Leases

6 Months Ended

Jun. 30, 2023

The Company primarily leases manufacturing facilities, distribution centers and office spaces with lease terms expiring through 2031. For the six months ended June 30, 2023, the Company recognized the following lease costs in the accompanying condensed consolidated statement of income:


	(in thousands)
Operating lease expense	$	2,848
Short-term lease expense	37
Variable lease expense	490
Total lease expense	$	3,375

For the three months ended June 30, 2023 and 2022, rent expense included in operating expenses was $1,524,000 and $1,070,000, respectively, and rent expense included in cost of goods sold was $258,000 and $245,000, respectively. For the six months ended June 30, 2023 and 2022, rent expense included in operating expenses was $2,889,000 and $1,714,000, respectively, and rent expense included in cost of goods sold was $486,000 and $505,000, respectively.

The following table presents supplemental information related to operating leases for the six months ended June 30, 2023:


Weighted average remaining lease term	4.55
Weighted average discount rate	5.7		%
Cash paid for amounts included in measurement of lease obligations
Operating cash flows from operating leases	$	2,740

As of June 30, 2023, future lease payments under operating leases were as follows:


	(in thousands)
2023 (remainder)	$	2,933
2024	5,254
2025	3,928
2026	4,044
2027	2,711
Thereafter	2,885
Total future lease payments	21,755
Less: imputed interest	2,854
Total lease liability balance	$	18,901

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. The expected rental income is $229,000 for the remainder of the year ended December 31, 2023.