Leases
All Leases
We elected to utilize the following practical expedients that are permitted under ASC 842:
•As an accounting policy election by class of underlying asset, elected not to separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component; and
•As an accounting policy election not to apply the recognition requirements in ASC 842 to short term leases (a lease at commencement date has a lease term of 12 months or less and does not contain a purchase option that the lessee is reasonably certain to exercise).
We have operating and finance leases for manufacturing facilities, corporate offices, and various equipment. Our leases have remaining lease terms of 1 to 13 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within 1 year.
The components of lease expense consisted of the following: | | | | | | | | | | | | | |
| (In thousands) | | |
| Years Ended | | |
| December 31, 2025 | | December 31, 2024 | | |
| Operating leases expense | $ | 11,482 | | | $ | 10,813 | | | |
| | | | | |
| Finance leases expense: | | | | | |
| Amortization of right-of-use assets | $ | 349 | | | $ | 340 | | | |
| Interest on lease liabilities | 69 | | | 52 | | | |
| Total finance lease expense | $ | 418 | | | $ | 392 | | | |
Short term and variable lease expenses for the year ended December 31, 2025 were not material.
Supplemental cash flow information related to leases was as follows: | | | | | | | | | | | |
| (In thousands) |
| Years Ended |
| December 31, 2025 | | December 31, 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 9,366 | | | $ | 9,013 | |
| Operating cash flows from finance leases | $ | 63 | | | $ | 52 | |
| Financing cash flows from finance leases | $ | 316 | | | $ | 329 | |
| | | |
| Right-of-use assets obtained in exchange for lease obligations: | | | |
| Operating leases | $ | 19,966 | | | $ | 7,042 | |
| Finance leases | $ | 365 | | | $ | 1,055 | |
The weighted average remaining lease terms were as follows: | | | | | | | | | | | |
| (In years) |
| December 31, 2025 | | December 31, 2024 |
| Operating leases | 9 | | 5 |
| Finance leases | 5 | | 5 |
When a lease is identified, we recognize a right-of-use asset and a corresponding lease liability based on the present value of the lease payments over the lease term discounted using our incremental borrowing rate, unless an implicit rate is readily determinable. As the discount rate in our leases is usually not readily available, we use our own incremental borrowing rate as the discount rate. Our incremental borrowing rate is based on the interest rate on our term loan, Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin, which is a secured rate.
The weighted average discount rates were as follows: | | | | | | | | | | | |
| Years Ended |
| December 31, 2025 | | December 31, 2024 |
| Operating leases | 4.9% | | 3.6% |
| Finance leases | 5.3% | | 4.6% |
Maturity of operating and finance lease liabilities are as follows: | | | | | | | | | | | | | | |
| | (In thousands) |
| | Operating Leases | | Finance Leases |
| 2026 | | $ | 9,536 | | | $ | 371 | |
| 2027 | | 6,293 | | | 338 | |
| 2028 | | 5,865 | | | 297 | |
| 2029 | | 4,079 | | | 283 | |
| 2030 | | 3,774 | | | 130 | |
| Thereafter | | 24,020 | | | 81 | |
| Total lease payments | | 53,567 | | | 1,500 | |
| Less imputed interest | | 11,527 | | | 166 | |
| Total | | $ | 42,040 | | | $ | 1,334 | |
Operating lease payments related to options to extend lease terms that are reasonably certain of being exercised are not significant. As of December 31, 2025, there were no legally binding minimum lease payments for operating leases signed but not yet commenced.
Finance lease payments related to options to extend lease terms that are reasonably certain of being exercised are not significant. As of December 31, 2025, there were no legally binding minimum lease payments for finance leases signed but not yet commenced.