Leases

12 Months Ended

Dec. 31, 2023

The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2032. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company combines lease and non-lease components for new and reassessed leases.

Some operating leases also contain the option to renew for five years periods at prevailing market rates at the time of renewal. In addition to minimum rent, certain of the leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. For certain leases the Company receives lease incentives, such as tenant improvement allowances, and records those as adjustments to operating lease right-of-use assets and operating leases liabilities on the consolidated balance sheets and amortize the lease incentives on a straight-line basis over the lease term as an adjustment to rent expense. Rent expense, included in selling, general and administrative expenses on the consolidated statements of operations, was $29.4 million, $24.5 million and $16.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. During the year ended December 31, 2023, the Company terminated an agreement for a lease that had not commenced and incurred a charge of approximately $4.2 million.

During the years ended December 31, 2023 and 2022, operating cash outflows relating to operating lease liabilities were $19.5 million and $16.0 million, respectively. Operating lease right-of-use assets obtained in exchange for new operating lease obligations was $0.9 million during the year ended December 31, 2023. Operating lease right-of-use assets obtained in exchange for new operating lease obligations was $54.1 million, with $17.2 million lease incentives obtained, during the year ended December 31, 2022. As of December 31, 2023 and 2022, the Company’s operating leases had a weighted-average remaining term of 6.7 years and 7.4 years, respectively, and weighted-average discount rates of 5.78% and 5.76%, respectively. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain warehouse and distribution contracts that either qualify for the short-term lease recognition exception and/or do not give the Company the right to control the warehouse and/or distribution facilities underlying the contract.

In January 2020, the Company entered into a non-cancellable operating sub-lease for office space expiring in 2024. Rental income recognized for the years ended December 31, 2023, 2022 and 2021 was $0.6 million, $0.4 million and $0.3 million, respectively, included as a reduction of selling, general and administrative expenses on the consolidated statements of operations.

The future payments on the Company’s operating lease liabilities as of December 31, 2023 were as follows (in thousands):


2024	$	18,076
2025	17,122
2026	17,453
2027	12,952
2028	12,163
Thereafter	29,654
Total lease payments	107,420
Less: imputed interest	(18,625)
Total	$	88,795