Leases

9 Months Ended

Dec. 31, 2023

The Company has operating leases for the use of real estate, machinery, and office equipment. The majority of our leases have a lease term of 2 to 5 years; however, we have certain leases with longer terms of up to 30 years. Many of our leases include options to extend the lease for an additional period.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor that is considered likely to be exercised.

Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. Variable payments are typically operating costs associated with the underlying asset and are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Our leases do not contain residual value guarantees.

The Company has elected to combine lease and non-lease components as a single component and not to recognize leases on the balance sheet with an initial term of one year or less.

The interest rate implicit in lease contracts is typically not readily determinable, and as such the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The components of lease cost for the three and nine months ended December 31, 2023 and 2022 are as follows (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Operating lease cost	$	473	$	537	$	1,897	$	1,529
Short-term lease cost	245		193		628		564
Variable lease cost	247		140		610		415
Total lease cost	$	965	$	870	$	3,135	$	2,508

Amounts reported in the consolidated balance sheets for leases where we are the lessee as of December 31, 2023 and March 31, 2023 were as follows (in thousands):


	December 31, 2023			March 31, 2023
Operating leases
Operating lease ROU assets	$	11,893		$	11,666
Operating lease liabilities	$	12,773		$	12,435

Weighted-average remaining lease term
Operating leases	12 years			12 years, 10 months

Weighted-average discount rate
Operating leases	5.08		%	4.95		%

Maturities of lease liabilities under non-cancellable leases where we are the lessee as of December 31, 2023 are as follows (in thousands):


	Operating Leases
2024 (excluding the nine months ended December 31, 2023)	$	640
2025	2,344
2026	2,127
2027	1,979
2028	1,438
2029	750
Thereafter	8,225
Total undiscounted lease payments	17,503
Interest	(3,840)
Discount	(890)
Total lease liabilities	$	12,773