Leases

12 Months Ended

Feb. 28, 2022

The Company is a lessee under various leases for facilities and equipment. See Note 1 for a description of the Company's accounting policy for leases.

As of February 28, 2022, the Company was the lessee for 156 operating leases with terms of 12 months or more and 10 finance leases. Many of the operating leases either have renewal options of between one and five years or convert to month-to-month agreements at the end of the specified lease term.

The Company’s operating leases are primarily for (i) operating facilities, (ii) vehicles and equipment used in operations, (iii) facilities used for back-office functions and (iv) equipment used for back-office functions. The majority of the Company’s long-term lease expenses are at fixed prices.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases, including month-to-month agreements, some of which continue in perpetuity until the lessor or the Company terminates the lease agreement. The Company's short-term lease agreements include expenses incurred hourly, daily, monthly and for other durations of time of one year or less.

The Company’s future lease commitments as of February 28, 2022 do not reflect all of the Company’s short-term lease commitments.

The following table outlines the classification of the Company's right-of-use asset and lease liabilities in the balance sheets for fiscal 2022 and 2021 (in thousands):


Balance Sheet	Classification	February 28, 2022		February 28, 2021
Assets
Right-of-use assets	Right-of-use assets	$	43,286	$	37,801
Liabilities
Operating lease liabilities ― ST	Lease liability - short-term	7,140		6,552
Operating lease liabilities ― LT	Lease liability - long-term	34,965		32,405
Finance lease liabilities ― ST	Lease liability - short-term	178		66
Finance lease liabilities ― LT	Lease liability - long-term	645		226

The following table outlines the classification of lease expense in the statements of income for fiscal 2022, 2021, and 2020 (in thousands):


	2022		2021		2020
Cost of sales	$	11,070	$	10,533	$	13,521
Selling, general and administrative	3,959		4,485		4,923
Total lease cost	$	15,029	$	15,018	$	18,444

As of February 28, 2022, maturities of the Company's lease liabilities were as follows (in thousands):


Fiscal year:	Operating Leases		Finance Leases		Total
2023	$	8,880	$	199	$	9,079
2024	7,930		199		8,129
2025	6,838		196		7,034
2026	5,302		132		5,434
2027	5,009		105		5,114
Thereafter	16,331		46		16,377
Total lease payments	50,290		877		51,167
Less imputed interest	(8,183)		(56)		(8,239)
Total	42,107		821		42,928

Supplemental information related to the Company's portfolio of leases was as follows (in thousands, except years and percentages):


	2022			2021
Operating cash flows from operating leases included in lease liabilities	$	9,044		$	8,143
Lease liabilities obtained from new ROU assets - operating	$	13,389		$	2,186
Weighted-average remaining lease term - operating leases	7.90 years			6.92 years
Weighted-average discount rate - operating leases	4.56		%	4.71		%
Operating and financing cash flows from financing leases included in lease liabilities	$	100		$	25
Lease liabilities obtained from new ROU assets - financing	$	519		$	230
Weighted-average remaining lease term - financing leases	4.73 years			4.25 years
Weighted-average discount rate - financing leases	2.95		%	4.00		%