LEASES

12 Months Ended

Jun. 30, 2022

LEASES:

Capital Leases

The Company has several lease agreements for equipment that are classified as capital leases. The cost and accumulated depreciation of equipment under capital leases included in the accompanying Consolidated Statements of Financial Position within property and equipment, net were $1,249 and $460, respectively, as of June 30, 2022. Depreciation expense associated with capital leases for the fiscal year ended June 30, 2022 was $284.

The future minimum lease payments under capital leases and the present value of net minimum lease payments as of June 30, 2022 are as follows:


2023	$	323
2024	323
2025	296
2026	44
2027	—
Total minimum lease payments	986
Less: Amount representing interest	(74)
Present value of minimum lease payments	912
Less: Current maturities of capital lease obligations	(283)
Long-term capital lease obligations	$	629

Current maturities of capital lease obligations and long-term capital lease obligations are recorded within accrued expenses and other current liabilities and other long-term liabilities, respectively, within the consolidated balance sheets.

Operating Leases

The Company leases office space (except for its headquarters) and equipment under operating leases expiring on various dates through June 2030, with voluntary renewal options that can extend the term at the Company’s discretion. The following is a schedule of future annual minimum lease payments required under operating leases as of June 30, 2022:


2023	$	6,678
2024	5,132
2025	4,257
2026	4,031
2027	3,721
Thereafter	2,890
Total minimum lease payments	26,709
Less sublease income of leased properties (1)	(7,212)
Net minimum lease payments	$	19,497

(1) Represents receipts for noncancellable subleases at June 30, 2022.

Rent expense for operating leases is accounted for on a straight-line basis. To the extent the rent expense exceeds actual rent payments, the Company records a deferred rent liability. Once the rent payments exceed the straight-line rent expense, the liability is reduced. At June 30, 2022 and 2021, the deferred rent liability was approximately $520 and $5,330, respectively, which is included in accrued expenses and other current liabilities and other long-term liabilities within the consolidated balance sheets. Rent expense for the fiscal years ending June 30, 2022, 2021, and 2020 was approximately $5,452, $5,411, $5,285, respectively.

Exit or Disposal Activities

In the third quarter of fiscal year 2022, as a result and in consideration of the changing use of office space by the workforce amid the impacts of the COVID-19 pandemic, the Company evaluated its existing real estate lease portfolio. This evaluation included the establishment of a formal plan to exit certain leased office spaces that are no longer utilized, which was finalized in the third quarter of fiscal year 2022. The Company recognized a loss on exit of certain leases of $9,055, which is included in general and administrative expenses in the accompanying statement of operations for the fiscal year ended June 30, 2022.

The loss included the present value of the remaining lease obligation on the cease-use date, net of estimated sublease income, as well as the write-off of $4,910 of the carrying value of ceased-use furniture, fixtures, equipment and leasehold improvements offset by $3,250 of deferred rent.

A summary of the exit cost obligation and related activity for the fiscal year ended June 30, 2022 is as follows:



Exit cost obligation at cease-use date in fiscal year 2022	$	7,395
Accretion during fiscal year 2022	57
Net payments made during fiscal year 2022	(1,065)
Exit cost obligation at June 30, 2022	$	6,387

The total exit cost obligation at June 30, 2022 is $6,387, which is included within accrued expenses and other current liabilities and other long-term liabilities on the consolidated balance sheets, respectively, as follows:



Accrued expenses and other current liabilities	$	3,037
Other long-term liabilities	3,350
Total exit cost obligation	$	6,387