Note 9. Leases
The Company enters into operating leases primarily for office, production and warehouse facilities, production and non-production equipment, automobiles and computer equipment. As of July 31, 2025 and 2024, the Company had no material financing lease obligations.
The Company’s operating lease costs were as follows (in millions): | | | | | | | | | | | | | | | | |
| | Year Ended July 31, | | |
| | 2025 | | 2024 | | |
| Operating lease cost | | $ | 33.5 | | | $ | 29.5 | | | |
| Short-term lease cost | | 3.3 | | | 3.0 | | | |
| | | | | | |
| Total lease costs | | $ | 36.8 | | | $ | 32.5 | | | |
Supplemental balance sheet information for the Company was as follows (in millions): | | | | | | | | | | | | | | | | | | | | |
| | | | July 31, |
| | Balance Sheet Location | | 2025 | | 2024 |
| Right-of-use lease assets | | Other long-term assets | | $ | 60.5 | | | $ | 59.7 | |
| Current lease liabilities | | Other current liabilities | | $ | 24.1 | | | $ | 20.2 | |
| Long-term lease liabilities | | Other long-term liabilities | | $ | 37.8 | | | $ | 41.3 | |
Additional information related to operating leases was as follows: | | | | | | | | | | | | | | |
| | July 31, |
| | 2025 | | 2024 |
| Weighted average remaining lease term (years) | | 4.1 | | 3.5 |
| Weighted average discount rate | | 6.44 | % | | 4.61 | % |
Remaining payments for operating leases having initial terms of more than one year as of July 31, 2025 were as follows (in millions):
| | | | | | | | |
| | |
| 2026 | | $ | 26.4 | |
| 2027 | | 19.8 | |
| 2028 | | 12.5 | |
| 2029 | | 5.5 | |
| 2030 | | 2.2 | |
| Thereafter | | 0.3 | |
| Total future lease payments | | 66.7 | |
| Less imputed interest | | 4.8 | |
| Present value of future lease payments | | $ | 61.9 | |
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.