Leases

12 Months Ended

Dec. 31, 2023

Note 8 — Leases

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 5 years, and have extension options ranging from 1 year to 5 years. Most leases include the option to terminate the lease within 1 year.

The Company uses practical expedients offered under the ASC 842 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 carrying value of its leasing arrangements and is recorded in 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, which is discounted using either the rate implicit in the lease contract if that rate can be determined or the Company’s incremental borrowing rate (“IBR”) and is recorded in Other accrued expenses and current liabilities and Lease liability — long-term on the Company’s Consolidated Balance Sheets. The Company’s IBR is determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. 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.

As of December 31, 2023 and 2022, the Company’s short-term portion of lease obligations were $7.4 million and $5.3 million, respectively, and are recorded in Other accrued expenses and current liabilities with the remaining balance recognized under the Lease liability — long-term portion caption on the Company’s Consolidated Balance Sheets. The corresponding expense for the Company’s lease commitments are primarily recorded in selling, general and administrative expense on the Company’s Consolidated Statements of Comprehensive Income.

Components of lease expense are presented below for the years ended December 31, 2023, 2022 and 2021.


	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Lease cost
Operating lease cost	$	6,400	$	5,673	$	6,210
Short-term lease cost	1,037		1,265		747
Variable lease cost	1,952		857		973
Total lease cost	$	9,389	$	7,795	$	7,930

Supplemental information is presented below for the years ended December 31, 2023, 2022 and 2021.


	Year Ended December 31,
	2023			2022			2021
	(dollar amounts in thousands)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,808		$	6,385		$	6,609
ROU Assets obtained in exchange for lease obligations	$	6,064		1,650			7,143
Weighted-average remaining lease term — operating leases	3.3 years			4.2 years			4.5 years
Weighted-average discount rate — operating leases	6.6		%	4.4		%	4.2		%

During the years ended December 31, 2023 and 2022, the Company’s ROU assets and lease liabilities were reduced by $2.7 million and $1.7 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, 2023:


Period/Year	Operating Leases
	(in thousands)
2024	$	7,365
2025	6,617
2026	3,768
2027	1,365
2028	1,389
Thereafter	116
Total minimum lease payments	$	20,620
Less: imputed lease payments	1,999
Present value of lease liabilities	$	18,621