Leases

12 Months Ended

Feb. 28, 2022

Note 3 - Leases

We determine if an arrangement is or contains a lease at contract inception and determine its classification as an operating or finance lease at lease commencement. We primarily have leases for office space, which are classified as operating leases. Operating leases are included in operating lease assets, accrued expenses and other current liabilities, and lease liabilities, non-current in our consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our lease contracts do not provide an explicit interest rate, we use an estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We include options to extend or terminate the lease in the lease term for accounting considerations, when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of less than 1 year to 11 years. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We do not recognize leases with an initial term of twelve months or less on the balance sheet and instead recognize the related lease payments as expense in the consolidated statements of income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component for all asset classes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease expense recognized within SG&A in the consolidated statements of income was $9.6 million, $7.0 million, and $6.4 million for fiscal 2022, 2021, and 2020, respectively. Short-term lease expense is excluded from this amount and is not material. Rent expense related to all our operating leases was $13.3 million, $9.5 million, and $7.8 million for fiscal 2022, 2021 and 2020, respectively. The non-cash component of lease expense is included as an adjustment to reconcile net income to net cash provided by operating activities in the consolidated statements of cash flows.

A summary of supplemental lease information is as follows:


	February 28, 2022		February 28, 2021
Weighted average remaining lease term (years)	9.5		9.6
Weighted average discount rate	5.52%		6.03%
Cash paid for amounts included in the measurement of lease liabilities	$	9,715	$	6,951
Operating lease assets obtained in exchange for operating lease liabilities	$	12,213	$	4,163

A summary of our estimated lease payments, imputed interest and liabilities are as follows:


(in thousands)	February 28, 2022
Fiscal 2023	$	8,320
Fiscal 2024	6,621
Fiscal 2025	6,665
Fiscal 2026	5,361
Fiscal 2027	5,966
Thereafter	32,178
Total future lease payments	65,111
Less: imputed interest	(15,611)
Present value of lease liability	$	49,500


(in thousands)	February 28, 2022		February 28, 2021
Lease liabilities, current (1)	$	5,755	$	5,972
Lease liabilities, non-current	43,745		38,352
Total lease liability	$	49,500	$	44,324

(1)Included as part of “Accrued expenses and other current liabilities” on the consolidated balance sheet.