Note 5 - Leases

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

5. 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 September 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
	Fox River Grove, IL (2)	RestoreFlow allografts business		14,632	December 2026
	Burlington, MA (1)	US distribution		12,878	December 2030
	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 2025
	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 September 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 September 30,				Nine months ended September 30,
	2024		2023		2024			2023
	(in thousands)				(in thousands)
Lease cost
Operating lease cost	$	487	$	797	$	1,936		$	1,941
Short-term lease cost		17		28		63			348
Total lease cost	$	504	$	825	$	1,999		$	2,289
Other information
Cash paid for amounts included in the measurement of operating lease liabilities	$	758	$	967	$	2,757		$	2,433
Right-of-use assets obtained in exchange for new operating lease liabilities	$	388	$	843	$	1,105		$	2,156
Weighted average remaining lease term - operating leases (in years)						7.8			6.7
Weighted average discount rate - operating leases						6.62	%		5.15	%

As of September 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	$	980
Year ending December 31,
2025		3,725
2026		3,097
2027		2,628
2028		2,576
2029		2,520
Thereafter		8,544
Adjustment to net present value as of September 30, 2024		(5,744	)
Minimum noncancelable lease liability	$	18,326