Leases
The Company leases administrative, manufacturing, research, and distribution facilities through operating leases. Several leases include fixed payments including rent and non-lease components such as common-area or other maintenance costs.
The components of total operating lease expense and sublease income are as follows for the periods presented:
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| (in thousands) | 2025 | | 2024 | | 2023 |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Operating lease costs | $ | 3,709 | | | $ | 3,664 | | | $ | 3,316 | |
| Short term lease costs | 62 | | | 576 | | | 520 | |
| Variable lease costs | 1,419 | | | 610 | | | 1,438 | |
| Total operating lease expense | $ | 5,190 | | | $ | 4,850 | | | $ | 5,274 | |
| | | | | |
| Sublease income | $ | 1,081 | | | $ | 225 | | | $ | — | |
Supplemental balance sheet information related to the operating and financing leases is as follows as of the periods presented:
| | | | | | | | | | | |
| (dollars in thousands) | December 31, 2025 | | December 31, 2024 |
| Operating Leases | | | |
| Right-of-use operating lease assets | $ | 12,732 | | | $ | 14,265 | |
| Current maturities of long-term lease obligations | $ | 2,354 | | | $ | 1,960 | |
| Long-term lease obligations | $ | 16,838 | | | $ | 19,191 | |
| Financing Leases | | | |
Right-of-use finance lease assets, net of accumulated amortization (1) | $ | 44 | | | $ | 37 | |
| Current maturities of long-term lease obligations | $ | 18 | | | $ | 9 | |
| Long-term lease obligations | $ | 32 | | | $ | 30 | |
| | | |
| Weighted average remaining lease term - operating leases | 8.1 years | | 8.8 years |
| Weighted average remaining lease term - finance leases | 1.8 years | | 3.6 years |
| | | |
| Weighted average discount rate - operating leases | 10.87 | % | | 10.95 | % |
| Weighted average discount rate - finance leases | 8.01 | % | | 14.06 | % |
__________
(1)Financing leases are included in Property and equipment, net on the Consolidated Balance Sheets.
Future minimum lease payments under operating and financing leases as of December 31, 2025 are as follows:
| | | | | |
| Years ending December 31, | (in thousands) |
| 2026 | $ | 4,294 | |
| 2027 | 3,130 | |
| 2028 | 3,122 | |
| 2029 | 3,187 | |
| 2030 | 3,100 | |
| Thereafter | 12,285 | |
| Total | 29,118 | |
| Less: Imputed interest | (9,876) | |
| Total lease obligations | 19,242 | |
| Less: Current maturities of long-term obligations | (2,372) | |
| Long-term lease obligations | $ | 16,870 | |
Lease modifications
The Company accounts for lease revisions as a lease modification when the modification effectively terminates the existing lease and creates a new lease. No lease modifications were recorded during the years ended December 31, 2025 and 2024.
Sublease Agreements
The Company subleases portions of its headquarters building in Tampa, Florida under two sublease agreements with different sublessees. The first sublease term began August 1, 2024 and expires on October 31, 2031. The Company or the sublessee can terminate the sublease agreement after 63 months with 12 months written notice. There is no option to extend the sublease agreement. The second sublease term began on February 1, 2025 and expires on January 31, 2030. The sublessee can terminate the sublease agreement after 36 months with six months written notice.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.