Leases

12 Months Ended

Dec. 31, 2023

Leases.

Leases

Note 19: Leases

The Company recognizes operating and finance 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, 2023, the Company had no operating leases that had not yet commenced. During the year ended December 31, 2023, 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, 2023, the Company assumed certain leases as part of its acquisition of Spinnaker. The disclosures below include the information related to the leases after the acquisition. See note tilted Business Acquisition for further information related to those leases.

Lease Position:

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

December 31,	2023		2022
(in thousands)
Assets:
Operating lease right-of-use assets	$	24,537	$	28,864
Finance lease right-of-use assets		1,036		—
Total lease assets	$	25,573	$	28,864
Liabilities:
Current portion of operating leases	$	7,367	$	10,728
Current portion of finance lease liabilities and finance obligations		375		—
Long-term finance lease liabilities		819		—
Long-term operating lease liabilities		18,600		19,517
Total lease liabilities	$	27,161	$	19,517

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,	2023		2022		2021
(in thousands)
Finance lease cost
Amortization of leased assets	$	129	$	3,390	$	1,452
Interest on lease liabilities		13		283		116
Total finance lease cost	$	142	$	3,673	$	1,568

Interest on finance obligation	$	35	$	—	$	—
Operating lease cost	$	15,096	$	9,615	$	7,580
Short-term lease cost		1,862		9,192		3,626
Variable lease cost		774		647		772
Sublease income		(1,400)		(1,021)		(831)
Total operating lease cost	$	16,332	$	18,433	$	11,147
Total lease cost	$	16,509	$	22,106	$	12,715

Other Information:

As of December 31,	2023			2022
Cash paid for amounts included in the measurement of lease liabilities – operating leases (in thousands)	$	12,475		$	8,742
Cash paid for amounts included in the measurement of lease liabilities – finance lease and finance obligations (in thousands)	$	515		$	—
ROU assets obtained in exchange for operating lease liabilities (in thousands)	$	8,151		$	12,882
Weighted average remaining lease term – finance lease (years)		4.00			—
Weighted average remaining lease term – operating leases (years)		5.06			5.14
Weighted average remaining term – finance obligations (months)		8.00			—
Weighted average discount rate – finance lease		2.3	%		—	%
Weighted average discount rate – operating leases		4.42	%		3.93	%
Weighted average discount rate – finance obligations		8.40	%		—	%

Lease Commitments:

Maturity of lease liabilities and finance obligations:

As of December 31,	2023
(in thousands)
2024	$	9,197
2025		5,856
2026		4,957
2027		3,863
2028		2,291
Thereafter		4,487
Total lease payments		30,651
Less: Amounts representing interest		(3,490)
Present value of lease liabilities	$	27,161