Leases
The Company has entered into operating and financing leases primarily for real estate and vehicles. The Company will determine whether an arrangement is a lease at inception of the agreement. The operating leases have terms of one to ten years, and often include one or more options to renew. These renewal terms can extend the lease term from two to ten years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company considers these options in determining the lease term used in establishing the Company's right-of-use assets and lease obligations. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Because the rate implicit in each operating lease is not readily determinable, the Company uses its incremental borrowing rate to determine present value of the lease payments. The Company used the implicit rates within the finance leases.
The components of lease costs were as follows (in thousands) for the respective years:
| | | | | | | | | | | |
| December 31, 2024 | | December 31, 2023 |
| Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations | $ | 1,614 | | | $ | 1,578 | |
| Finance lease cost: | | | |
| Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations | 2,522 | | | 2,569 | |
| Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations | 793 | | | 890 | |
| Total finance lease cost | $ | 3,315 | | | $ | 3,459 | |
| Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations | $ | 1,475 | | | $ | 1,526 | |
| Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations | $ | 77 | | | $ | 142 | |
Right-of-use lease asset and lease liability was as follows (in thousands):
| | | | | | | | | | | |
| Operating Leases | December 31, 2024 | | December 31, 2023 |
| Right of use assets | $ | 5,850 | | | $ | 6,835 | |
| Lease liability | $ | 6,945 | | | $ | 8,076 | |
| Finance Leases | | | |
| Right of use assets | $ | 15,082 | | | $ | 17,606 | |
| Lease liability | $ | 18,071 | | | $ | 20,386 | |
Supplemental cash flow information related to the Company's operating and financial leases as follows (in thousands):
| | | | | | | | | | | |
| Operating Leases | December 31, 2024 | | December 31, 2023 |
| Lease liability payment | $ | (1,131) | | | $ | (614) | |
| Finance Leases | | | |
| Lease liability payment | $ | (2,315) | | | $ | (2,171) | |
Weighted-average remaining lease term and discount rate for the Company's operating and financing leases was as follows:
| | | | | | | | | | | | | | |
| Weighted-average remaining lease term | December 31, 2024 | | December 31, 2023 | |
| Operating lease | 4.6 | yrs. | 5.57 | yrs. |
| Finance lease | 6.19 | yrs. | 7.16 | yrs. |
| Weighted-average discount rate | | | | |
| Operating lease | 5.36 | | % | 5.17 | | % |
| Finance lease | 4.14 | | % | 4.15 | | % |
Maturities of lease liabilities for financing and operating leases were as follows as of December 31, 2024 (in thousands):
| | | | | | | | | | | |
| Financing Lease | | Operating Lease |
| 2025 | $ | 3,173 | | | $ | 1,706 | |
| 2026 | 3,216 | | | 1,688 | |
| 2027 | 3,190 | | | 1,599 | |
| 2028 | 3,270 | | | 1,633 | |
| 2029 | 3,352 | | | 1,197 | |
| 2029 and thereafter | 4,299 | | | 16 | |
| Total lease payments | 20,500 | | | 7,839 | |
| Less: imputed interest | 2,429 | | | 894 | |
| Present value of lease liabilities | $ | 18,071 | | | $ | 6,945 | |
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.