Note 5. Leases
The Company has entered into leases for building facilities, vehicles and other equipment. The Company’s leases have remaining contractual terms through March 31, 2032, some of which have options to extend the lease for up to 10 years. For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease renewal until it is reasonably certain that the Company will exercise that option. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Supplemental consolidated balance sheet information related to leases is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | As of June 30, |
| (In thousands) | | Classification | | 2025 | | 2024 |
| Operating lease assets | | Right-of-use operating lease assets | | $ | 38,347 | | | $ | 35,241 | |
| Finance lease assets | | Property, plant and equipment, net | | 82 | | | 246 | |
| Total lease assets | | | | $ | 38,429 | | | $ | 35,487 | |
| | | | | | |
| Operating lease liabilities - current | | Operating lease liabilities - current | | 16,773 | | | 14,046 | |
| Finance lease liabilities - current | | Other current liabilities | | 96 | | | 193 |
| Operating lease liabilities - noncurrent | | Operating lease liabilities - noncurrent | | 22,195 | | | 21,766 | |
| Finance lease liabilities - noncurrent | | Other long-term liabilities | | — | | | 82 |
| Total lease liabilities | | | | $ | 39,064 | | | $ | 36,087 | |
The components of lease expense are as follows:
| | | | | | | | | | | | | | | | |
| | | | | | |
| | For the Years Ended June 30, | | |
| (In thousands) | | 2025 | | 2024 | | |
| Operating lease expense | | $ | 19,318 | | | $ | 13,785 | | | |
| Finance lease expense: | | | | | | |
| Amortization of finance lease assets | | 164 | | | 164 | | | |
| Interest on finance lease liabilities | | 13 | | | 24 | | | |
| Total lease expense | | $ | 19,495 | | | $ | 13,973 | | | |
The maturities of the lease liabilities are as follows:
| | | | | | | | | | | | | | |
| | For the Years Ended June 30, |
| (In thousands) | | Operating Leases | | Finance Leases |
| 2026 | | $ | 16,773 | | | $ | 96 | |
| 2027 | | 11,159 | | | — | |
| 2028 | | 8,108 | | | — | |
| 2029 | | 4,884 | | | — | |
| 2030 | | 1,601 | | | — | |
| Thereafter | | 1,130 | | | — | |
| Total lease payments | | 43,655 | | | 96 | |
| Less: interest | | (4,687) | | | — | |
| Total lease obligations | | $ | 38,968 | | | $ | 96 | |
Lease term and discount rate:
| | | | | | | | | | | | | | |
| | For the Years Ended June 30, |
| | 2025 | | 2024 |
| Weighted-average remaining lease terms (in years): | | | | |
| Operating lease | | 4.0 | | 5.2 |
| Finance lease | | 0.5 | | 1.5 |
| | | | |
| Weighted-average discount rate: | | | | |
| Operating lease | | 6.56 | % | | 6.65 | % |
| Finance lease | | 6.50 | % | | 6.50 | % |
Other Information:
| | | | | | | | | | | | | | |
| | For the Years Ended June 30, |
| (In thousands) | | 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | |
| Operating cash flows from operating leases | | $ | 18,221 | | | $ | 12,956 | |
| Operating cash flows from finance leases | | 13 | | | 24 | |
| Financing cash flows from finance leases | | 193 | | | 193 | |
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.