Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.2.2
Leases
9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Leases Leases
Balance Sheet Presentation
Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification Financial Statement Line Item September 30, 2022 December 31, 2021
Assets Right-of-use assets, operating leases $ 29,575  $ 30,811 
Assets Property, plant and equipment 1,572  1,640 
Current liabilities Current portion of lease liabilities, operating leases 1,041  1,104 
Current liabilities Current portion of lease liabilities, finance leases 290  233 
Non-current liabilities Non-current portion of lease liabilities, operating leases 31,190  32,059 
Non-current liabilities Non-current portion of lease liabilities, finance leases 1,302  1,414 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2022 2021 2022 2021
Operating lease cost1
$ 1,045  $ 1,026  $ 3,137  $ 3,072 
Finance lease cost:
Amortization of right-of-use assets 71  13  204  33 
Interest on finance lease liabilities 27 
Sublease income (32) —  (96) — 
Total lease cost $ 1,093  $ 1,040  $ 3,272  $ 3,107 
1Includes short term leases, which are immaterial
Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of income.
During the fourth quarter of 2021, the Company entered into a sublease agreement with a third party to sublease a portion of the Palmer facility. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $0.1 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million.
Future expected cash receipts from the sublease as of September 30, 2022 are as follows:
(in thousands) Sublease Receipts
Remainder of 2022 $ 32 
2023 129 
2024 132 
2025 134 
2026 137 
Thereafter 1,490 
Total sublease receipts $ 2,054 
Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases as of September 30, 2022 are as follows:
(in thousands) Operating Finance
Remainder of 2022 $ 927  $ 83 
2023 3,645  311 
2024 3,667  257 
2025 3,687  244 
2026 3,703  244 
Thereafter 39,917  570 
Total undiscounted minimum future lease payments 55,546  1,709 
Imputed interest (23,315) (116)
Present value of lease liabilities $ 32,231  $ 1,593 
Lease Term and Discount Rate
Weighted-average remaining lease term September 30, 2022 December 31, 2021
Operating leases 13.84 years 14.43 years
Finance leases 6.25 years 7.07 years
Weighted-average discount rate
Operating leases 8.31  % 8.30  %
Finance leases 2.34  % 2.27  %
During the three and nine months ended September 30, 2022, the Company entered into new operating lease agreements resulting in an additional $0.2 million
Leases Leases
Balance Sheet Presentation
Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification Financial Statement Line Item September 30, 2022 December 31, 2021
Assets Right-of-use assets, operating leases $ 29,575  $ 30,811 
Assets Property, plant and equipment 1,572  1,640 
Current liabilities Current portion of lease liabilities, operating leases 1,041  1,104 
Current liabilities Current portion of lease liabilities, finance leases 290  233 
Non-current liabilities Non-current portion of lease liabilities, operating leases 31,190  32,059 
Non-current liabilities Non-current portion of lease liabilities, finance leases 1,302  1,414 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2022 2021 2022 2021
Operating lease cost1
$ 1,045  $ 1,026  $ 3,137  $ 3,072 
Finance lease cost:
Amortization of right-of-use assets 71  13  204  33 
Interest on finance lease liabilities 27 
Sublease income (32) —  (96) — 
Total lease cost $ 1,093  $ 1,040  $ 3,272  $ 3,107 
1Includes short term leases, which are immaterial
Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of income.
During the fourth quarter of 2021, the Company entered into a sublease agreement with a third party to sublease a portion of the Palmer facility. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $0.1 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million.
Future expected cash receipts from the sublease as of September 30, 2022 are as follows:
(in thousands) Sublease Receipts
Remainder of 2022 $ 32 
2023 129 
2024 132 
2025 134 
2026 137 
Thereafter 1,490 
Total sublease receipts $ 2,054 
Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases as of September 30, 2022 are as follows:
(in thousands) Operating Finance
Remainder of 2022 $ 927  $ 83 
2023 3,645  311 
2024 3,667  257 
2025 3,687  244 
2026 3,703  244 
Thereafter 39,917  570 
Total undiscounted minimum future lease payments 55,546  1,709 
Imputed interest (23,315) (116)
Present value of lease liabilities $ 32,231  $ 1,593 
Lease Term and Discount Rate
Weighted-average remaining lease term September 30, 2022 December 31, 2021
Operating leases 13.84 years 14.43 years
Finance leases 6.25 years 7.07 years
Weighted-average discount rate
Operating leases 8.31  % 8.30  %
Finance leases 2.34  % 2.27  %
During the three and nine months ended September 30, 2022, the Company entered into new operating lease agreements resulting in an additional $0.2 million
Leases Leases
Balance Sheet Presentation
Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification Financial Statement Line Item September 30, 2022 December 31, 2021
Assets Right-of-use assets, operating leases $ 29,575  $ 30,811 
Assets Property, plant and equipment 1,572  1,640 
Current liabilities Current portion of lease liabilities, operating leases 1,041  1,104 
Current liabilities Current portion of lease liabilities, finance leases 290  233 
Non-current liabilities Non-current portion of lease liabilities, operating leases 31,190  32,059 
Non-current liabilities Non-current portion of lease liabilities, finance leases 1,302  1,414 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2022 2021 2022 2021
Operating lease cost1
$ 1,045  $ 1,026  $ 3,137  $ 3,072 
Finance lease cost:
Amortization of right-of-use assets 71  13  204  33 
Interest on finance lease liabilities 27 
Sublease income (32) —  (96) — 
Total lease cost $ 1,093  $ 1,040  $ 3,272  $ 3,107 
1Includes short term leases, which are immaterial
Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of income.
During the fourth quarter of 2021, the Company entered into a sublease agreement with a third party to sublease a portion of the Palmer facility. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $0.1 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million.
Future expected cash receipts from the sublease as of September 30, 2022 are as follows:
(in thousands) Sublease Receipts
Remainder of 2022 $ 32 
2023 129 
2024 132 
2025 134 
2026 137 
Thereafter 1,490 
Total sublease receipts $ 2,054 
Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases as of September 30, 2022 are as follows:
(in thousands) Operating Finance
Remainder of 2022 $ 927  $ 83 
2023 3,645  311 
2024 3,667  257 
2025 3,687  244 
2026 3,703  244 
Thereafter 39,917  570 
Total undiscounted minimum future lease payments 55,546  1,709 
Imputed interest (23,315) (116)
Present value of lease liabilities $ 32,231  $ 1,593 
Lease Term and Discount Rate
Weighted-average remaining lease term September 30, 2022 December 31, 2021
Operating leases 13.84 years 14.43 years
Finance leases 6.25 years 7.07 years
Weighted-average discount rate
Operating leases 8.31  % 8.30  %
Finance leases 2.34  % 2.27  %
During the three and nine months ended September 30, 2022, the Company entered into new operating lease agreements resulting in an additional $0.2 million