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Leases

12 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

LEASES

The majority of the Company’s leases are operating leases related to office space. The Company leases office facilities in the United States in San Diego, California; Centennial, Colorado; Jacksonville, Florida; Overland Park, Kansas; Wilmington, North Carolina; Des Moines, Iowa; and Oakland, California. The Company has also entered into an operating lease with a related party for the SelectRx facilities in Monaca, Pennsylvania which is included in the disclosures that follow. Over the term of the lease the Company expects to incur $3.6 million in total rental payments over the initial ten-year term plus an additional five-year extension option which it is reasonably certain to exercise. The Company recognizes lease expense for operating leases on a straight-line basis over the respective lease term. The Company's operating leases have remaining lease terms of less than one year to fifteen years.

The Company has entered into noncancelable agreements to sublease portions of its office facilities to unrelated third parties. Sublease rental income is recorded as a reduction of rent expense in general and administrative operating costs and expenses in the consolidated statements of comprehensive income. Sublease rental income was $1.0 million, $0.3 million, and $0.4 million for the years ended June 30, 2021, 2020, and 2019, respectively.

Operating lease expense was $7.8 million for the year ended June 30, 2021, recorded in general and administrative operating costs and expenses in the consolidated statements of comprehensive income.

Right-of-Use Asset and Lease Liability—The right-of-use assets and lease liabilities were as follows as of June 30, 2021:

(in thousands)			Balance Sheet Classification						Amount
Assets
Operating leases			Operating lease right-of-use assets						$	31,414
Finance leases			Property and equipment - net						181
Total lease right-of-use assets									31,595
Liabilities
Current
Operating leases			Operating lease liabilities - current						5,289
Finance leases			Other current liabilities						188
Non-current
Operating leases			Operating lease liabilities						38,392
Finance leases			Other liabilities						27
Total lease liabilities									$	43,896

Lease Costs—The components of lease costs were as follows:

			Year Ended June 30,
(in thousands)			2021
Finance lease costs(1)			$	245
Operating lease costs(2)			7,843
Short-term lease costs			172
Variable lease costs(3)			1,195
Sublease income			(975)
Total net lease costs			$	8,480

(1) Primarily consists of amortization of finance lease right-of-use assets and an immaterial amount of interest on finance lease liabilities recorded in operating costs and expenses and interest expense, net in the consolidated statements of comprehensive income.

(2) Recorded in operating costs and expenses in the consolidated statements of comprehensive income.

(3) Variable lease costs are not included in the measurement of the lease liability or right-of-use asset as they are not based on an index or rate and primarily represents common area maintenance charges and real estate taxes recorded in operating costs and expenses in the consolidated statements of comprehensive income.

Supplemental Information—Supplemental information related to leases was as follows as of and for the year ended June 30, 2021:

(in thousands)			Operating Leases						Finance leases						Total
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from leases			$	7,228					$	11					$	7,239
Financing cash flows from leases			—						262						262
Right-of-use assets obtained in exchange for new lease liabilities			$	5,618					$	194					$	5,812

			Operating Leases						Finance leases
Weighted-average remaining lease term (in years)			7.20						1.14
Weighted-average discount rate			9.58		%				6.44		%

Maturities of Lease Liabilities—As of June 30, 2021, remaining maturities of lease liabilities for each of the next five fiscal years and thereafter are as follows:

(in thousands)						Operating leases						Finance leases						Total
2022						9,171						196						9,367
2023						8,704						26						8,730
2024						9,086						—						9,086
2025						9,100						—						9,100
2026						6,825						—						6,825
Thereafter						17,537						—						17,537
Total undiscounted lease payments						60,423						222						60,645
Less: interest						16,742						7						16,749
Present value of lease liabilities						$	43,681					$	215					$	43,896

The following table summarizes the future annual minimum lease obligations under non-cancelable operating leases at June 30, 2020, under the previous lease accounting standard ASC 840, Leases (in thousands):

2021			$	8,781
2022			8,497
2023			7,991
2024			8,353
2025			8,306
Thereafter			21,262
Total minimum lease payments			$	63,190

Leases

LEASES

The majority of the Company’s leases are operating leases related to office space. The Company leases office facilities in the United States in San Diego, California; Centennial, Colorado; Jacksonville, Florida; Overland Park, Kansas; Wilmington, North Carolina; Des Moines, Iowa; and Oakland, California. The Company has also entered into an operating lease with a related party for the SelectRx facilities in Monaca, Pennsylvania which is included in the disclosures that follow. Over the term of the lease the Company expects to incur $3.6 million in total rental payments over the initial ten-year term plus an additional five-year extension option which it is reasonably certain to exercise. The Company recognizes lease expense for operating leases on a straight-line basis over the respective lease term. The Company's operating leases have remaining lease terms of less than one year to fifteen years.

The Company has entered into noncancelable agreements to sublease portions of its office facilities to unrelated third parties. Sublease rental income is recorded as a reduction of rent expense in general and administrative operating costs and expenses in the consolidated statements of comprehensive income. Sublease rental income was $1.0 million, $0.3 million, and $0.4 million for the years ended June 30, 2021, 2020, and 2019, respectively.

Operating lease expense was $7.8 million for the year ended June 30, 2021, recorded in general and administrative operating costs and expenses in the consolidated statements of comprehensive income.

Right-of-Use Asset and Lease Liability—The right-of-use assets and lease liabilities were as follows as of June 30, 2021:

(in thousands)			Balance Sheet Classification						Amount
Assets
Operating leases			Operating lease right-of-use assets						$	31,414
Finance leases			Property and equipment - net						181
Total lease right-of-use assets									31,595
Liabilities
Current
Operating leases			Operating lease liabilities - current						5,289
Finance leases			Other current liabilities						188
Non-current
Operating leases			Operating lease liabilities						38,392
Finance leases			Other liabilities						27
Total lease liabilities									$	43,896

Lease Costs—The components of lease costs were as follows:

			Year Ended June 30,
(in thousands)			2021
Finance lease costs(1)			$	245
Operating lease costs(2)			7,843
Short-term lease costs			172
Variable lease costs(3)			1,195
Sublease income			(975)
Total net lease costs			$	8,480

(1) Primarily consists of amortization of finance lease right-of-use assets and an immaterial amount of interest on finance lease liabilities recorded in operating costs and expenses and interest expense, net in the consolidated statements of comprehensive income.

(2) Recorded in operating costs and expenses in the consolidated statements of comprehensive income.

(3) Variable lease costs are not included in the measurement of the lease liability or right-of-use asset as they are not based on an index or rate and primarily represents common area maintenance charges and real estate taxes recorded in operating costs and expenses in the consolidated statements of comprehensive income.

Supplemental Information—Supplemental information related to leases was as follows as of and for the year ended June 30, 2021:

(in thousands)			Operating Leases						Finance leases						Total
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from leases			$	7,228					$	11					$	7,239
Financing cash flows from leases			—						262						262
Right-of-use assets obtained in exchange for new lease liabilities			$	5,618					$	194					$	5,812

			Operating Leases						Finance leases
Weighted-average remaining lease term (in years)			7.20						1.14
Weighted-average discount rate			9.58		%				6.44		%

Maturities of Lease Liabilities—As of June 30, 2021, remaining maturities of lease liabilities for each of the next five fiscal years and thereafter are as follows:

(in thousands)						Operating leases						Finance leases						Total
2022						9,171						196						9,367
2023						8,704						26						8,730
2024						9,086						—						9,086
2025						9,100						—						9,100
2026						6,825						—						6,825
Thereafter						17,537						—						17,537
Total undiscounted lease payments						60,423						222						60,645
Less: interest						16,742						7						16,749
Present value of lease liabilities						$	43,681					$	215					$	43,896

The following table summarizes the future annual minimum lease obligations under non-cancelable operating leases at June 30, 2020, under the previous lease accounting standard ASC 840, Leases (in thousands):

2021			$	8,781
2022			8,497
2023			7,991
2024			8,353
2025			8,306
Thereafter			21,262
Total minimum lease payments			$	63,190

X

- References

No definition available.

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- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=77888251

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- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=77888251

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