The Company accounts for its leases in accordance with ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). ASC 842 requires lessees to (i) recognize a right of use asset (“ROU asset”) and a lease liability that is measured at the present value of the remaining lease payments, on the consolidated balance sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease related cash payments within operating and financing activities. The Company has made an accounting policy election to not recognize short-term leases on the consolidated balance sheets and all non-lease components, such as common area maintenance, were excluded. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments, and the ROU asset is measured as the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs and the remaining balance of lease incentives received. Both the lease ROU asset and liability are reduced to zero at the end of the lease term.

The Company leases distribution centers and warehouses, manufacturing facilities, showrooms, and office space. At the lease inception date, the Company determines if an arrangement is, or contains, a lease. Some of the Company’s leases include options to renew at similar terms. The Company assesses these options to determine if the Company is reasonably certain of exercising these options based on relevant economic and financial factors. Options that meet these criteria are included in the lease term at the lease commencement date.

For purposes of measuring the Company’s ROU asset and lease liability, the discount rate utilized by the Company was based on the average interest rates effective for the Company’s line of credit. Some of the Company’s leases contain variable rent payments, including common area maintenance and utilities. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

Other information related to leases and future minimum lease payments under non-cancellable operating leases were as follows:


Fiscal year	June 30, 2024			June 30, 2023
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,502		$	9,119

Cash received from subleasing of operating lease:
Operating cash flows received from subleasing of operating lease	$	2,744		$	175

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	797		$	38,775

Weighted-average remaining lease term (in years):
Operating leases		8.2			9.1

Weighted-average discount rate:
Operating leases		3.1	%		2.9	%

Fiscal year				June 30, 2024
(in thousands)
Payments in FY2025				$	9,418
FY2026					9,208
FY2027					9,378
FY2028					9,144
FY2029					8,064
Thereafter					28,976
Total future minimum lease payments				$	74,188
Less imputed interest					8,595
Lease liability				$	65,593