Lease Commitments

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Lease Commitments

Note 9 — Lease Commitments

The Company recognizes ROU Assets and Lease Liabilities for automobiles, office buildings, IT equipment, and small storage units for the temporary storage of operational equipment. The Company’s leases have remaining lease terms ranging from less than 1 year to 7 years, and have extension options ranging from 1 year to 5 years. Most leases include the option to terminate the lease within 1 year.

Upon adopting ASC 842, the Company made accounting policy elections using practical expedients offered under the guidance to combine lease and non-lease components within leasing arrangements and to recognize the payments associated with short-term leases in earnings on a straight-line basis over the lease term, with the cost associated with variable lease payments recognized when incurred. These accounting policy elections impact the value of the Company’s ROU Assets and Lease Liabilities. The value of the Company’s ROU Assets is determined as the non-depreciated fair value of its leasing arrangements and is recorded to Property and Equipment, net on the Company’s Consolidated Balance Sheets. The value of the Company’s Lease Liabilities is the present value of fixed lease payments not yet paid, discounted using either the rate implicit in the lease contract if that rate can be determined, or the Company’s incremental borrowing rate (“IBR”). As of December 31, 2022 and 2021, the Company’s short-term portion of lease obligations were $5.3 million and $6.5 million, respectively, and are recorded in Other accrued expenses with the remaining balance recognized under the Lease liability — long-term portion caption on the Company’s Consolidated Balance Sheets. Any future lease payments that are not fixed based on the terms of the lease contract, or fluctuate based on a factor other than an index or rate, are considered variable lease payments and are not included in the value of the Company’s ROU Assets or Lease Liabilities. The Company’s IBR is determined as the rate of interest that the Company would incur to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Components of lease expense are presented below for the years ended December 31, 2022, 2021 and 2020.

	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Lease cost
Operating lease cost	$	5,673	$	6,210	$	5,381
Short-term lease cost	1,265		747		738
Variable lease cost	857		973		464
Total lease cost	$	7,795	$	7,930	$	6,583

Supplemental information is presented below for the years ended December 31, 2022, 2021 and 2020.

	Year Ended December 31,
	2022			2021			2020
	(dollar amounts in thousands)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,385		$	6,609		$	5,690
ROU Assets obtained in exchange for lease obligations	$	1,650		7,143			5,410
Weighted-average remaining lease term — operating leases	4.2 years			4.5 years			5.4 years
Weighted-average discount rate — operating leases	4.4		%	4.2		%	4.5		%

During the years ended December 31, 2022 and 2021, the Company’s ROU Assets and Lease Liabilities were reduced by $1.7 million and $0.8 million, respectively due to lease cancellations.

The following is a schedule by calendar year of future minimum lease payments under operating leases that have remaining terms as of December 31, 2022:

Period/Year	Operating Leases
	(in thousands)
2023	$	5,267
2024	3,502
2025	1,714
2026	1,337
2027	1,363
Thereafter	1,505
Total minimum lease payments	$	14,688
Less: imputed lease payments	1,317
Present value of lease liabilities	$	13,371