Financing and Operating Leases

6 Months Ended

Jun. 30, 2022

Financing and Operating Leases

Financing and Operating Leases

9. Financing and Operating Leases

Right-of-use (“ROU”) represents the right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. A lease is deemed to exist when the Company has the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration paid. The right to control is deemed to occur when the Company has the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets.

The components of operating and finance lease costs were as follows:

	Three Months Ended		Three Months Ended
	June 30, 2022		June 30, 2021
Operating lease costs	$	783	$	532
Variable lease costs		147		165
Short-term operating lease costs		—		122
Total expense from operating leases	$	930	$	819
Finance lease costs:
Right-of-use amortization expense	$	394	$	309
Interest on lease liabilities		128		99
Total financing lease costs	$	522	$	408
	Six Months Ended		Six Months Ended
	June 30, 2022		June 30, 2021
Operating lease costs	$	1,499	$	1,041
Variable lease costs		286		329
Short-term operating lease costs		—		294
Total expense from operating leases	$	1,785	$	1,664
Finance lease costs:
Right-of-use amortization expense	$	784	$	602
Interest on lease liabilities		218		205
Total financing lease costs	$	1,002	$	807

The following table reflects balances for operating and financing leases:

		June 30,		December 31,
		2022		2021
Operating leases:
Operating lease right-of-use assets, net of amortization	$	11,883	$	12,069
Current operating lease liabilities	$	2,255	$	1,857
Non-current operating lease liabilities		10,109		10,703
Total operating lease liabilities	$	12,364	$	12,560
Financing leases:
Property, equipment and leasehold improvements	$	12,166	$	9,088
Accumulated depreciation		(3,221)		(2,451)
Total financing leases in property, equipment and leasehold ___improvements, net	$	8,945	$	6,637
Current financing lease liabilities	$	2,494	$	2,257
Non-current financing lease liabilities		4,078		2,668
Total financing lease liabilities	$	6,572	$	4,925

Finance and operating lease ROU assets are recorded in “Plant, equipment, leasehold improvements and operating lease right-of-use assets, net.” Financing and operating lease liabilities are recorded in “Accrued expenses” and “Other long-term liabilities.”

Future cash payment with respect to lease obligations as of June 30, 2022 were as follows:

		Operating		Financing
		Leases		Leases
2022 (excluding the six months ended June 30, 2022)	$	1,576	$	1,696
2023		3,164		2,381
2024		2,896		1,583
2025		2,090		1,292
2026		1,958		318
Thereafter		3,657		41
Total lease payments		15,341		7,311
Less imputed interest		(2,977)		(739)
Total	$	12,364	$	6,572