Financing and Operating Leases

9 Months Ended

Sep. 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
	September 30, 2022		September 30, 2021
Operating lease costs	$	783	$	538
Variable lease costs		184		181
Short-term operating lease costs		—		122
Total expense from operating leases	$	967	$	841
Finance lease costs:
Right-of-use amortization expense	$	449	$	256
Interest on lease liabilities		116		92
Total financing lease costs	$	565	$	348
	Nine Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2021
Operating lease costs	$	2,282	$	1,580
Variable lease costs		470		509
Short-term operating lease costs		—		416
Total expense from operating leases	$	2,752	$	2,505
Finance lease costs:
Right-of-use amortization expense	$	1,233	$	751
Interest on lease liabilities		334		297
Total financing lease costs	$	1,567	$	1,048

The following table reflects balances for operating and financing leases:

		September 30,		December 31,
		2022		2021
Operating leases:
Operating lease right-of-use assets, net of amortization	$	11,341	$	12,069
Current operating lease liabilities	$	2,304	$	1,857
Non-current operating lease liabilities		9,514		10,703
Total operating lease liabilities	$	11,818	$	12,560
Financing leases:
Property, equipment and leasehold improvements	$	14,375	$	9,088
Accumulated depreciation		(2,644)		(2,451)
Total financing leases in property, equipment and leasehold ___improvements, net	$	11,731	$	6,637
Current financing lease liabilities	$	3,141	$	2,257
Non-current financing lease liabilities		7,110		2,668
Total financing lease liabilities	$	10,251	$	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 September 30, 2022 were as follows:

		Operating		Financing
		Leases		Leases
2022 (excluding the nine months ended September 30, 2022)	$	788	$	1,040
2023		3,164		3,626
2024		2,896		2,828
2025		2,090		2,537
2026		1,958		1,175
Thereafter		3,657		271
Total lease payments		14,553		11,477
Less imputed interest		(2,735)		(1,226)
Total	$	11,818	$	10,251