Cadre Holdings, Inc. Leases Disclosure
17.LEASES
The Company leases certain manufacturing and office space, retail locations, and equipment. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company has elected
the practical expedient and does not recognize a lease liability or right-of-use (“ROU”) asset for short-term leases (leases with a term of twelve months or less). The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is the rate for collateralized borrowings based on the current economic environment, credit history, credit rating, value of leases, currency in which the lease obligation is satisfied, rate sensitivity, lease term and materiality. Our operating leases have remaining contractual terms of up to five years.
The amount of assets and liabilities related to our operating leases were as follows:
| December 31, | ||||||
Balance Sheet Accounts | 2024 |
| 2023 | ||||
Assets: | |||||||
Operating lease assets | Operating lease assets | $ | 15,454 | $ | 6,554 | ||
Liabilities: | |||||||
Current: | |||||||
Operating lease liabilities | $ | 4,824 | $ | 3,510 | |||
Long-term: | |||||||
Operating lease liabilities | Long-term operating lease liabilities | 10,733 | 3,186 | ||||
Total lease liabilities | $ | 15,557 | $ | 6,696 | |||
The components of lease expense are recorded to cost of sales and selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. The components of lease expense were as follows:
Year Ended December 31, | ||||||
| 2024 |
| 2023 | |||
Fixed operating lease costs(1) | $ | 5,445 | $ | 3,981 | ||
Variable operating lease costs |
| 1,334 |
| 1,441 | ||
Total | $ | 6,779 | $ | 5,422 | ||
(1) Includes short-term leases, which are immaterial.
The weighted average remaining lease term and weighted average discount rate is as follows:
| December 31, | |||||
2024 |
| 2023 | ||||
Weighted average remaining lease term (years): |
|
| ||||
Operating leases | 3.07 | 2.53 | ||||
Weighted average discount rate: | ||||||
Operating leases | 3.14% | 3.06% | ||||
The approximate future minimum lease payments under operating leases as of December 31, 2024 are as follows:
2025 | $ | 5,267 | |
2026 |
| 4,362 | |
2027 |
| 3,262 | |
2028 |
| 2,295 | |
2029 |
| 1,196 | |
Thereafter |
| 200 | |
Total future lease payments | 16,582 | ||
Less: Amount representing interest | (1,025) | ||
Present value of lease liabilities | $ | 15,557 |
Supplemental cash flow information related to leases is as follows:
| Year Ended December 31, | |||||
2024 |
| 2023 | ||||
Cash paid for amounts included in the measurement of lease liabilities: |
|
| ||||
Operating cash flows - operating leases | $ | 5,266 | $ | 4,044 | ||
Right-of-use assets obtained in exchange for lease liabilities: | ||||||
Operating leases | $ | 10,044 | $ | 1,740 | ||
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.