Annual report pursuant to Section 13 and 15(d)

Leases

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Leases
12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
LEASES
10. LEASES.

 

The Company leases equipment and land for certain of its facilities. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the years ended December 31, 2023 and 2022, the Company’s weighted-average discount rate was 7.50%. Operating lease expense is recognized on a straight-line basis over the lease term.

 

Upon the adoption of ASC 842, the Company elected the following practical expedients allowable under the guidance: not to reassess whether any expired or existing contracts are or contain leases; not to reassess the lease classification for any expired or existing leases; not to reassess initial direct costs for any existing leases; not to separately identify lease and non-lease components; and not to evaluate historical land easements. Additionally, the Company elected the short-term lease exemption policy, applying the requirements of ASC 842 to only long-term (greater than 1 year) leases.

 

The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 1 year to 52 years, which includes options to extend the lease when it is reasonably certain the Company will exercise those options. For the year ended December 31, 2023, the weighted-average remaining lease terms of equipment and land-related leases were 4.73 years and 15.41 years, respectively. The Company does not have lease arrangements with residual value guarantees, sale-leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements.

 

Leases consist of the following (in thousands):

 

        December 31,  
    Classification   2023     2022  
Assets:                
Operating   Right of use operating lease assets, net   $ 22,597     $ 18,937  
                     
Liabilites:                    
Operating - Current   Current portion, operating leases   $ 4,333     $ 3,849  
                     
Operating - Noncurrent   Operating leases, net of current portion   $ 19,029     $ 15,062  

 

The Components of lease costs were as follows (in thousands):

 

    Years Ended December 31,  
    2023     2022     2021  
                   
                   
Fixed lease cost   $ 5,722     $ 5,224     $ 4,500  
Variable lease cost     871       124       238  
Net lease cost   $ 6,593     $ 5,348     $ 4,738  

 

The following table summarizes the remaining maturities of the Company’s operating lease liabilities, assuming all land lease extensions are taken, as of December 31, 2023 (in thousands):

 

 

Year Ended:

    Equipment     Land
Related
 
2024     $ 4,959     $ 991  
2025       4,506       1,178  
2026       3,860       1,156  
2027       3,350       1,129  
2028       2,655       1,142  
2029-76       1,278       4,666  
Less interest       (3,720 )     (3,788 )
      $ 16,888     $ 6,474