Lease Commitments

3 Months Ended

Mar. 31, 2023

Lease Commitments

Lease Commitments

(8) Lease Commitments

The Company’s operating lease portfolio is comprised of operating leases for office, warehouse space and equipment. Certain of the Company’s leases include one or more options to renew or terminate the lease at the Company’s discretion. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in our lease term. Since inception of our newest leased building, we have subleased a portion of the unused floorspace on a temporary basis. This sublease may convert to a month-to-month lease upon expiration.

As of March 31, 2023, the ROU asset had a balance of $8,714, which is included in the “Operating lease right-of-use assets” line item of these consolidated financial statements and current and non-current lease liabilities related to the ROU asset of $0 and $9,751, respectively. The $0 in current lease liability stems from expected payments from the lessor of the Bolingbrook facility reimbursing the Company for tenant improvement allowances in the amount of $1,716 over the next twelve months. Because the expected cash payments over the next twelve months resulted in an amount exceeding a current liability, the current operating lease liability line item on the balance sheet reported $0, with the balance exceeding the current liability netted against the noncurrent portion for a total operating lease liability at March 31, 2023 of $9,751. As a result, the total lease liability was reduced by the expected payment, the net effect of reimbursements received, and cash paid for leases over the next twelve months resulting in net lease payments of $347. As of December 31, 2022, the ROU asset had a balance of $8,978 which is included in the “Operating lease right-of-use assets” line item of these consolidated financial statements and current and non-current lease liabilities related to the ROU asset of $0 and $9,823, respectively. The $0 in current lease liability stems from expected payments from the lessor of the Bolingbrook facility reimbursing the Company for tenant improvement allowances in the amount of $1,957 over the next twelve months. As a result, the total lease liability was reduced by the expected payment, the net effect of reimbursements received, and cash paid for leases over the next twelve months, resulting in net lease payments of $97.

Discount rates used for leases accounted for under ASC 842 are based on an interest rate yield curve developed for the leases in the Company’s portfolio.

The office leases contain variable lease payments which consist primarily of taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to combine lease and non-lease components for building leases. 

Quantitative information regarding the Company’s leases is as follows:

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Components of lease cost
Finance lease cost components:
Amortization of finance lease assets	$	—		$	11
Interest on finance lease liabilities		—			2
Total finance lease costs		—			13
Operating lease cost components:
Operating lease cost		469			363
Variable lease cost		146			172
Short-term lease cost		48			21
Sublease income		(196	)		(183	)
Total operating lease costs		467			373
Total lease cost	$	467		$	386

Supplemental cash flow information related to leases is as follows for the three months ended March 31, 2023 and 2022:

	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	263		$	190
Weighted-average remaining lease term-finance leases (in years)		—			0.6
Weighted-average remaining lease term-operating leases (in years)		8.0			9.3
Weighted-average discount rate-finance leases		—			7.6	%
Weighted-average discount rate-operating leases		7.05	%		7.5	%

The future maturities of the Company’s finance and operating leases as of March 31, 2023 are as follows:

2023	$	(172	)
2024		2,029
2025		1,473
2026		1,471
2027		1,510
Thereafter		7,162
Total payments	$	13,473
Less amounts representing interest		(3,722	)
Total minimum payments required	$	9,751