LEASES AND RELATED PARTY LEASES

3 Months Ended

Mar. 31, 2024

The Company leases administrative, manufacturing, research and distribution facilities, and vehicles through operating lease agreements. The Company has no finance leases as of March 31, 2024. Many of the Company’s leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs). For vehicles, the Company has elected the practical expedient to group lease and non-lease components.

Most facility leases include one or more options to renew. The exercise of lease renewal options is typically at the Company’s sole discretion, therefore, the majority of renewals to extend the lease terms are not included in the Right of Use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates renewal options and when they are reasonably certain of exercise, the renewal period is included in the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Total operating lease expense for the three months ended March 31, 2024 and March 31, 2023 was $6.3 million and $6.0 million, respectively, which includes $0.3 million, in related party operating lease expense.

Supplemental balance sheet information related to operating leases were as follows:


Dollars in thousands, except lease term and discount rate	March 31, 2024			December 31, 2023
ROU assets	$	151,834		$	156,184

Current lease liabilities	16,303			15,284
Non-current lease liabilities	170,082			166,849
Total lease liabilities	$	186,385		$	182,133

Weighted average remaining lease term (in years):
Leased facilities	16.5 years			16.3 years
Leased vehicles	2.1 years			1.9 years

Weighted average discount rate:
Leased facilities	5.7		%	5.9		%
Leased vehicles	2.7		%	2.7		%

Supplemental cash flow information related to leases for the three months ended March 31, 2024 and 2023 were as follows:


Dollars in thousands	March 31, 2024		March 31, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,734	$	4,319

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	746	$	1,721

Future minimum lease payments under operating leases at March 31, 2024 were as follows:


Dollars in thousands	Related Parties		Third Parties		Total
Remainder of 2024	$	222	$	17,884	$	18,106
2025	296		22,859		23,155
2026	296		20,210		20,506
2027	296		18,892		19,188
2028	296		16,603		16,899
2029	246		15,771		16,017
Thereafter	—		163,479		163,479
Total minimum lease payments	$	1,652	$	275,698	$	277,350
Less: Imputed interest					90,965
Total lease liabilities					186,385
Less: Current lease liabilities					16,303
Long-term lease liabilities					170,082

There were no future minimum lease payments under finance leases at March 31, 2024.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50% owned by a principal stockholder of the Company. The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $0.3 million. The current lease agreement also provides (i) a 5-year renewal option for the Company to extend the lease from November 1, 2029 through October 31, 2034 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2034 through October 31, 2039 at the fair market rental rate of the premises.