Leases
The Company's operating lease right-of-use assets and operating lease liabilities represent leases for office and warehouse space, machinery and equipment, and vehicles, among other items. The Company's finance lease right-of-use assets and finance lease liabilities represent leases for vehicles. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to three years.
Lease costs recognized on the consolidated statements of operations were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | | | | Year ended December 31, |
| Lease costs | | Location in statement of operations | | 2025 | | 2024 | | 2023 |
| Operating | | Cost of goods sold | | $ | 2,486 | | | $ | 2,497 | | | $ | 2,450 | |
| | Selling, general and administrative | | 23,310 | | | 21,043 | | | 19,777 | |
| | Research and development | | 1,056 | | | 1,166 | | | 1,099 | |
| | | | | | | | |
| Finance | | | | | | | | |
| Amortization of lease assets | | Selling, general and administrative | | 636 | | | 600 | | | 475 | |
| Interest on lease liabilities | | Interest expense, net | | 92 | | | 108 | | | 86 | |
| | | | | | | | |
| Short-term and low value lease cost | | | | 400 | | | 904 | | | 1,472 | |
| Variable lease cost | | | | 3,220 | | | 3,056 | | | 2,486 | |
| Total lease cost | | | | $ | 31,200 | | | $ | 29,374 | | | $ | 27,845 | |
Supplemental balance sheet information related to the Company's leases is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | December 31, |
| (in thousands) | | Balance sheet location | | 2025 | | 2024 |
| Right-of-use assets | | | | | | |
| Finance | | Property, plant and equipment, net | | $ | 1,438 | | | $ | 1,861 | |
| Operating | | Other assets | | 125,655 | | | 75,655 | |
| | Total lease assets | | $ | 127,093 | | | $ | 77,516 | |
| | | | | | |
| Lease liabilities | | | | | | |
| Finance | | Accrued expenses and other liabilities | | $ | 550 | | | $ | 599 | |
| Operating | | Accrued expenses and other liabilities | | 24,442 | | | 19,513 | |
| Finance | | Long-term debt | | 883 | | | 1,262 | |
| Operating | | Other noncurrent liabilities | | 105,375 | | | 60,168 | |
| | Total lease liabilities | | $ | 131,250 | | | $ | 81,542 | |
The weighted average remaining lease term and the weighted average discount rate for leases is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Weighted average remaining lease term (years): | | | | | | |
| Operating | | 7.2 | | 5.6 | | 6.2 |
| Finance | | 2.9 | | 3.6 | | 4.3 |
| Weighted average discount rate: | | | | | | |
| Operating | | 4.35 | % | | 4.58 | % | | 4.01 | % |
| Finance | | 5.59 | % | | 5.13 | % | | 4.52 | % |
The following table reconciles the undiscounted cash flows for leases as of December 31, 2025 to lease liabilities recorded on the consolidated balance sheet:
| | | | | | | | | | | | | | | | | | | | |
| | Operating | | Finance | | |
| (in thousands) | | Leases | | Leases | | Total |
| 2026 | | $ | 29,600 | | | $ | 616 | | | $ | 30,216 | |
| 2027 | | 27,674 | | | 514 | | | 28,188 | |
| 2028 | | 22,208 | | | 306 | | | 22,514 | |
| 2029 | | 15,514 | | | 118 | | | 15,632 | |
| 2030 | | 11,525 | | | 5 | | | 11,530 | |
| Thereafter | | 45,466 | | | — | | | 45,466 | |
| Total future lease payments | | 151,987 | | | 1,559 | | | 153,546 | |
| Less: Interest | | (22,170) | | | (126) | | | (22,296) | |
| Present value of lease liabilities | | $ | 129,817 | | | $ | 1,433 | | | $ | 131,250 | |
| | | | | | |
| Accrued expenses and other liabilities | | $ | 24,442 | | | $ | 550 | | | $ | 24,992 | |
| Long-term debt | | — | | | 883 | | | 883 | |
| Other noncurrent liabilities | | 105,375 | | | — | | | 105,375 | |
| Total lease liabilities | | $ | 129,817 | | | $ | 1,433 | | | $ | 131,250 | |
Supplemental cash flow information related to the Company's leases are as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, |
| (in thousands) | | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | |
| Operating cash flows for operating leases | | $ | 26,686 | | | $ | 24,143 | | | $ | 21,623 | |
| Operating cash flows for finance leases | | 92 | | | 108 | | | 86 | |
| Financing cash flows for finance leases | | 638 | | | 603 | | | 478 | |
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.