Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

Finance Leases

Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the condensed consolidated statements of operations, was immaterial for each of the three-month period ended March 31, 2023 and 2022. Interest expense related to our finance lease obligations, which is included in the “Interest expense, net” line item of the condensed consolidated statements of operations, was immaterial for each of the three-month periods ended March 31, 2023 and 2022.

Operating Leases

We have operating leases primarily related to building space and vehicles. Renewal options are included in the lease term to the extent we are reasonably certain to exercise the option. The exercise of lease renewal options is at our sole discretion. We account for lease components separately from non-lease components. The incremental borrowing rate represents our ability to borrow on a collateralized basis over a similar lease term.

Our expenses and payments for operating leases were as follows:

	Three Months Ended
(Dollars in thousands)	March 31, 2023		March 31, 2022
Operating leases expense	$	991	$	692
Short-term leases expense	$	138	$	122
Payments on operating lease obligations	$	807	$	869

Lease Balances in Statements of Financial Position

Our assets and liabilities balances related to finance and operating leases reflected in the condensed consolidated statements of financial position were as follows:

(Dollars in thousands)	Location in Statements of Financial Position	March 31, 2023		December 31, 2022
Finance lease right-of-use assets	Property, plant and equipment, net	$	1,752	$	1,749
Operating lease right-of-use assets	Other long-term assets	$	13,219	$	13,013
Finance lease obligations, current portion	Finance lease obligations, current portion	$	380	$	498
Finance lease obligations, non-current portion	Finance lease obligations, non-current portion	$	1,323	$	1,295
Total finance lease obligations		$	1,703	$	1,793
Operating lease obligations, current portion	Other accrued liabilities	$	3,175	$	2,842
Operating lease obligations, non-current portion	Other long-term liabilities	$	10,633	$	10,689
Total operating lease obligations		$	13,808	$	13,531

Net Future Minimum Lease Payments

The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of March 31, 2023:

	Finance			Operating
(Dollars in thousands)	Leases Signed	Less: Leases Not Yet Commenced	Leases in Effect	Leases Signed	Less: Leases Not Yet Commenced	Leases in Effect
2023	353	(7)	346	2,953	(87)	2,866
2024	416	(9)	407	3,082	(194)	2,888
2025	416	(10)	406	2,651	(178)	2,473
2026	409	(10)	399	2,216	(111)	2,105
2027	199	(10)	189	1,371	(6)	1,365
Thereafter	149	(2)	147	4,718	—	4,718
Total lease payments	1,942	(48)	1,894	16,991	(576)	16,415
Less: Interest	(197)	6	(191)	(2,647)	40	(2,607)
Present Value of Net Future Minimum Lease Payments	1,745	(42)	1,703	14,344	(536)	13,808

The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:

	Finance Leases	Operating Leases
Weighted Average Remaining Lease Term	4.5 years	6.3 years
Weighted Average Discount Rate	5.55%	4.97%

Leases

Leases

Finance Leases

Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the condensed consolidated statements of operations, was immaterial for each of the three-month period ended March 31, 2023 and 2022. Interest expense related to our finance lease obligations, which is included in the “Interest expense, net” line item of the condensed consolidated statements of operations, was immaterial for each of the three-month periods ended March 31, 2023 and 2022.

Operating Leases

We have operating leases primarily related to building space and vehicles. Renewal options are included in the lease term to the extent we are reasonably certain to exercise the option. The exercise of lease renewal options is at our sole discretion. We account for lease components separately from non-lease components. The incremental borrowing rate represents our ability to borrow on a collateralized basis over a similar lease term.

Our expenses and payments for operating leases were as follows:

	Three Months Ended
(Dollars in thousands)	March 31, 2023		March 31, 2022
Operating leases expense	$	991	$	692
Short-term leases expense	$	138	$	122
Payments on operating lease obligations	$	807	$	869

Lease Balances in Statements of Financial Position

Our assets and liabilities balances related to finance and operating leases reflected in the condensed consolidated statements of financial position were as follows:

(Dollars in thousands)	Location in Statements of Financial Position	March 31, 2023		December 31, 2022
Finance lease right-of-use assets	Property, plant and equipment, net	$	1,752	$	1,749
Operating lease right-of-use assets	Other long-term assets	$	13,219	$	13,013
Finance lease obligations, current portion	Finance lease obligations, current portion	$	380	$	498
Finance lease obligations, non-current portion	Finance lease obligations, non-current portion	$	1,323	$	1,295
Total finance lease obligations		$	1,703	$	1,793
Operating lease obligations, current portion	Other accrued liabilities	$	3,175	$	2,842
Operating lease obligations, non-current portion	Other long-term liabilities	$	10,633	$	10,689
Total operating lease obligations		$	13,808	$	13,531

Net Future Minimum Lease Payments

The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of March 31, 2023:

	Finance			Operating
(Dollars in thousands)	Leases Signed	Less: Leases Not Yet Commenced	Leases in Effect	Leases Signed	Less: Leases Not Yet Commenced	Leases in Effect
2023	353	(7)	346	2,953	(87)	2,866
2024	416	(9)	407	3,082	(194)	2,888
2025	416	(10)	406	2,651	(178)	2,473
2026	409	(10)	399	2,216	(111)	2,105
2027	199	(10)	189	1,371	(6)	1,365
Thereafter	149	(2)	147	4,718	—	4,718
Total lease payments	1,942	(48)	1,894	16,991	(576)	16,415
Less: Interest	(197)	6	(191)	(2,647)	40	(2,607)
Present Value of Net Future Minimum Lease Payments	1,745	(42)	1,703	14,344	(536)	13,808

The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:

	Finance Leases	Operating Leases
Weighted Average Remaining Lease Term	4.5 years	6.3 years
Weighted Average Discount Rate	5.55%	4.97%