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LEASES
 3 Months Ended
Mar. 31, 2023
Leases [Abstract]  
LEASES 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 Accounting Standards Codification (“ASC”) 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has no significant lease agreements in place for which the Company is a lessor. 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 leases certain industrial spaces, office spaces, land, and equipment. Some leases include one or more options to renew, with renewal terms that can extend the lease term from generally 1 to 5 years. The exercise of lease renewal options is at the Company’s sole discretion, and are included in the lease term only to the extent such renewal options are reasonably certain of being exercised at lease commencement. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
During the three months ended March 31, 2023, leased assets obtained in exchange for new operating lease liabilities totaled approximately $0.3 million. During the three months ended March 31, 2022, leased assets obtained in exchange for new operating lease liabilities totaled approximately $1.3 million. As of March 31, 2023, obligations related to operating leases that the Company has executed but have not yet commenced were insignificant. Subsequent to March 31, 2023, the Company executed operating leases and obligations related to these leases totaling approximately $0.4 million on a non-discounted basis, which the Company generally expects to be recognized over the next five years.
As described in the Company Annual Report on Form 10-K for the year ended December, 31, 2022, during 2022, the Company entered into sale-leaseback-sublease transactions. Such contracts were entered into in contemplation of each other and are thus recorded on a net basis. The net revenue from these contracts was insignificant for the three months ended March 31, 2023 and 2022. In addition, certain of the transactions occurred with a related party—such transactions were at market value and arm’s length. As of March 31, 2023, the Company has no other significant lease agreements in place for which the Company is a lessor or sublessor.
Leased assets and liabilities included within the Condensed Consolidated Balance Sheets consist of the following (in thousands):
ClassificationMarch 31, 2023December 31, 2022
Right-of-Use Assets
OperatingOther assets$21,747 $23,003 
Liabilities
Current
OperatingOther accrued liabilities$5,994 $6,120 
Noncurrent
OperatingOther non-current liabilities15,753 16,883 
Total lease liabilities$21,747 $23,003 
Lease costs included in the Condensed Consolidated Statements of Operations consist of the following (in thousands):
ClassificationThree Months Ended
March 31, 2023		Three Months Ended
March 31, 2022
Operating lease costCost of sales, selling expenses and general and administrative expense$1,871 $1,109 
Finance lease cost
Amortization of ROU leased assetsDepreciation and amortization within Cost of sales— 36 
Interest on lease liabilitiesInterest expense— 1 
Net lease cost$1,871 $1,146 
Maturity of the Company’s lease liabilities as of March 31, 2023 is as follows (in thousands):
Operating LeasesFinance LeasesTotal
2023 (remainder)$5,301 $— $5,301 
20246,083 — 6,083 
20255,019 — 5,019 
20264,463 — 4,463 
20272,364 — 2,364 
Thereafter794 — 794 
Total lease payments$24,024 $— $24,024 
Less: interest2,277 — 
Present value of lease payments$21,747 $— 
As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Remaining lease term and discount rates are as follows:
March 31, 2023December 31, 2022
Weighted average remaining lease term (years)
Operating leases4.14.3
Weighted average discount rate
Operating leases4.91 %4.92 %
Lease costs included in the Condensed Consolidated Statements of Cash Flows are as follows (in thousands):
Three Months Ended
March 31, 2023		Three Months Ended
March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$1,895 $1,120 
Operating cash flows from finance leases$— $1 
Financing cash flows from finance leases$— $59 
LEASES 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 Accounting Standards Codification (“ASC”) 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has no significant lease agreements in place for which the Company is a lessor. 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 leases certain industrial spaces, office spaces, land, and equipment. Some leases include one or more options to renew, with renewal terms that can extend the lease term from generally 1 to 5 years. The exercise of lease renewal options is at the Company’s sole discretion, and are included in the lease term only to the extent such renewal options are reasonably certain of being exercised at lease commencement. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
During the three months ended March 31, 2023, leased assets obtained in exchange for new operating lease liabilities totaled approximately $0.3 million. During the three months ended March 31, 2022, leased assets obtained in exchange for new operating lease liabilities totaled approximately $1.3 million. As of March 31, 2023, obligations related to operating leases that the Company has executed but have not yet commenced were insignificant. Subsequent to March 31, 2023, the Company executed operating leases and obligations related to these leases totaling approximately $0.4 million on a non-discounted basis, which the Company generally expects to be recognized over the next five years.
As described in the Company Annual Report on Form 10-K for the year ended December, 31, 2022, during 2022, the Company entered into sale-leaseback-sublease transactions. Such contracts were entered into in contemplation of each other and are thus recorded on a net basis. The net revenue from these contracts was insignificant for the three months ended March 31, 2023 and 2022. In addition, certain of the transactions occurred with a related party—such transactions were at market value and arm’s length. As of March 31, 2023, the Company has no other significant lease agreements in place for which the Company is a lessor or sublessor.
Leased assets and liabilities included within the Condensed Consolidated Balance Sheets consist of the following (in thousands):
ClassificationMarch 31, 2023December 31, 2022
Right-of-Use Assets
OperatingOther assets$21,747 $23,003 
Liabilities
Current
OperatingOther accrued liabilities$5,994 $6,120 
Noncurrent
OperatingOther non-current liabilities15,753 16,883 
Total lease liabilities$21,747 $23,003 
Lease costs included in the Condensed Consolidated Statements of Operations consist of the following (in thousands):
ClassificationThree Months Ended
March 31, 2023		Three Months Ended
March 31, 2022
Operating lease costCost of sales, selling expenses and general and administrative expense$1,871 $1,109 
Finance lease cost
Amortization of ROU leased assetsDepreciation and amortization within Cost of sales— 36 
Interest on lease liabilitiesInterest expense— 1 
Net lease cost$1,871 $1,146 
Maturity of the Company’s lease liabilities as of March 31, 2023 is as follows (in thousands):
Operating LeasesFinance LeasesTotal
2023 (remainder)$5,301 $— $5,301 
20246,083 — 6,083 
20255,019 — 5,019 
20264,463 — 4,463 
20272,364 — 2,364 
Thereafter794 — 794 
Total lease payments$24,024 $— $24,024 
Less: interest2,277 — 
Present value of lease payments$21,747 $— 
As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Remaining lease term and discount rates are as follows:
March 31, 2023December 31, 2022
Weighted average remaining lease term (years)
Operating leases4.14.3
Weighted average discount rate
Operating leases4.91 %4.92 %
Lease costs included in the Condensed Consolidated Statements of Cash Flows are as follows (in thousands):
Three Months Ended
March 31, 2023		Three Months Ended
March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$1,895 $1,120 
Operating cash flows from finance leases$— $1 
Financing cash flows from finance leases$— $59