Annual report pursuant to Section 13 and 15(d)

Leases

v3.24.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases
Note K – Leases
The Company has entered into and acquired long-term leasing arrangements for the right to use various classes of underlying assets, including facilities, vehicles and office equipment. Certain facility leases contain predetermined fixed escalation of minimum rents at stated rates ranging from 2.00% to 4.00% per annum and three leases with annual escalations based on certain price indices. In addition, certain facility leases include renewal options that could extend the lease term for up to an additional ten years. The office equipment lease contains a renewal option that could extend the lease to consecutive 60-day terms and a purchase option.
Total Lease Costs
The following table summarizes total lease costs for the period:
Year Ended
December 31, 2023 December 31, 2022
Finance lease cost:
Amortization of ROU assets $ 434  $ 54 
Interest on lease liabilities 98  6 
Operating lease costs 4,251  3,339 
Variable lease costs 29  — 
Short-term lease costs 230  251 
Total lease costs $ 5,042  $ 3,650 
Total lease costs are included in selling, general and administrative expenses and cost of sales on the consolidated statements of operations and comprehensive income (loss).

There was no impairment recognized related to ROU assets during the year ended December 31, 2023. During the year ended December 31, 2022, the Company recognized impairment expense of $96.6 million, of which $2.7 million related to certain ROU assets within the Mission Solutions reporting unit. Please refer to Note T – Impairment Expense for additional information related to this impairment.

Supplemental Balance Sheet Information
The following table presents supplemental balance sheet information related to the Company’s operating and finance leases:
December 31, 2023 December 31, 2022
Operating Leases Finance Leases Operating Leases Finance Leases
Right-of-use assets, net reflected in the following balance sheet line items:
Property, plant and equipment, net
$ —  $ 1,551  $ —  $ 899 
Right-of-use assets 13,181  —  13,103  — 
Total right-of-use assets
 $ 13,181  $ 1,551  $ 13,103  $ 899 
Current lease balance reflected in the following balance sheet line items:
Short-term operating lease liabilities $ 3,737  $ —  $ 3,214  $ — 
Short-term finance lease liabilities —  439  —  299 
Non-current lease balance reflected in the following balance sheet line items:
Long-term operating lease liabilities 12,302  —  12,670  — 
Long-term finance lease liabilities —  1,137  —  579 
Total lease liabilities $ 16,039  $ 1,576  $ 15,884  $ 878 
Other Supplemental Information
The following table presents other supplemental information related to the Company’s leases:
Year Ended
December 31, 2023 December 31, 2022
Operating Leases Finance Leases Operating Leases Finance Leases
Cash paid for lease liabilities $ 4,273  $ 492  $ 3,076  $ 61 
Right-of-use assets obtained in exchange for new lease liabilities 3,418  1,167  8,615  944 
Weighted average remaining lease term (in years) 4.4 3.8 4.8 3.1
Weighted average discount rate 6.3  % 8.4  % 5.6  % 9.3  %

Future Lease Obligations
As of December 31, 2023, the future annual minimum lease payments for lease liabilities are as follows:
Year Operating Leases Finance Leases
2024 $ 4,582  $ 564 
2025 4,098  479 
2026 3,509  363 
2027 3,371  289 
2028 1,852  136 
Thereafter
 1,572  — 
Total lease payments
 18,984  1,831 
Less: imputed interest 2,945  255 
Present value of lease liabilities
 $ 16,039  $ 1,576 
Leases
Note K – Leases
The Company has entered into and acquired long-term leasing arrangements for the right to use various classes of underlying assets, including facilities, vehicles and office equipment. Certain facility leases contain predetermined fixed escalation of minimum rents at stated rates ranging from 2.00% to 4.00% per annum and three leases with annual escalations based on certain price indices. In addition, certain facility leases include renewal options that could extend the lease term for up to an additional ten years. The office equipment lease contains a renewal option that could extend the lease to consecutive 60-day terms and a purchase option.
Total Lease Costs
The following table summarizes total lease costs for the period:
Year Ended
December 31, 2023 December 31, 2022
Finance lease cost:
Amortization of ROU assets $ 434  $ 54 
Interest on lease liabilities 98  6 
Operating lease costs 4,251  3,339 
Variable lease costs 29  — 
Short-term lease costs 230  251 
Total lease costs $ 5,042  $ 3,650 
Total lease costs are included in selling, general and administrative expenses and cost of sales on the consolidated statements of operations and comprehensive income (loss).

There was no impairment recognized related to ROU assets during the year ended December 31, 2023. During the year ended December 31, 2022, the Company recognized impairment expense of $96.6 million, of which $2.7 million related to certain ROU assets within the Mission Solutions reporting unit. Please refer to Note T – Impairment Expense for additional information related to this impairment.

Supplemental Balance Sheet Information
The following table presents supplemental balance sheet information related to the Company’s operating and finance leases:
December 31, 2023 December 31, 2022
Operating Leases Finance Leases Operating Leases Finance Leases
Right-of-use assets, net reflected in the following balance sheet line items:
Property, plant and equipment, net
$ —  $ 1,551  $ —  $ 899 
Right-of-use assets 13,181  —  13,103  — 
Total right-of-use assets
 $ 13,181  $ 1,551  $ 13,103  $ 899 
Current lease balance reflected in the following balance sheet line items:
Short-term operating lease liabilities $ 3,737  $ —  $ 3,214  $ — 
Short-term finance lease liabilities —  439  —  299 
Non-current lease balance reflected in the following balance sheet line items:
Long-term operating lease liabilities 12,302  —  12,670  — 
Long-term finance lease liabilities —  1,137  —  579 
Total lease liabilities $ 16,039  $ 1,576  $ 15,884  $ 878 
Other Supplemental Information
The following table presents other supplemental information related to the Company’s leases:
Year Ended
December 31, 2023 December 31, 2022
Operating Leases Finance Leases Operating Leases Finance Leases
Cash paid for lease liabilities $ 4,273  $ 492  $ 3,076  $ 61 
Right-of-use assets obtained in exchange for new lease liabilities 3,418  1,167  8,615  944 
Weighted average remaining lease term (in years) 4.4 3.8 4.8 3.1
Weighted average discount rate 6.3  % 8.4  % 5.6  % 9.3  %

Future Lease Obligations
As of December 31, 2023, the future annual minimum lease payments for lease liabilities are as follows:
Year Operating Leases Finance Leases
2024 $ 4,582  $ 564 
2025 4,098  479 
2026 3,509  363 
2027 3,371  289 
2028 1,852  136 
Thereafter
 1,572  — 
Total lease payments
 18,984  1,831 
Less: imputed interest 2,945  255 
Present value of lease liabilities
 $ 16,039  $ 1,576