Leases

12 Months Ended

Dec. 31, 2022

Leases.

Leases

Note 16: Leases

The Company recognizes leases with a duration greater than 12 months on the balance sheet with a Right-Of-Use (ROU) asset and liability at the present value of lease payments over the term. Leases that include rental escalation clauses or renewal options are factored into the determination of lease payments when appropriate. There are no residual value guarantees on the existing leases. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company’s leases do not provide an implicit rate of return. ROU assets exclude lessor incentives received.

The Company subleases certain real estate to third parties. Our sublease portfolio consists solely of operating leases. As of December 31, 2022, the Company had no operating leases that had not yet commenced. During the year ended December 31, 2022, the Company entered into new leases or modified existing leases that resulted in an increase of ROU assets in exchange for operating lease liabilities as disclosed below.

During the year ended December 31, 2022, the Company purchased assets under an arrangement that was recorded as a finance lease, at the end of its lease term. In addition, the Company continued the short-term leasing arrangement for certain operating equipment until it ended in 2022.

Lease Position:

The table below represents the assets and liabilities related to operating leases recorded on the balance sheet:

December 31,	2022		2021
(in thousands)
Assets:
Finance lease right-of-use assets	$	—	$	20,327
Operating lease right-of-use assets	$	28,864	$	24,572
Liabilities:
Current portion of finance lease		—		20,194
Current portion of operating leases	$	10,728	$	6,387
Long-term operating lease liabilities		19,517		19,719
Total operating lease liabilities	$	30,245	$	26,106

Lease costs:

The components of finance lease are included in depreciation and amortization and interest expense; operating lease expense are included in costs of goods sold, and selling, general and administrative expenses in the consolidated statements of operations as disclosed below.

Year ended December 31,	2022		2021		2020
(in thousands)
Finance lease cost
Amortization of leased assets	$	3,390	$	1,452	$	—
Interest on lease liabilities		283		116		—
Total finance lease cost	$	3,673	$	1,568	$	—
Operating lease cost	$	9,615	$	7,580	$	8,373
Short-term lease cost		9,192		3,626		2,577
Variable lease cost		647		772		624
Sublease income		(1,021)		(831)		(295)
Total operating lease cost	$	18,433	$	11,147	$	11,279
Total lease cost	$	22,106	$	12,715	$	11,279

Other information:
As of December 31,	2022			2021
Cash paid for amounts included in the measurement of lease liabilities – operating leases (in thousands)	$	8,742		$	10,151
ROU assets obtained in exchange for operating lease liabilities (in thousands)	$	12,882		$	5,974
ROU assets obtained in exchange for finance lease liabilities (in thousands)	$	—		$	21,778
Weighted average remaining lease term – finance lease (months)		—			8
Weighted average remaining lease term – operating leases (years)		5.14			5.41
Weighted average discount rate – finance lease		—	%		1.68	%
Weighted average discount rate – operating leases		3.93	%		2.29	%

Lease Commitments:

Maturity of lease liabilities - Operating Leases:

As of December 31,	2022		2021
(in thousands)
2022	$	—	$	7,015
2023		12,091		4,483
2024		6,164		3,619
2025		4,001		2,667
2026		3,380		2,421
2027		2,615		—
Thereafter		6,618		7,742
Total lease payments		34,869		27,947
Less: Amounts representing interest		(4,623)		(1,841)
Present value of lease liabilities	$	30,246	$	26,106