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LEASES
 3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
LEASES LEASES
We lease office space, warehouse and distribution space, and equipment under non-cancelable operating and finance leases expiring at various dates through 2029.
We determine whether an arrangement is a lease at inception, based on the (1) conveyed rights to obtain substantially all economic benefits from using the asset and (2) the right to direct the uses to which the asset is put.
Our lease population does not include any residual value guarantees, and therefore none were considered in the calculation of the lease balances. We have leases with variable payments, most commonly in the form of common area maintenance charges which are based on actual costs incurred. These variable payments were excluded from the right-of-use asset and lease liability balances since they are not fixed or in-substance fixed payments. We have lease agreements with lease and non-lease components. We elected the practical expedient to account for lease and non-lease components as a single lease component.
For leases with terms greater than 12 months, right-of-use assets and lease liabilities are recognized at the implementation date of Topic 842 or lease commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, we utilize our incremental borrowing rate. Our lease agreements generally do not provide a readily determinable implicit rate nor is it available to us from our lessors. Instead, we estimate our incremental borrowing rate based on information available at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the condensed consolidated financial statements.
The components of lease expense were as follows:
(in thousands)Three Months Ended March 31, 2022
Operating lease costs$1,246 
Variable lease costs760 
Short-term lease costs326 
Finance lease cost
Amortization of right-of-use assets89
Interest on lease liabilities6
Total lease expense$2,427 
The table below summarizes our scheduled future minimum lease payments under operating and finance leases, recorded on the condensed consolidated balance sheet as of March 31, 2022:
(in thousands) Operating LeasesFinance Leases
For the nine months ending December 31, 2022$4,852 $397 
20236,469 368 
20245,694 139 
20254,150 89 
20262,316 — 
Thereafter 3,297 — 
Total $26,778 $993 
Less: amounts representing interest $(2,550)$(52)
Net present value of lease obligations $24,228 $941 
The following table presents the balances for operating and finance right-of-use assets and lease liabilities:
(in thousands) ClassificationMarch 31, 2022
Assets
Operating lease assetsRight-of-use assets$18,574 
Finance lease assetsProperty and equipment940 
Total lease assets$19,514 
Liabilities
Current liabilities
Operating lease liabilitiesOperating lease liabilities$5,605 
Finance lease liabilitiesFinance lease obligations501
Non-current liabilities
Operating lease liabilitiesOperating lease liabilities18,623 
Finance lease liabilitiesFinance lease obligations440 
Total lease liabilities$25,169 
The table below presents additional information related to our leases as of March 31, 2022:
(in thousands)
Three Months Ended March 31, 2022
Supplemental cash flow information and non-cash activity:
Cash paid for amounts related to lease liabilities:
Operating cash flows from finance leases (interest)$6 
Operating cash flows from operating leases$1,541 
Financing cash flows from finance leases (principal payments)$86 
Weighted Average Remaining Lease Term (in years):
Operating leases4.7
Finance leases2.3
Weighted Average Discount Rate:
Operating leases4.1 %
Finance leases3.9 %
LEASES LEASES
We lease office space, warehouse and distribution space, and equipment under non-cancelable operating and finance leases expiring at various dates through 2029.
We determine whether an arrangement is a lease at inception, based on the (1) conveyed rights to obtain substantially all economic benefits from using the asset and (2) the right to direct the uses to which the asset is put.
Our lease population does not include any residual value guarantees, and therefore none were considered in the calculation of the lease balances. We have leases with variable payments, most commonly in the form of common area maintenance charges which are based on actual costs incurred. These variable payments were excluded from the right-of-use asset and lease liability balances since they are not fixed or in-substance fixed payments. We have lease agreements with lease and non-lease components. We elected the practical expedient to account for lease and non-lease components as a single lease component.
For leases with terms greater than 12 months, right-of-use assets and lease liabilities are recognized at the implementation date of Topic 842 or lease commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, we utilize our incremental borrowing rate. Our lease agreements generally do not provide a readily determinable implicit rate nor is it available to us from our lessors. Instead, we estimate our incremental borrowing rate based on information available at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the condensed consolidated financial statements.
The components of lease expense were as follows:
(in thousands)Three Months Ended March 31, 2022
Operating lease costs$1,246 
Variable lease costs760 
Short-term lease costs326 
Finance lease cost
Amortization of right-of-use assets89
Interest on lease liabilities6
Total lease expense$2,427 
The table below summarizes our scheduled future minimum lease payments under operating and finance leases, recorded on the condensed consolidated balance sheet as of March 31, 2022:
(in thousands) Operating LeasesFinance Leases
For the nine months ending December 31, 2022$4,852 $397 
20236,469 368 
20245,694 139 
20254,150 89 
20262,316 — 
Thereafter 3,297 — 
Total $26,778 $993 
Less: amounts representing interest $(2,550)$(52)
Net present value of lease obligations $24,228 $941 
The following table presents the balances for operating and finance right-of-use assets and lease liabilities:
(in thousands) ClassificationMarch 31, 2022
Assets
Operating lease assetsRight-of-use assets$18,574 
Finance lease assetsProperty and equipment940 
Total lease assets$19,514 
Liabilities
Current liabilities
Operating lease liabilitiesOperating lease liabilities$5,605 
Finance lease liabilitiesFinance lease obligations501
Non-current liabilities
Operating lease liabilitiesOperating lease liabilities18,623 
Finance lease liabilitiesFinance lease obligations440 
Total lease liabilities$25,169 
The table below presents additional information related to our leases as of March 31, 2022:
(in thousands)
Three Months Ended March 31, 2022
Supplemental cash flow information and non-cash activity:
Cash paid for amounts related to lease liabilities:
Operating cash flows from finance leases (interest)$6 
Operating cash flows from operating leases$1,541 
Financing cash flows from finance leases (principal payments)$86 
Weighted Average Remaining Lease Term (in years):
Operating leases4.7
Finance leases2.3
Weighted Average Discount Rate:
Operating leases4.1 %
Finance leases3.9 %