Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.2.2
Leases
6 Months Ended
Jun. 30, 2022
Lessee Disclosure [Abstract]  
Leases

Note 15. Leases

 

The Company leases certain manufacturing facilities, office space, and equipment and determines if an arrangement is a lease at inception. Amounts associated with operating leases and financing leases are included in right-of-use lease assets (“ROU assets”), current lease liabilities and long-term lease liabilities in the Company's unaudited consolidated balance sheet.

 

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

 

If the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that we would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates obtained from financial institutions as an input to derive its incremental borrowing rate as the discount rate for the lease.

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, we combine lease and nonlease components.

 

Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more, and the exercise of lease renewal options under these leases is at our sole discretion. Lease terms include the non-cancellable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods. Certain of the Company’s operating leases include variable rental payments based on a percentage change of certain consumer price indices ("CPI"). Variable rental payments are recognized in the consolidated statement of comprehensive income (loss) in the period in which the obligation for those payments is incurred. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

 

 

Balance Sheet Location

 

June 30, 2022

 

Assets

 

 

 

 

 

    Operating

 

Right-of-use operating lease assets, net

 

$

8,081

 

    Financing

 

Right-of-use financing lease assets, net

 

 

2,363

 

    Total lease assets

 

 

 

$

10,444

 

Liabilities

 

 

 

 

 

  Current

 

 

 

 

 

    Operating

 

Current operating lease liability

 

$

2,976

 

    Financing

 

Current financing lease liability

 

 

190

 

  Non-Current

 

 

 

 

 

    Operating

 

Long-term operating lease liability

 

 

5,160

 

    Financing

 

Long-term financing lease liability

 

 

2,227

 

  Total lease liability

 

 

 

$

10,553

 

 

The following table sets forth our lease costs included in our unaudited consolidated statement of comprehensive income (loss):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2022

 

Operating lease cost

 

$

817

 

 

$

1,620

 

Short-term lease cost

 

 

4

 

 

 

8

 

Financing lease cost:

 

 

 

 

 

 

   Amortization of ROU assets

 

 

54

 

 

 

108

 

   Interest on lease liabilities

 

 

34

 

 

 

69

 

Sublease income

 

 

(34

)

 

 

(68

)

Total lease costs

 

$

875

 

 

$

1,737

 

 

 

 

June 30, 2022

 

Weighted-average remaining lease term (years)

 

 

 

Operating

 

 

3.6

 

Financing

 

 

8.6

 

Weighted-average discount rate

 

 

 

Operating

 

 

4.2

%

Financing

 

 

5.6

%

 

 

Maturities of Leases

 

 

 

Operating Leases

 

 

Financing Leases

 

 

Total

 

Remainder of 2022

 

$

1,802

 

 

$

159

 

 

$

1,961

 

2023

 

 

2,951

 

 

 

325

 

 

 

3,276

 

2024

 

 

1,780

 

 

 

335

 

 

 

2,115

 

2025

 

 

1,126

 

 

 

345

 

 

 

1,471

 

2026

 

 

638

 

 

 

356

 

 

 

994

 

Thereafter

 

 

693

 

 

 

1,566

 

 

 

2,259

 

   Total future lease payments

 

 

8,990

 

 

 

3,086

 

 

 

12,076

 

   Less: Discount

 

 

854

 

 

 

669

 

 

 

1,523

 

   Present value of lease liability

 

$

8,136

 

 

$

2,417

 

 

$

10,553

 

 

Disclosures related to period prior to adoption of the Topic 842

 

Operating lease rent expense was $890 for the three months ended June 30, 2021, and $1,657 for the six months ended June 30, 2021.

 

As of December 31, 2021, future minimum lease payment obligations were as follows:

 

 Year

 

Total

 

2022

 

$

3,212

 

2023

 

 

3,027

 

2024

 

 

1,959

 

2025

 

 

1,253

 

2026

 

 

443

 

Thereafter

 

 

328

 

Total future lease payments

 

$

10,222