Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.4
Leases
3 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases

Note 4: Leases

The Company leases retail stores, warehouse facilities, and office space. These assets and properties are generally leased under noncancelable agreements that expire at various future dates with many agreements containing renewal options for additional periods. The agreements, which have been classified as either operating or finance leases, generally provide for minimum and, in some cases percentage rent, and require the Company to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

As of December 31, 2022, the weighted average remaining lease term for operating leases is 9.12 years. The Company's weighted average discount rate for operating leases is 6.13%. Total cash payments for operating leases for the three months ended December 31, 2022 and 2021 were approximately $2.4 million and $2.5 million, respectively. Additionally, we obtained right-of-use assets in exchange for lease liabilities of approximately $1.8 million upon commencement of operating leases during the three months ended December 31, 2022.

As of December 31, 2022, the weighted average remaining lease term for finance leases is 27.47 years. The Company's weighted average discount rate for finance leases is 13.24%. Total cash payments for finance leases for the three months ended December 31, 2022 and 2021 were approximately $481,000 and $0, respectively. No additional finance leases were commenced during the three months ended December 31, 2022.

The following table details our right of use assets and lease liabilities as of December 31, 2022 and September 30, 2022 (000's):

 

 

 

December 31, 2022

 

September 30, 2022

 

Right of use asset - operating leases

 

$

33,388

 

$

33,659

 

Lease liabilities:

 

 

 

 

 

Current - operating

 

 

8,071

 

 

7,851

 

Current - finance

 

 

214

 

 

217

 

Long term - operating

 

 

29,890

 

 

30,382

 

Long term - finance

 

 

19,631

 

 

19,568

 

 

Total present value of future lease payments of operating leases as of December 31, 2022 (in $000’s):

 

Twelve months ended December 31,

 

 

 

2023

 

$

9,671

 

2024

 

 

8,335

 

2025

 

 

6,566

 

2026

 

 

4,953

 

2027

 

 

3,765

 

Thereafter

 

 

14,067

 

Total

 

 

47,357

 

Less implied interest

 

 

(9,396

)

Present value of payments

 

$

37,961

 

 

Total present value of future lease payments of finance leases as of December 31, 2022 (in $000’s):

 

Twelve months ended December 31,

 

 

 

2023

 

$

1,591

 

2024

 

 

2,015

 

2025

 

 

2,090

 

2026

 

 

2,172

 

2027

 

 

2,262

 

Thereafter

 

 

73,867

 

Total

 

 

83,997

 

Less implied interest

 

 

(64,152

)

Present value of payments

 

$

19,845

 

 

During the three months ended December 31, 2022 and 2021, the Company recorded no gain or loss settlements, nor did it record impairment charges relating to any of its leases.