Leases

We lease certain office space, warehouses, land, and equipment. Leases in the consolidated balance sheets consisted of the following at December 31:


(In thousands)	Balance Sheet Classification	2025		2024
Assets:
Operating	Operating lease assets	$	11,195	$	11,793
Finance	Property, plant and equipment, net	12,816		7,316
Total lease assets		$	24,011	$	19,109
Liabilities:
Current:
Operating	Accrued liabilities	$	2,442	$	2,162
Finance	Current debt	5,170		2,794
Noncurrent:
Operating	Noncurrent operating lease liabilities	9,877		10,896
Finance	Long-term debt, less current portion	6,392		4,827
Total lease liabilities		$	23,881	$	20,679

Lease costs in the consolidated statements of operations were as follows:


	Year Ended December 31,
(In thousands)	2025		2024		2023
Operating lease expenses
Long-term operating leases expenses	$	2,686	$	2,383	$	2,568
Short-term operating leases expenses	2,852		1,874		3,226
Total operating lease expenses	5,538		4,257		5,794

Amortization of leased assets for finance leases	3,544		2,818		1,744

Sublease income	(1,172)		(978)		(758)

Total net lease cost	$	7,910	$	6,097	$	6,780

Total operating lease expenses approximate cash paid during each period. Interest for finance leases is not material. Operating lease expenses and amortization of leased assets for finance leases are included in either cost of revenues or selling, general and administrative expenses. Interest for finance leases is included in interest expense, net.

The sublease income in the table above relates to our principal executive offices in The Woodlands, Texas. In addition, we own a facility containing approximately 108,000 square feet of office space (approximately 85,000 square feet of which is currently being leased or available to be leased to third parties) on approximately 11 acres of land in Katy, Texas, which houses certain other administrative offices. From this facility, we generated lease income of $2.9 million, $0.8 million, and $0.5 million for 2025, 2024, and 2023, respectively. Such sublease and lease income associated with our principal executive offices and other administrative offices is included in selling, general and administrative expenses, or other operating income.

We also enter into certain cross-rentals as required to meet customer demand in which we rent matting systems from vendors and then re-rent them to our customers. These leases generally have initial terms of 12 months or less and therefore are not recorded in the balance sheet. For 2025, we recognized approximately $11 million of lease expense (included in cost of revenues) and re-rent revenue (included in rental revenues) associated with the cross-rentals. We had minimal cross-rentals in 2024 or 2023.

For information regarding revenues from the rental of our matting systems, see Note 13.

The maturity of lease liabilities as of December 31, 2025 is as follows:


(In thousands)	Operating Leases		Finance Leases		Total
2026	$	3,072	$	5,967	$	9,039
2027	2,940		4,120		7,060
2028	2,604		1,909		4,513
2029	2,301		764		3,065
2030	1,934		131		2,065
Thereafter	1,322		—		1,322
Total lease payments	14,173		12,891		27,064
Less: Interest	1,854		1,329		3,183
Present value of lease liabilities	$	12,319	$	11,562	$	23,881

During 2025, we entered into $1.7 million and $4.7 million of new operating lease liabilities and finance lease liabilities, respectively, in exchange for leased assets. In addition, the November 2025 Grassform acquisition resulted in $1.2 million and $2.9 million of new operating lease liabilities and finance lease liabilities, respectively. See Note 2 for additional information. During 2024, we entered into $1.1 million and $3.5 million of new operating lease liabilities and finance lease liabilities, respectively, in exchange for leased assets.

Weighted-average remaining lease terms and the weighted average discount rates are as follows:


Lease Term and Discount Rate	December 31, 2025
Weighted-average remaining lease term (years)
Operating leases	5.0
Finance leases	2.5
Weighted-average discount rate
Operating leases	5.1	%
Finance leases	8.5	%

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.

NPK International Inc. Leases Disclosure

About Leases Disclosures

Other Available Disclosures