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Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
The Company leases clinics, office buildings, and certain equipment under noncancellable financing and operating lease agreements that expire at various dates through November 2031. See Note 2 for a summary of the Company’s policies relating to leases, and the Company's adoption of Accounting Standards Update 2016-02, Leases (ASC 842), as of January 1, 2022.
The initial terms of operating leases range from 0 to 10 years and certain leases provide for free rent periods, periodic rent increases, and renewal options. Monthly payments for these leases range from $0 to $37. All lease agreements generally require the Company to pay maintenance, repairs, property taxes, and insurance costs, which are generally variable amounts based on actual costs incurred during each applicable period.
The Company has determined that periods covered by options to extend the Company's leases are excluded from the lease terms as it is not reasonably certain the Company will exercise such options. Operating lease expenses, including expenses related to short-term leases, were $6,364, $4,281, and $3,680, respectively, for the years ended December 31, 2022, 2021, and 2020.
Lease Expense
The components of lease expense were as follows for the year ended December 31, 2022:
(in thousands)Year Ended December 31, 2022
Operating lease costs:$6,002 
Finance lease costs:
Amortization of ROU asset$62 
Interest expense$8 
Other lease costs:
Short-term lease costs$362 
Variable lease costs$967 
Total lease costs$7,401 
Operating and other lease costs are presented as part of selling, general, and administrative expenses. The components of finance lease costs appear in depreciation and amortization and interest expense.
Maturity of Lease Liabilities
The aggregate future lease payments for the Company's leases in years subsequent to December 31, 2022 are as follows:
(in thousands)Operating LeasesFinance Leases
2023$6,637 $84 
20246,202 77 
20255,576 42 
20264,834 39 
20273,877 29 
Thereafter 4,600 — 
Total future lease payment$31,726 $271 
Less: amount representing interest (4,168)(30)
Present value of future lease payment (lease liability)$27,558 $241 
Reported as:
Lease liabilities, current$5,498 $72 
Lease liabilities, noncurrent22,060 169 
Total lease liabilities $27,558 $241 
Lease Term and Discount Rate
The following table provides the weighted average remaining lease terms and weighted average discount rates for the Company's leases as of December 31, 2022:
December 31, 2022
Weighted-average remaining lease term (in years)
Operating 5.32
Finance 3.75
Weighted-average discount rate
Operating4.94 %
Finance6.02 %
Supplemental Cash Flow Information
The following table provides certain cash flow and supplemental noncash information related to the Company's lease liabilities for the year ended December 31, 2022.
(in thousands)Year Ended December 31, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
  Operating cash payment from operating leases$5,342 
  Financing cash payments for finance leases73 
Lease liabilities arising from obtaining right-of-use assets:
  Operating leases$30,800 
  Finance leases203 
During the year ended December 31, 2022, ROU assets of $11,668 were obtained in exchange for lease obligations.
Lease Modifications
During the year ended December 31, 2022, the Company expanded its lease space and extended its lease term for two clinics and two corporate offices in California. These expansions and extensions constitute lease modifications that qualify as a change of accounting for the original leases and not separate contracts. Accordingly, in the year ended December 31, 2022, the
Company recognized the difference of $2,186 as an increase to the operating lease liability; $2,052, net of lease incentives, as an increase to operating lease right-of-use asset, and $39 as a net increase to rent expense.
Operating Lease Contractual Commitments
As of December 31, 2021, future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments were:
(in thousands)Capital leases Operating leases
Year ending December 31:
2022$37 $4,263 
202337 3,946 
202429 3,291 
2025— 2,718 
2026— 1,954 
Thereafter— 1,044 
Total minimum lease payments$103 $17,216 
Less: amount representing interest (6% interest rate)
(7)
Present value of net minimum capital lease payments$96 
Less current installments of obligations under capital leases(33)
Obligations under capital leases, excluding current installments$63 
Leases Leases
The Company leases clinics, office buildings, and certain equipment under noncancellable financing and operating lease agreements that expire at various dates through November 2031. See Note 2 for a summary of the Company’s policies relating to leases, and the Company's adoption of Accounting Standards Update 2016-02, Leases (ASC 842), as of January 1, 2022.
The initial terms of operating leases range from 0 to 10 years and certain leases provide for free rent periods, periodic rent increases, and renewal options. Monthly payments for these leases range from $0 to $37. All lease agreements generally require the Company to pay maintenance, repairs, property taxes, and insurance costs, which are generally variable amounts based on actual costs incurred during each applicable period.
The Company has determined that periods covered by options to extend the Company's leases are excluded from the lease terms as it is not reasonably certain the Company will exercise such options. Operating lease expenses, including expenses related to short-term leases, were $6,364, $4,281, and $3,680, respectively, for the years ended December 31, 2022, 2021, and 2020.
Lease Expense
The components of lease expense were as follows for the year ended December 31, 2022:
(in thousands)Year Ended December 31, 2022
Operating lease costs:$6,002 
Finance lease costs:
Amortization of ROU asset$62 
Interest expense$8 
Other lease costs:
Short-term lease costs$362 
Variable lease costs$967 
Total lease costs$7,401 
Operating and other lease costs are presented as part of selling, general, and administrative expenses. The components of finance lease costs appear in depreciation and amortization and interest expense.
Maturity of Lease Liabilities
The aggregate future lease payments for the Company's leases in years subsequent to December 31, 2022 are as follows:
(in thousands)Operating LeasesFinance Leases
2023$6,637 $84 
20246,202 77 
20255,576 42 
20264,834 39 
20273,877 29 
Thereafter 4,600 — 
Total future lease payment$31,726 $271 
Less: amount representing interest (4,168)(30)
Present value of future lease payment (lease liability)$27,558 $241 
Reported as:
Lease liabilities, current$5,498 $72 
Lease liabilities, noncurrent22,060 169 
Total lease liabilities $27,558 $241 
Lease Term and Discount Rate
The following table provides the weighted average remaining lease terms and weighted average discount rates for the Company's leases as of December 31, 2022:
December 31, 2022
Weighted-average remaining lease term (in years)
Operating 5.32
Finance 3.75
Weighted-average discount rate
Operating4.94 %
Finance6.02 %
Supplemental Cash Flow Information
The following table provides certain cash flow and supplemental noncash information related to the Company's lease liabilities for the year ended December 31, 2022.
(in thousands)Year Ended December 31, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
  Operating cash payment from operating leases$5,342 
  Financing cash payments for finance leases73 
Lease liabilities arising from obtaining right-of-use assets:
  Operating leases$30,800 
  Finance leases203 
During the year ended December 31, 2022, ROU assets of $11,668 were obtained in exchange for lease obligations.
Lease Modifications
During the year ended December 31, 2022, the Company expanded its lease space and extended its lease term for two clinics and two corporate offices in California. These expansions and extensions constitute lease modifications that qualify as a change of accounting for the original leases and not separate contracts. Accordingly, in the year ended December 31, 2022, the
Company recognized the difference of $2,186 as an increase to the operating lease liability; $2,052, net of lease incentives, as an increase to operating lease right-of-use asset, and $39 as a net increase to rent expense.
Operating Lease Contractual Commitments
As of December 31, 2021, future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments were:
(in thousands)Capital leases Operating leases
Year ending December 31:
2022$37 $4,263 
202337 3,946 
202429 3,291 
2025— 2,718 
2026— 1,954 
Thereafter— 1,044 
Total minimum lease payments$103 $17,216 
Less: amount representing interest (6% interest rate)
(7)
Present value of net minimum capital lease payments$96 
Less current installments of obligations under capital leases(33)
Obligations under capital leases, excluding current installments$63