LEASES AND RELATED PARTY LEASES

3 Months Ended

Mar. 31, 2023

LEASES AND RELATED PARTY LEASESThe Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements. The Company has no finance leases as of March 31, 2023. Many of the Company's leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs). For vehicles, the Company has elected the practical expedient to group lease and non-lease components.

Most facility leases include one or more options to renew. The exercise of lease renewal options is typically at the Company's sole discretion, therefore, the majority of renewals to extend the lease terms are not included in the Right of Use ("ROU") assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates renewal options and when they are reasonably certain of exercise, the renewal period is included in the lease term.

As most of the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Total operating lease expense for the three months ended March 31, 2023 and March 31, 2022 was $6.0 million and $4.9 million respectively, which includes $0.1 million, in related party operating lease expense.

Supplemental balance sheet information related to operating leases were as follows:


Dollars in thousands, except lease term and discount rate	March 31, 2023			December 31, 2022
ROU assets	$	146,514		$	148,284

Current lease liabilities	14,792			14,624
Non-current lease liabilities	156,910			157,420
Total lease liabilities	$	171,702		$	172,044

Weighted average remaining lease term (in years):
Leased facilities	17.1 years			16.9 years
Leased vehicles	2.0 years			2.0 years

Weighted average discount rate:
Leased facilities	5.4		%	5.4		%
Leased vehicles	2.8		%	2.7		%

Supplemental cash flow information related to leases for the three months ended March 31, 2023 and 2022 were as follows:


Dollars in thousands	March 31, 2023		March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,319	$	4,696

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	1,721	$	507

Future minimum lease payments under operating leases at March 31, 2023 were as follows:


Dollars in thousands	Related Parties		Third Parties		Total
Remainder of 2023	$	222	$	15,870	$	16,092
2024	296		21,086		21,382
2025	296		19,753		20,049
2026	296		17,148		17,444
2027	296		16,205		16,501
2028	296		13,951		14,247
Thereafter	246		151,206		151,452
Total minimum lease payments	$	1,948	$	255,219	$	257,167
Less: Imputed interest					85,465
Total lease liabilities					171,702
Less: Current lease liabilities					14,792
Long-term lease liabilities					156,910

There were no future minimum lease payments under finance leases at March 31, 2023.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from Plainsboro Associates, a New Jersey general partnership. Ocirne, Inc., a subsidiary of Provco Industries, owns a 50% % interest in Plainsboro Associates. Provco Industries is the corporate general partner of Tru St. Partnership LLP, a principal stockholder of the Company. The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $0.3 million per year. The current lease agreement also provides (i) a 5-year renewal option for the Company to extend the lease from November 1, 2029 through October 31, 2034 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2034 through October 31, 2039 at the fair market rental rate of the premises.