Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

LeasesThe 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.

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 $60. 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.

Lease Expense

The components of lease expense were as follows for the three months ended March 31, 2023 and 2022:

(in thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Operating lease costs:	$	1,762	$	1,168
Finance lease costs:
Amortization of ROU asset	$	20	$	14
Interest expense	$	3	$	1
Other lease costs:
Short-term lease costs	$	31	$	109
Variable lease costs	$	274	$	205

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 March 31, 2023 are as follows:

(in thousands)	Operating Leases		Finance Leases
2023 (remaining nine months)	$	5,206	$	63
2024	6,562		77
2025	5,947		42
2026	5,217		39
2027	4,126		—
Thereafter	5,181		29
Total future lease payment	$	32,239	$	250
Less: amount representing interest	(4,349)		(26)
Present value of future lease payment (lease liabilities)	$	27,890	$	224
Reported as:
Lease liabilities, current	$	5,639	$	73
Lease liabilities, noncurrent	22,251		151
Total lease liabilities	$	27,890	$	224

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 March 31, 2023 and 2022:

	March 31, 2023		March 31, 2022
Weighted-average remaining lease term (in years)
Operating	5.19		4.81
Finance	3.56		2.58
Weighted-average discount rate
Operating	5.23	%	4.21	%
Finance	6.05	%	4.39	%

Supplemental Cash Flow Information

The following table provides certain cash flow and supplemental noncash information related to the Company's lease liabilities for the three months ended March 31, 2023 and 2022.

(in thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash payment from operating leases	$	1,581	$	1,145
Financing cash payments for finance leases	21		17
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	1,550	$	19,598
Finance leases	3		40

Lease Modifications

During the three months ended March 31, 2023, the Company expanded its lease space for one clinic in California. This expansion constitutes a lease modification that qualifies as a change of accounting for the original lease and not a separate contract. Accordingly, in the three months ended March 31, 2023, the Company recognized the difference of $491 as an increase to the operating lease liability; $500 net of lease incentives, as an increase to operating lease right-of-use asset, and $3 as an increase to rent expense.

Leases

LeasesThe 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.

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 $60. 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.

Lease Expense

The components of lease expense were as follows for the three months ended March 31, 2023 and 2022:

(in thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Operating lease costs:	$	1,762	$	1,168
Finance lease costs:
Amortization of ROU asset	$	20	$	14
Interest expense	$	3	$	1
Other lease costs:
Short-term lease costs	$	31	$	109
Variable lease costs	$	274	$	205

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 March 31, 2023 are as follows:

(in thousands)	Operating Leases		Finance Leases
2023 (remaining nine months)	$	5,206	$	63
2024	6,562		77
2025	5,947		42
2026	5,217		39
2027	4,126		—
Thereafter	5,181		29
Total future lease payment	$	32,239	$	250
Less: amount representing interest	(4,349)		(26)
Present value of future lease payment (lease liabilities)	$	27,890	$	224
Reported as:
Lease liabilities, current	$	5,639	$	73
Lease liabilities, noncurrent	22,251		151
Total lease liabilities	$	27,890	$	224

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 March 31, 2023 and 2022:

	March 31, 2023		March 31, 2022
Weighted-average remaining lease term (in years)
Operating	5.19		4.81
Finance	3.56		2.58
Weighted-average discount rate
Operating	5.23	%	4.21	%
Finance	6.05	%	4.39	%

Supplemental Cash Flow Information

The following table provides certain cash flow and supplemental noncash information related to the Company's lease liabilities for the three months ended March 31, 2023 and 2022.

(in thousands)	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash payment from operating leases	$	1,581	$	1,145
Financing cash payments for finance leases	21		17
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	1,550	$	19,598
Finance leases	3		40

Lease Modifications

During the three months ended March 31, 2023, the Company expanded its lease space for one clinic in California. This expansion constitutes a lease modification that qualifies as a change of accounting for the original lease and not a separate contract. Accordingly, in the three months ended March 31, 2023, the Company recognized the difference of $491 as an increase to the operating lease liability; $500 net of lease incentives, as an increase to operating lease right-of-use asset, and $3 as an increase to rent expense.