Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
 3 Months Ended
Mar. 31, 2024
Leases [Abstract]  
Leases Leases
As Lessee
The Company’s operating leases are primarily for office space, service facility centers and equipment under operating lease arrangements that expire at various dates over the next seven years. The Company’s leases do not contain any restrictive covenants. The Company’s office leases generally contain renewal options for periods ranging from one to five years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s office leases do not contain any material residual value guarantees. The Company’s equipment leases generally do not contain renewal options.
Payments due under the Company’s operating leases include fixed payments as well as variable payments. For the Company’s office leases, variable payments include amounts for the Company’s proportionate share of operating expenses, utilities, property taxes, insurance, common area maintenance and other facility-related expenses. For the Company’s equipment leases, variable payments may consist of sales taxes, property taxes and other fees.
The components of lease costs for the three months ended March 31, 2024 and 2023 are as follows (in thousands):
  Three Months Ended
March 31,
  2024 2023
Operating lease cost $ 473  $ 352 
Variable lease cost 75  76 
Total lease cost $ 548  $ 428 
Supplemental cash flow information and non-cash activity related to the Company’s leases are as follows (in thousands):
  Three Months Ended
March 31,
2024 2023
Cash paid for amounts included in the measurement of lease liabilities and right of use assets:    
Operating cash flow from operating leases $ 530  $ 449 
 
Right of use assets obtained in exchange for lease obligations:
Operating leases $ —  $ 381 
Increases to right of use assets resulting from lease modifications:
Operating leases $ —  $ 160 
Weighted average remaining lease terms and discount rates for the Company’s operating leases are as follows:
  As of March 31,
  2024 2023
 
 
Years
Years
Weighted average remaining lease term: 6.0 6.2
  Rate Rate
Weighted average discount rate: 7.8% 7.0%
Future maturities of lease liabilities as of March 31, 2024 are as follows (in thousands):
 
Operating
Leases
2024 $ 1,309 
2025 1,837 
2026 1,654 
2027 1,478 
2028 1,429 
2029 and thereafter
 2,424 
Total undiscounted lease payments 10,131 
Less: Imputed interest (3,266)
Total lease liabilities $ 6,865 
The long-term portion of the lease liabilities included in the amounts above is $5.3 million with the remainder included in other current liabilities in the Condensed Consolidated Balance Sheet.
As Lessor:
We lease medical equipment to customers, often in conjunction with arrangements to provide consumable medical products. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options, varies by customer. The Company elected the “combining lease and non-lease components” practical expedient for all qualifying non-lease components.
The components of the Company’s lease revenues consisted of the following (in thousands):
Three Months Ended
March 31,
2024 2023
Net operating lease revenue $ 6,111  $ 5,910 
Sales-type lease revenue 257  494 
Total lease revenue $ 6,368  $ 6,404 
The components of our net investment in sales-type leases as of March 31, 2024 and December 31, 2023 were (in thousands):
March 31,
2024		 December 31,
2023
Lease receivable $ 2,531  $ 2,583 
Net investment in leases $ 2,531  $ 2,583 
Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 were (in thousands):
March 31,
2024		 December 31,
2023
Accounts receivable, net $ 1,061  $ 1,067 
Other assets 1,470  1,516 
Total $ 2,531  $ 2,583 
Future maturities of sales-type leases as of March 31, 2024 are as follows (in thousands):
Sales-Type Leases
2024 $ 985 
2025 1,292 
2026 614 
2027 12 
2028 — 
Thereafter — 
Total undiscounted lease payments 2,903 
Less: Imputed interest (372)
Total lease receivables $ 2,531 
Leases Leases
As Lessee
The Company’s operating leases are primarily for office space, service facility centers and equipment under operating lease arrangements that expire at various dates over the next seven years. The Company’s leases do not contain any restrictive covenants. The Company’s office leases generally contain renewal options for periods ranging from one to five years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s office leases do not contain any material residual value guarantees. The Company’s equipment leases generally do not contain renewal options.
Payments due under the Company’s operating leases include fixed payments as well as variable payments. For the Company’s office leases, variable payments include amounts for the Company’s proportionate share of operating expenses, utilities, property taxes, insurance, common area maintenance and other facility-related expenses. For the Company’s equipment leases, variable payments may consist of sales taxes, property taxes and other fees.
The components of lease costs for the three months ended March 31, 2024 and 2023 are as follows (in thousands):
  Three Months Ended
March 31,
  2024 2023
Operating lease cost $ 473  $ 352 
Variable lease cost 75  76 
Total lease cost $ 548  $ 428 
Supplemental cash flow information and non-cash activity related to the Company’s leases are as follows (in thousands):
  Three Months Ended
March 31,
2024 2023
Cash paid for amounts included in the measurement of lease liabilities and right of use assets:    
Operating cash flow from operating leases $ 530  $ 449 
 
Right of use assets obtained in exchange for lease obligations:
Operating leases $ —  $ 381 
Increases to right of use assets resulting from lease modifications:
Operating leases $ —  $ 160 
Weighted average remaining lease terms and discount rates for the Company’s operating leases are as follows:
  As of March 31,
  2024 2023
 
 
Years
Years
Weighted average remaining lease term: 6.0 6.2
  Rate Rate
Weighted average discount rate: 7.8% 7.0%
Future maturities of lease liabilities as of March 31, 2024 are as follows (in thousands):
 
Operating
Leases
2024 $ 1,309 
2025 1,837 
2026 1,654 
2027 1,478 
2028 1,429 
2029 and thereafter
 2,424 
Total undiscounted lease payments 10,131 
Less: Imputed interest (3,266)
Total lease liabilities $ 6,865 
The long-term portion of the lease liabilities included in the amounts above is $5.3 million with the remainder included in other current liabilities in the Condensed Consolidated Balance Sheet.
As Lessor:
We lease medical equipment to customers, often in conjunction with arrangements to provide consumable medical products. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options, varies by customer. The Company elected the “combining lease and non-lease components” practical expedient for all qualifying non-lease components.
The components of the Company’s lease revenues consisted of the following (in thousands):
Three Months Ended
March 31,
2024 2023
Net operating lease revenue $ 6,111  $ 5,910 
Sales-type lease revenue 257  494 
Total lease revenue $ 6,368  $ 6,404 
The components of our net investment in sales-type leases as of March 31, 2024 and December 31, 2023 were (in thousands):
March 31,
2024		 December 31,
2023
Lease receivable $ 2,531  $ 2,583 
Net investment in leases $ 2,531  $ 2,583 
Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 were (in thousands):
March 31,
2024		 December 31,
2023
Accounts receivable, net $ 1,061  $ 1,067 
Other assets 1,470  1,516 
Total $ 2,531  $ 2,583 
Future maturities of sales-type leases as of March 31, 2024 are as follows (in thousands):
Sales-Type Leases
2024 $ 985 
2025 1,292 
2026 614 
2027 12 
2028 — 
Thereafter — 
Total undiscounted lease payments 2,903 
Less: Imputed interest (372)
Total lease receivables $ 2,531 
Leases Leases
As Lessee
The Company’s operating leases are primarily for office space, service facility centers and equipment under operating lease arrangements that expire at various dates over the next seven years. The Company’s leases do not contain any restrictive covenants. The Company’s office leases generally contain renewal options for periods ranging from one to five years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s office leases do not contain any material residual value guarantees. The Company’s equipment leases generally do not contain renewal options.
Payments due under the Company’s operating leases include fixed payments as well as variable payments. For the Company’s office leases, variable payments include amounts for the Company’s proportionate share of operating expenses, utilities, property taxes, insurance, common area maintenance and other facility-related expenses. For the Company’s equipment leases, variable payments may consist of sales taxes, property taxes and other fees.
The components of lease costs for the three months ended March 31, 2024 and 2023 are as follows (in thousands):
  Three Months Ended
March 31,
  2024 2023
Operating lease cost $ 473  $ 352 
Variable lease cost 75  76 
Total lease cost $ 548  $ 428 
Supplemental cash flow information and non-cash activity related to the Company’s leases are as follows (in thousands):
  Three Months Ended
March 31,
2024 2023
Cash paid for amounts included in the measurement of lease liabilities and right of use assets:    
Operating cash flow from operating leases $ 530  $ 449 
 
Right of use assets obtained in exchange for lease obligations:
Operating leases $ —  $ 381 
Increases to right of use assets resulting from lease modifications:
Operating leases $ —  $ 160 
Weighted average remaining lease terms and discount rates for the Company’s operating leases are as follows:
  As of March 31,
  2024 2023
 
 
Years
Years
Weighted average remaining lease term: 6.0 6.2
  Rate Rate
Weighted average discount rate: 7.8% 7.0%
Future maturities of lease liabilities as of March 31, 2024 are as follows (in thousands):
 
Operating
Leases
2024 $ 1,309 
2025 1,837 
2026 1,654 
2027 1,478 
2028 1,429 
2029 and thereafter
 2,424 
Total undiscounted lease payments 10,131 
Less: Imputed interest (3,266)
Total lease liabilities $ 6,865 
The long-term portion of the lease liabilities included in the amounts above is $5.3 million with the remainder included in other current liabilities in the Condensed Consolidated Balance Sheet.
As Lessor:
We lease medical equipment to customers, often in conjunction with arrangements to provide consumable medical products. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options, varies by customer. The Company elected the “combining lease and non-lease components” practical expedient for all qualifying non-lease components.
The components of the Company’s lease revenues consisted of the following (in thousands):
Three Months Ended
March 31,
2024 2023
Net operating lease revenue $ 6,111  $ 5,910 
Sales-type lease revenue 257  494 
Total lease revenue $ 6,368  $ 6,404 
The components of our net investment in sales-type leases as of March 31, 2024 and December 31, 2023 were (in thousands):
March 31,
2024		 December 31,
2023
Lease receivable $ 2,531  $ 2,583 
Net investment in leases $ 2,531  $ 2,583 
Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 were (in thousands):
March 31,
2024		 December 31,
2023
Accounts receivable, net $ 1,061  $ 1,067 
Other assets 1,470  1,516 
Total $ 2,531  $ 2,583 
Future maturities of sales-type leases as of March 31, 2024 are as follows (in thousands):
Sales-Type Leases
2024 $ 985 
2025 1,292 
2026 614 
2027 12 
2028 — 
Thereafter — 
Total undiscounted lease payments 2,903 
Less: Imputed interest (372)
Total lease receivables $ 2,531