Leases

6 Months Ended

Jun. 30, 2022

Leases

Leases

Note 5 - Leases

The Company has various lease agreements with terms up to 11 years, including leases of buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. common area maintenance, charges, utilities and property taxes). The Company elected the package of practical expedients permitted under the transition guidance, which allows us to carry forward our historical lease classification, our assessment on whether a contract contains a lease, and our initial direct costs for any leases that existed prior to the adoption of the new standard. We also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of operations on a straight line basis over the lease term. The Company’s lease agreements do not contain any material residual value, guarantees or material restrictive covenants.

Operating leases are included in Right of use asset, Accrued expenses and other current liabilities, and Long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

Operating lease expense of $1.3 million and $1.6 million, for the six months ended June 30, 2022 and 2021, respectively, is included in Selling, general and administrative expenses on the consolidated statements of operations.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2022.

	June 30,
Maturity of Lease Payments	2022
(in thousands)	(unaudited)
2022 (remaining)	$	1,818
-2023		2,051
-2024		1,658
-2025		1,285
-Thereafter		2,916
Total undiscounted operating lease payments		9,728
Less imputed interest		(1,847)
Present value of operating lease liabilities	$	7,881

Balance Sheet Classification

	June 30,
	2022
(in thousands)	(unaudited)
Current lease liabilities (recorded in Accrued expenses and other current liabilities)	$	1,598
Long-term lease liabilities		6,283
Total operating lease liabilities	$	7,881

Other Information

	June 30,
	2022
Weighted-average remaining term for operating leases	3.87	years
Weighted-average discount rate for operating leases	8.24	%

Cash Flows

Cash paid for amounts included in the present value of operating lease liabilities was $1.3 million during the six months ended June 30, 2022 and is included in operating cash flows.