LEASES

9 Months Ended

Sep. 30, 2021

The Company has operating leases for corporate offices, distribution facilities, a manufacturing plant, and certain vehicles.

The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease expenses(1):
Fixed lease expense	$	4,471	$	4,450	$	13,467	$	13,755
Variable lease expense	917		977		2,844		2,897
Total	$	5,388	$	5,427	$	16,311	$	16,652

(1) Expenses are recorded within distribution expenses and selling, general and administrative expenses on the unaudited condensed consolidated statement of operations.

Supplemental cash flow information for lease related liabilities and assets for the nine months ended September 30, 2021 and 2020 were as follows (in thousands):


	Nine Months Ended September 30,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	14,556	$	10,839


	Nine Months Ended September 30,
	2021		2020
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	1,307	$	38

During the three and nine months ended September 30, 2020, in response to the COVID-19 pandemic, the Company negotiated COVID-19 related rent concessions for several of its leased properties. The majority of these rent concessions were in the form of deferred rent payments for one or more months. The Company applied the guidance issued in the FASB Staff Q&A - Topic 842 and Topic 840: Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic, and elected to account for these rent concessions as if no changes to the lease were made and continued to recognize the straight-line lease expense. The COVID-19 related deferred rent payments as of September 30, 2020, totaled $1.4 million and were deferred to the fourth quarter of fiscal year 2020 and into fiscal year 2021. As of September 30, 2021, all deferred payments have been paid.

The aggregate future lease payments for operating leases as of September 30, 2021 were as follows (in thousands):


	Operating
2021 (excluding the nine months ended September 30, 2021)	$	4,623
2022	18,522
2023	18,540
2024	18,122
2025	18,023
2026	17,450
Thereafter	38,522
Total lease payments	133,802
Less: Interest	(27,427)
Present value of lease payments	$	106,375

Average lease terms and discount rates were as follows:


	September 30, 2021
Operating leases:
Weighted-average remaining lease term (years)	7.5
Weighted-average discount rate	6.2	%