Leases

12 Months Ended

Dec. 31, 2022

The Company primarily leases manufacturing facilities, distribution centers and office spaces with lease terms expiring through 2031. For the year ended December 31, 2022, the Company recognized the following lease costs in the accompanying consolidated statement of income:


	(in thousands)
Operating lease expense	$	4,522
Short-term lease expense	311
Variable lease expense	817
Total lease expense	$	5,650

For the year ended December 31, 2022, total lease expense included in operating expense and cost of goods sold was $3,446,000 and $1,076,000, respectively. Rent expense for the year ended December 31, 2021 was $1,783,000.

The following table presents supplemental information related to operating leases for the year ended December 31, 2022:


Weighted average remaining lease term	4.27 years
Weighted average discount rate	5.32	%
Right-of-use assets obtained in exchange for operating lease liabilities	10,727
Cash paid for amounts included in measurement of lease obligations
Operating cash flows from operating leases	4,481

As of December 31, 2022, future lease payments under operating leases were as follows:


	(in thousands)
2023	$	5,244
2024	4,097
2025	2,926
2026	3,015
2027	1,149
Thereafter	1,212
Total future lease payments	17,643
Less: imputed interest	(1,509)
Total lease liability balance	$	16,134

As of December 31, 2021, approximate future minimum lease obligations prior to the adoption of Topic 842 were as follows:


	(in thousands)
2022	$	3,055
2023	3,060
2024	1,824
2025	380
2026	374
Thereafter	1,629
	$	10,322

In September 2020, Global Wells entered into an operating lease with an unrelated party as the landlord. The lease generates monthly rental payments from $58,000 to $61,000 over the lease term of 38 months beginning September 9, 2020. Rental income for the years ended December 31, 2022 and December 31, 2021 were $949,000 and $931,000, respectively. The expected rental income is $611,000 for the year ended December 31, 2023.