MGP INGREDIENTS INCMGPI

MGP INGREDIENTS INC Leases Disclosure

10-KFiled Feb 25, 20262 min read
LEASES
The Company has operating leases for railcars, computer equipment, office spaces, warehouse facilities, a distribution facility, fulfillment center, and certain equipment. The Company has no finance leases. Leases with terms of twelve months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Lease components are accounted for separately from non-lease components, such as common-area maintenance, based on the relative, observable stand-alone prices of the components.

The Company’s leases have remaining lease terms of less than one year to ten years, some of which may include options to extend the lease. Options to renew the Company’s leases were not considered when assessing the value of the right-of-use assets because the Company is not reasonably certain that it will assert the options to renew the leases. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The following table provides supplemental balance sheet classification information related to leases:
December 31,
LeasesBalance Sheet Classification20252024
Assets
Operating
Operating lease right-of-use assets, net
$13,847 $15,540 
Total leased assets
$13,847 $15,540 
Liabilities
Current OperatingAccrued expenses$3,732 $4,157 
Noncurrent OperatingLong-term operating lease liabilities10,561 11,940 
Total operating lease liability
$14,293 $16,097 

The following table presents the components of lease costs:
Year Ended December 31,
20252024
Operating lease costs$4,828 $3,623 
Short-term lease costs435 383 
Net lease costs(a)
$5,263 $4,006 
(a) Recorded as a component of operating income on the Company’s Consolidated Statements of Income (Loss).

The following table presents supplemental cash flow and non-cash activity related to lease information:
Year Ended December 31,
20252024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$4,822 $3,612 
Right-of-use assets obtained in exchange for lease obligations
Operating leases
$763 $6,661 

The following table presents weighted average discount rate and remaining lease term:
December 31,
20252024
Weighted average discount rate
Operating leases4.94 %4.43 %
Weighted average remaining lease term
Operating leases4.5 years4.4 years
As of December 31, 2025, the future payments under operating leases having initial terms of one year or more were as follows:
2026$4,341 
20274,176 
20283,344 
20291,132 
2030983 
Thereafter2,085 
Total lease payments16,061 
Less interest(1,768)
Total operating lease liability$14,293 

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 22, 2024
2022Feb 23, 2023
2021Feb 24, 2022
2020Feb 25, 2021
2019Feb 26, 2020
2016Mar 8, 2017
2015Mar 10, 2016

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.

Other Available Disclosures

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