	2,935	$	9
2024	10,863		31
2025	9,097		10
2026	7,787		2
2027	5,833		—
Thereafter	19,193		—
Total minimum future lease payments	55,708		52
Less interest	(13,158)		(2)
Total lease liability	42,550		50

LEASES

11.    LEASES

The Company records a right-of-use (“ROU”) asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASU 842. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. The Company recognizes lease expense for the leases on a straight-line basis over the lease term. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration.

The Company has various operating and finance leases for facilities and equipment. Facilities leases provide office, laboratory, warehouse, or land that the Company uses to conduct its operations. Facilities leases range in duration from two to eleven years, with either renewal options for additional terms as the initial lease term expires, or purchase options. Facilities leases are considered as either operating or financing leases.

Equipment leases provide for office equipment, laboratory equipment or services the Company uses to conduct its operations. Equipment leases range in duration from 21 to 84 months, with either subsequent annual renewals, additional terms as the initial lease term expires, or purchase options.

ROU lease assets and lease liabilities that are reported in the Company’s condensed consolidated balance sheets are as follows:

	June 30, 2023		September 30, 2022
Operating ROU assets, net	$	41,426	$	32,489
Current portion of operating lease liabilities	10,755		7,982
Long-term operating lease liabilities	31,795		24,854
Total operating lease liabilities	$	42,550	$	32,836
Finance ROU assets, net	$	47	$	79
Current portion of finance lease liabilities	31		43
Long-term finance lease liabilities	19		41
Total finance lease liabilities	$	50	$	84

During the three and nine months ended June 30, 2023, the Company had operating lease amortization of $2,067 and $6,469, respectively. During the three and nine months ended June 30, 2022, the Company had operating lease amortization of $2,421 and $4,989, respectively.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense related to the Company’s leases for the three and nine months ended June 30, 2023 were:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Operating lease costs:
Fixed operating lease costs	$	2,800	$	2,187	$	8,714	$	5,882
Short-term lease costs	41		11		103		56
Lease income	(794)		(566)		(2,278)		(1,732)
Finance lease costs:
Amortization of ROU asset expense	10		6		31		18
Interest on finance lease liability	1		1		2		2
Total lease cost	$	2,058	$	1,639	$	6,572	$	4,226

The Company serves as lessor to a lessee in six facilities. The gross rental income and underlying lease expense are presented net in the Company’s condensed consolidated statements of operations. The gross rent receivables and underlying lease liabilities are presented gross in the Company’s condensed consolidated balance sheets.

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended June 30,
	2023		2022
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,397	$	2,205
Operating cash flows from finance leases	34		5
Financing cash flows from finance leases	2		1
Non-cash lease activity:
ROU assets obtained in exchange for new operating lease liabilities	$	15,938	$	7,658

The weighted average remaining lease term and discount rate for the Company’s operating and finance leases as of June 30, 2023 and 2022 were:

	June 30, 2023		June 30, 2022
Weighted-average remaining lease term (in years)
Operating lease	6.26		5.60
Finance lease	1.62		2.79
Weighted-average discount rate (in percentages)
Operating lease	7.98	%	5.45	%
Finance lease	4.86	%	4.86	%

Lease duration was determined utilizing renewal options that the Company is reasonably certain to execute.

As of June 30, 2023, maturities of operating and finance lease liabilities for each of the following five fiscal years and a total thereafter were as follows:

	Operating Leases		Finance Leases
2023 (remainder of fiscal year)	$	2,935	$	9
2024	10,863		31
2025	9,097		10
2026	7,787		2
2027	5,833		—
Thereafter	19,193		—
Total minimum future lease payments	55,708		52
Less interest	(13,158)		(2)
Total lease liability	42,550		50