Leases

9 Months Ended

Jun. 30, 2024

The Company has operating leases for its corporate offices, warehouses, vehicles, and equipment. During the nine months ended June 30, 2024, the Company entered into a lease for warehouse space in Brownsburg, IN, in order to continue serving our RSCG buyers and sellers following the expiration of our Plainfield, IN lease.

The operating leases have remaining terms of up to 4.9 years. Some of the leases have options to extend or terminate the leases. The exercise of such options is generally at the Company’s discretion. The lease agreements do not contain any significant residual value guarantees or restrictive covenants. The Company also subleases excess corporate office space. The Company's finance leases and related balances are not significant.

The components of lease expense are:


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Finance lease – lease asset amortization	$	18		$	20		$	56		$	59
Finance lease – interest on lease liabilities		4			4			9			12
Operating lease cost		1,418			1,327			4,046			4,011
Short-term lease cost		90			78			214			348
Variable lease cost (1)		282			199			889			948
Sublease income		(3	)		(27	)		(18	)		(78	)
Total net lease cost	$	1,809		$	1,601		$	5,196		$	5,300

(1)

Variable lease costs primarily relate to the Company's election to combine non-lease components such as common area maintenance, insurance and taxes related to its real estate leases. To a lesser extent, the Company's equipment leases have variable costs associated with usage and subsequent changes to costs based upon an index.

Maturities of lease liabilities are:


	June 30, 2024
	Operating Leases			Finance Leases
Remainder of 2024	$	1,422		$	21
2025		5,869			68
2026		4,202			65
2027		2,404			12
2028		2,050			—
Thereafter		1,196			—
Total lease payments (1)	$	17,143		$	166
Less: imputed interest (2)		(1,705	)		(10	)
Total lease liabilities	$	15,439		$	156

(1)

The weighted average remaining lease term is 3.5 years for operating leases and 2.4 years for finance leases.

(2)

The weighted average discount rate is 6.1 % for operating leases and 5.6 % for finance leases.

Supplemental disclosures of cash flow information related to leases are:


	Nine Months Ended June 30,
	2024		2023
Cash paid for amounts included in operating lease liabilities	$	3,437	$	3,598
Cash paid for amounts included in finance lease liabilities	$	79	$	75
Non-cash: lease liabilities arising from new operating lease assets obtained	$	5,691	$	—
Non-cash: lease liabilities arising from new finance lease assets obtained	$	—	$	—
Non-cash: adjustments to lease assets and liabilities(1)	$	360	$	408

(1)

These include adjustments due to lease modifications, renewals, and other related adjustments.

Lease liabilities increased during the nine months ended June 30, 2024, due to the commencement of a lease for new warehouse space in Brownsburg, IN during the period, as well as new leases relating to the Sierra acquisition. See Note 3 - Sierra Acquisition for further information.