Note 11 - Leases

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Lessee Operating and Finance Leases [Text Block]

11. LEASES

The Company leases various property and equipment under operating lease arrangements. The Company recognizes operating lease assets and liabilities on the balance sheet and discloses key information regarding leasing arrangements. The Company has elected to apply the short-term lease exception to all leases of one year or less.

 As of December 31, 2023, the right-of-use (“ROU”) asset had a balance of $15,593 which is included in the “Operating lease right-of-use assets” line item of these consolidated financial statements and current and non-current lease liabilities relating to the ROU asset of $1,851 and $15,888, respectively, and are included in the “Current portion of operating lease obligations” and “Long-term operating lease obligations, net of current portion” line items of these consolidated financial statements. As of December 31, 2022, the ROU asset had a balance of $16,396 and current and non-current lease liabilities relating to the ROU asset of $1,882 and $16,696, respectively. The discount rates used for leases accounted for under Topic 842 are based on an interest rate yield curve developed for the leases in the Company’s lease portfolio. 

Lease terms generally range from 3 to 15 years with renewal options for extended terms. Some of the Company’s facility leases include options to renew. The exercise of the renewal options is at the Company’s discretion. Therefore, the majority of renewals to extend the lease terms are not included in ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them. Certain leases contain rent escalation clauses that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the lease term. Operating rental expense for the years ended December 31, 2023 and 2022 was $4,201 and $4,253, respectively.

In addition, the Company has entered into finance lease arrangements to finance property and equipment and assumed finance lease obligations in connection with certain acquisitions. Finance rental expense for the years ended December 31, 2023 and 2022 was $1,790 and $1,639, respectively.

Amortization expense recorded in connection with assets recorded under finance leases was $1,263 and $1,172 for the years ended December 31, 2023 and 2022, respectively.

Quantitative information regarding the Company’s leases is as follows:

	Year Ended December 31,
	2023			2022
Components of lease cost
Finance lease cost components:
Amortization of finance lease assets	$	1,263		$	1,172
Interest on finance lease liabilities		527			467
Total finance lease costs		1,790			1,639
Operating lease cost components:
Operating lease cost		2,792			2,839
Short-term lease cost		361			707
Variable lease cost (1)		1,260			898
Sublease income		(212	)		(191	)
Total operating lease costs		4,201			4,253
Total lease cost	$	5,991		$	5,892
Supplemental cash flow information related to our operating leases is as follows for the twelve months ended December 31, 2023 and 2022:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	3,460		$	3,496
Right-of-use assets obtained in exchange for new
operating lease liabilities	$	983		$	187
Weighted-average remaining lease term-finance leases at end of period (in years)		3.2			3.3
Weighted-average remaining lease term-operating leases at end of period (in years)		7.1			8.1
Weighted-average discount rate-finance leases at end of period		6.1	%		6.0	%
Weighted-average discount rate-operating leases at end of period		8.5	%		8.7	%

(1) Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company’s leased facilities and equipment.

Amortization associated with new right-of-use assets obtained in exchange for new operating lease liabilities is $5 and $20 for the years ended December 31, 2023 and 2022, respectively. 

As of December 31, 2023, future minimum lease payments under finance leases and operating leases were as follows:

	Finance			Operating
	Leases			Leases			Total
2024	$	2,416		$	3,351		$	5,767
2025		1,193			3,447			4,640
2026		937			3,442			4,379
2027		671			3,144			3,815
2028		671			3,153			3,824
2029 and thereafter		344			7,803			8,147
Total lease payments		6,232			24,340			30,572
Less—portion representing interest		(707	)		(6,601	)		(7,308	)
Present value of lease obligations		5,525			17,739			23,264
Less—current portion of lease obligations		(2,153	)		(1,851	)		(4,004	)
Long-term portion of lease obligations	$	3,372		$	15,888		$	19,260