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v3.23.1

Leases | 3 Months Ended
--- | ---
Mar. 31, 2023
Leases [Abstract] |
Leases | Leases The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of March 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $31.3 million, or 94% of the total lease liabilities on the consolidated balance sheet. During the three months ended March 31, 2023, the Company entered into new finance lease agreements resulting in an additional $0.3 million of right-of-use assets and lease liabilities. Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification |  | Financial Statement Line Item |  | March 31, 2023 |  | December 31, 2022
Assets |  | Right-of-use assets, operating leases |  | $ | 28,871 |  |  | $ | 29,224 |
Assets |  | Property, plant and equipment |  | 1,617 |  |  | 1,494 |
Current liabilities |  | Current portion of lease liabilities, operating leases |  | 1,077 |  |  | 1,056 |
Current liabilities |  | Current portion of lease liabilities, finance leases |  | 273 |  |  | 280 |
Non-current liabilities |  | Non-current portion of lease liabilities, operating leases |  | 30,628 |  |  | 30,911 |
Non-current liabilities |  | Non-current portion of lease liabilities, finance leases |  | 1,378 |  |  | 1,242 |
Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows:
| Three Months Ended March 31, |  |
(in thousands) | 2023 |  | 2022 |  |  |  |
Operating lease cost 1 | $ | 1,000 |  |  | $ | 1,048 |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |
Amortization of right-of-use assets | 78 |  |  | 67 |  |  |  |  |
Interest on finance lease liabilities | 13 |  |  | 9 |  |  |  |  |
Sublease income | (91) |  |  | (33) |  |  |  |  |
Total lease cost | $ | 1,000 |  |  | $ | 1,091 |  |  |  |  |
1 Includes short term leases, which are immaterial Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of income. Future expected cash receipts from the sublease as of March 31, 2023 are as follows:
(in thousands) | Sublease Receipts
Remainder of 2023 | $ | 272 |
2024 | 370 |
2025 | 377 |
2026 | 385 |
2027 | 392 |
Thereafter | 3,786 |
Total sublease receipts | $ | 5,582 |
Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of March 31, 2023 are as follows:
(in thousands) | Operating |  | Finance
Remainder of 2023 | $ | 2,736 |  |  | $ | 300 |
2024 | 3,667 |  |  | 333 |
2025 | 3,687 |  |  | 326 |
2026 | 3,703 |  |  | 326 |
2027 | 3,765 |  |  | 326 |
Thereafter | 36,152 |  |  | 354 |
Total undiscounted minimum future lease payments | 53,710 |  |  | 1,965 |
Imputed interest | (22,005) |  |  | (314) |
Present value of lease liabilities | $ | 31,705 |  |  | $ | 1,651 |
Lease Term and Discount Rate
Weighted-average remaining lease term | March 31, 2023 |  | December 31, 2022
Operating leases | 13.37 years |  | 13.61 years
Finance leases | 5.75 years |  | 6.06 years
Weighted-average discount rate |  |  |
Operating leases | 8.32 | % |  | 8.31 | %
Finance leases | 5.85 | % |  | 2.32 | %
Leases | Leases The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of March 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $31.3 million, or 94% of the total lease liabilities on the consolidated balance sheet. During the three months ended March 31, 2023, the Company entered into new finance lease agreements resulting in an additional $0.3 million of right-of-use assets and lease liabilities. Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification |  | Financial Statement Line Item |  | March 31, 2023 |  | December 31, 2022
Assets |  | Right-of-use assets, operating leases |  | $ | 28,871 |  |  | $ | 29,224 |
Assets |  | Property, plant and equipment |  | 1,617 |  |  | 1,494 |
Current liabilities |  | Current portion of lease liabilities, operating leases |  | 1,077 |  |  | 1,056 |
Current liabilities |  | Current portion of lease liabilities, finance leases |  | 273 |  |  | 280 |
Non-current liabilities |  | Non-current portion of lease liabilities, operating leases |  | 30,628 |  |  | 30,911 |
Non-current liabilities |  | Non-current portion of lease liabilities, finance leases |  | 1,378 |  |  | 1,242 |
Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows:
| Three Months Ended March 31, |  |
(in thousands) | 2023 |  | 2022 |  |  |  |
Operating lease cost 1 | $ | 1,000 |  |  | $ | 1,048 |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |
Amortization of right-of-use assets | 78 |  |  | 67 |  |  |  |  |
Interest on finance lease liabilities | 13 |  |  | 9 |  |  |  |  |
Sublease income | (91) |  |  | (33) |  |  |  |  |
Total lease cost | $ | 1,000 |  |  | $ | 1,091 |  |  |  |  |
1 Includes short term leases, which are immaterial Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of income. Future expected cash receipts from the sublease as of March 31, 2023 are as follows:
(in thousands) | Sublease Receipts
Remainder of 2023 | $ | 272 |
2024 | 370 |
2025 | 377 |
2026 | 385 |
2027 | 392 |
Thereafter | 3,786 |
Total sublease receipts | $ | 5,582 |
Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of March 31, 2023 are as follows:
(in thousands) | Operating |  | Finance
Remainder of 2023 | $ | 2,736 |  |  | $ | 300 |
2024 | 3,667 |  |  | 333 |
2025 | 3,687 |  |  | 326 |
2026 | 3,703 |  |  | 326 |
2027 | 3,765 |  |  | 326 |
Thereafter | 36,152 |  |  | 354 |
Total undiscounted minimum future lease payments | 53,710 |  |  | 1,965 |
Imputed interest | (22,005) |  |  | (314) |
Present value of lease liabilities | $ | 31,705 |  |  | $ | 1,651 |
Lease Term and Discount Rate
Weighted-average remaining lease term | March 31, 2023 |  | December 31, 2022
Operating leases | 13.37 years |  | 13.61 years
Finance leases | 5.75 years |  | 6.06 years
Weighted-average discount rate |  |  |
Operating leases | 8.32 | % |  | 8.31 | %
Finance leases | 5.85 | % |  | 2.32 | %
Leases | Leases The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of March 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $31.3 million, or 94% of the total lease liabilities on the consolidated balance sheet. During the three months ended March 31, 2023, the Company entered into new finance lease agreements resulting in an additional $0.3 million of right-of-use assets and lease liabilities. Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification |  | Financial Statement Line Item |  | March 31, 2023 |  | December 31, 2022
Assets |  | Right-of-use assets, operating leases |  | $ | 28,871 |  |  | $ | 29,224 |
Assets |  | Property, plant and equipment |  | 1,617 |  |  | 1,494 |
Current liabilities |  | Current portion of lease liabilities, operating leases |  | 1,077 |  |  | 1,056 |
Current liabilities |  | Current portion of lease liabilities, finance leases |  | 273 |  |  | 280 |
Non-current liabilities |  | Non-current portion of lease liabilities, operating leases |  | 30,628 |  |  | 30,911 |
Non-current liabilities |  | Non-current portion of lease liabilities, finance leases |  | 1,378 |  |  | 1,242 |
Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows:
| Three Months Ended March 31, |  |
(in thousands) | 2023 |  | 2022 |  |  |  |
Operating lease cost 1 | $ | 1,000 |  |  | $ | 1,048 |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |
Amortization of right-of-use assets | 78 |  |  | 67 |  |  |  |  |
Interest on finance lease liabilities | 13 |  |  | 9 |  |  |  |  |
Sublease income | (91) |  |  | (33) |  |  |  |  |
Total lease cost | $ | 1,000 |  |  | $ | 1,091 |  |  |  |  |
1 Includes short term leases, which are immaterial Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of income. Future expected cash receipts from the sublease as of March 31, 2023 are as follows:
(in thousands) | Sublease Receipts
Remainder of 2023 | $ | 272 |
2024 | 370 |
2025 | 377 |
2026 | 385 |
2027 | 392 |
Thereafter | 3,786 |
Total sublease receipts | $ | 5,582 |
Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of March 31, 2023 are as follows:
(in thousands) | Operating |  | Finance
Remainder of 2023 | $ | 2,736 |  |  | $ | 300 |
2024 | 3,667 |  |  | 333 |
2025 | 3,687 |  |  | 326 |
2026 | 3,703 |  |  | 326 |
2027 | 3,765 |  |  | 326 |
Thereafter | 36,152 |  |  | 354 |
Total undiscounted minimum future lease payments | 53,710 |  |  | 1,965 |
Imputed interest | (22,005) |  |  | (314) |
Present value of lease liabilities | $ | 31,705 |  |  | $ | 1,651 |
Lease Term and Discount Rate
Weighted-average remaining lease term | March 31, 2023 |  | December 31, 2022
Operating leases | 13.37 years |  | 13.61 years
Finance leases | 5.75 years |  | 6.06 years
Weighted-average discount rate |  |  |
Operating leases | 8.32 | % |  | 8.31 | %
Finance leases | 5.85 | % |  | 2.32 | %

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