Note 6 - Leases

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

6. Leases

The Company determines if an arrangement is a lease at inception of the contract. The Company has operating leases for buildings, primarily for office space, manufacturing and distribution, as well as automobiles and printing equipment. As of June 30, 2024, the Company had the following building and facility leases capitalized on the balance sheet:

Location (leases)	Purpose	Approx. Sq. Ft.		Expiration
Americas
Burlington, MA (4)	Corporate headquarters and manufacturing		96,476	December 2034
North Brunswick, NJ (1)	Artegraft biologic business		16,732	October 2029
Burlington, MA (1)	US distribution		12,878	December 2030
Fox River Grove, IL (3)	RestoreFlow allografts business		11,765	November 2025
Vaughn, Canada	Canada sales office and distribution		3,192	February 2026
Chandler, Arizona	US sales office		2,058	August 2025
Europe, Middle East and Africa
Sulzbach, Germany	European headquarters and distribution		21,410	June 2031
Milan, Italy	Italy sales office and distribution		5,705	July 2027
Hereford, England	United Kingdom sales office and distribution		3,575	October 2029
Maisons-Alfort, France	France sales office		3,492	February 2030
Madrid, Spain	Spain sales office		2,260	June 2029
Asia Pacific
Tokyo, Japan	Japan sales office and distribution		4,236	July 2025
Bangkok, Thailand	Thailand sales office and distribution		2,810	August 2026
Kensington, Australia	Australia sales office and distribution		2,551	June 2025
Seoul, Korea	Korea sales office and distribution		2,300	April 2027
Singapore	Asia Pacific headquarters and distribution		1,270	June 2026
Shanghai, China	China sales office and distribution		1,152	August 2024
Ballarat, Australia	Supply facility	Up to 350 acres		December 2030

Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized based on the present value of the future lease minimum payments over the lease term at commencement date. Many of the lease agreements contain renewal or termination clauses that are factored into the determination of the lease term if it is reasonably certain that these options would be exercised. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

None of our noncancelable lease payments include non-lease components such as maintenance contracts; we generally reimburse the landlord for direct operating costs associated with the leased space. We have no subleases, and there are no residual value guarantees associated with, or restrictive covenants imposed by, any of our leases. There were no assets held under capital leases as of June 30, 2024. We elected the package of practical expedients that allow us to omit leases with initial terms of 12 months or less from our balance sheet, which are expensed on a straight-line basis over the life of the lease.

The interest rate implicit in lease agreements is typically not readily determinable, and as such the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is defined as the interest the Company would pay to borrow on a collateralized basis.

Additional information with respect to our leases is as follows:

	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024			2023
	(in thousands)				(in thousands)
Lease cost
Operating lease cost	$	709	$	564	$	1,449		$	1,144
Short-term lease cost		17		158		46			320
Total lease cost	$	726	$	722	$	1,495		$	1,464
Other information
Cash paid for amounts included in the measurement of operating lease liabilities	$	977	$	729	$	1,999		$	1,466
Right-of-use assets obtained in exchange for new operating lease liabilities	$	208	$	841	$	717		$	1,313
Weighted average remaining lease term - operating leases (in years)						7.8			6.8
Weighted average discount rate - operating leases						6.60	%		5.07	%

As of June 30, 2024, the minimum noncancelable operating lease rental commitments with initial or remaining terms of more than one year are as follows:

Remainder of 2024	$	1,873
Year ending December 31,
2025		3,528
2026		2,817
2027		2,587
2028		2,554
2029		2,500
Thereafter		8,525
Adjustment to net present value as of June 30, 2024		(5,975	)
Minimum noncancelable lease liability	$	18,409