Leases

12 Months Ended

Jun. 30, 2023

We lease certain machinery and plant equipment, office space, and production and warehouse facilities under non-cancelable operating leases that expire on various dates through 2037. Our finance leases primarily relate to machinery and plant equipment. Over the past three years, we continually assessed our leased real estate footprint as a facet of our evolving remote-first operating model for many of our employees, which resulted in a decrease to our leased real estate portfolio over this period of time.

The following table presents the classification of right-of-use assets and lease liabilities as of June 30, 2023 and 2022:


Leases	Consolidated Balance Sheet Classification	June 30, 2023		June 30, 2022

Assets:
Operating right-of-use assets	Operating lease assets, net	$	76,776	$	80,694
Finance right-of-use assets	Property, plant, and equipment, net	30,616		19,181
Total lease assets		$	107,392	$	99,875
Liabilities:
Current:
Operating lease liabilities	Operating lease liabilities, current	$	22,559	$	27,706
Finance lease liabilities	Other current liabilities	9,938		6,684
Non-current:
Operating lease liabilities	Operating lease liabilities, non-current	56,668		57,474
Finance lease liabilities	Other liabilities	29,822		14,699
Total lease liabilities		$	118,987	$	106,563

The following table represents the lease expenses for the years ended June 30, 2023 and 2022:


	Year Ended
	June 30, 2023		June 30, 2022
Operating lease expense	$	30,240	$	26,975
Finance lease expense:
Amortization of finance lease assets	4,565		5,892
Interest on lease liabilities	205		305
Variable lease expense	6,821		7,550
Less: sublease income	(833)		(86)
Net operating and finance lease cost	$	40,998	$	40,636

Future minimum lease payments under non-cancelable leases as of June 30, 2023 were as follows:


Payments Due by Period	Operating lease obligations		Finance lease obligations		Total lease obligations
Less than 1 year	$	24,159	$	10,904	$	35,063
2 years	19,464		6,080		25,544
3 years	13,466		6,072		19,538
4 years	8,998		4,364		13,362
5 years	5,991		2,482		8,473
Thereafter	16,990		13,310		30,300
Total	89,068		43,212		132,280
Less: present value discount	(9,841)		(3,452)		(13,293)
Lease liability	$	79,227	$	39,760	$	118,987

Other information about leases is as follows:


Lease Term and Discount Rate	June 30, 2023		June 30, 2022
Weighted-average remaining lease term (years):
Operating leases	5.74		4.32
Finance leases	8.69		3.89
Weighted-average discount rate:
Operating leases	5.20	%	3.71	%
Finance leases	6.23	%	2.79	%

Our leases have remaining lease terms of 1 year to 15 years, inclusive of renewal or termination options that we are reasonably certain to exercise.


	Year Ended
Supplemental Cash Flow Information	June 30, 2023		June 30, 2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	31,161	$	26,641
Operating cash flows from finance leases	205		305
Financing cash flows from finance leases (1)	8,290		37,512

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(1) The decrease in financing cash flows from finance leases is driven by the non-recurring purchase option exercise for a leased facility in fiscal year 2022, with the purchased facility being subsequently sold. Refer to additional details below.

Purchase and Sale of a Leased Facility

During fiscal year 2022, we paid $27,885 to exercise the purchase option available for one of our leased facilities, immediately sold the facility to a separate third party for $23,226, and recognized a $3,324 gain on the sale within general and administrative expense on our consolidated statement of operations. The purchase option exercise was presented as a financing activity on our consolidated statement of cash flows while the sale of the facility was presented as an investing activity. Prior to the purchase and sale, as required under our long-lived asset policy, we identified a triggering event in fiscal year 2021 for this leased facility and abandoned equipment, which resulted in impairment charges of $7,420 and $1,680, respectively, that were recognized in general and administrative expense on the consolidated statement of operations.

Waltham Lease Modification

During fiscal year 2021, we modified the lease agreement for our Waltham, Massachusetts office location, which resulted in us retaining a small portion of the previously leased office space in exchange for a reduction to our monthly rent payments for the space we no longer lease and the payment of an early termination fee of $8,761. Due to the partial termination of the lease, we recognized a gain of $1,156 in general and administrative expense on the consolidated statement of operations for the year ended June 30, 2021. As required under our long-lived asset policy, we identified a triggering event with regards to the modified right-of-use asset and abandoned property, plant and equipment related to the vacated space, which resulted in impairments of $7,489 and $4,483, respectively, which were recognized in general and administrative expense on the consolidated statement of operations for the year ended June 30, 2021.