LEASES

12 Months Ended

Dec. 31, 2023

4. LEASES

The Company leases certain real estate and warehouse equipment under long-term lease agreements.

The Company performs interim reviews of its operating and finance lease assets for impairment when evidence exists that the carrying value of an asset group, including a lease asset, may not be recoverable. The Company recognized no impairment expense related to its operating lease assets during the year ended December 31, 2023 or December 31, 2022.

Additional information regarding the Company’s operating and finance leases is as follows (in thousands, except for lease term and discount rate information):

Leases	Balance Sheet Classification	December 31, 2023		December 31, 2022
(in thousands)
Assets:
Operating	Operating lease assets	$	8,995	$	9,742
Finance	Financing lease assets		23		31
Total assets		$	9,018	$	9,773

Liabilities:
Current
Operating	Current portion of operating lease liabilities	$	3,172	$	2,881
Finance	Current portion of finance lease liabilities		-		15
Non-current
Operating	Operating lease liabilities, non-current		6,253		7,469
Finance	Finance lease liabilities, non-current		1		1
Total lease liabilities		$	9,426	$	10,366

Lease Cost	Income Statement Classification	December 31, 2023		December 31, 2022
(in thousands)
Operating lease cost	Operating expenses	$	3,908	$	3,737
Operating lease cost	Impairment expense		-		-
Short-term lease cost	Operating expenses		-		38
Variable lease cost (1)	Operating expenses		915		797
Amortization of finance lease assets	Operating expenses		7		7
Interest on lease liabilities	Interest expense		-		1
Total lease cost		$	4,830	$	4,580

(1) Variable lease cost includes payment for certain real estate taxes, insurance, common area maintenance, and other charges related to lease agreements, which are not included in the measurement of the operating lease liabilities.

	December 31, 2023
Maturity of Lease Liabilities	Operating Leases			Finance Leases
(in thousands)
2024	$	3,687		$	-
2025		2,755			-
2026		2,103			-
2027		1,577			-
2028		731			-
Thereafter		275			-
Total lease payments	$	11,128		$	-
Less: Interest		(1,702	)		-
Present value of lease liabilities	$	9,426		$	-

Other Information	December 31, 2023		December 31, 2022
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	3,955	$	3,871
Operating cash flows used in finance leases		-		1
Financing cash flows used in finance leases		15		14

Lease Term and Discount Rate	December 31, 2023			December 31, 2022
Weighted-average remaining lease term (years):
Operating leases		3.6			4.8
Finance leases		0.0			0.9
Weighted-average discount rate:
Operating leases		4.8	%		5.0	%
Finance leases		6.0	%		6.0	%