LEASES
The Company has operating and finance leases for certain facilities, trailers, forklifts and other assets. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expense related to these short-term leases was immaterial for the years ended December 31, 2025, 2024 and 2023. Variable lease payments, principally related to trucks, forklifts, and index-related facility rent escalators, was immaterial for the years ended December 31, 2025, 2024 and 2023. The leases have remaining lease terms of 1 to 14 years. Certain leases include options to renew for an additional term. Where there is reasonable certainty to utilize a renewal option, we include the renewal option in the lease term used to calculate operating lease right-of-use assets and lease liabilities.
The components of lease expense were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| ($ in thousands) | | 2025 | | 2024 | | 2023 |
| Operating lease cost | | $ | 69,602 | | | $ | 64,391 | | | $ | 56,370 | |
| Finance lease cost: | | | | | | |
| Amortization of right-of-use assets | | 454 | | | — | | | — | |
| Interest on lease liabilities | | 244 | | | — | | | — | |
| Total finance lease cost | | 698 | | | — | | | — | |
| Total lease cost | | $ | 70,300 | | | $ | 64,391 | | | $ | 56,370 | |
Supplemental balance sheet information was as follows:
| | | | | | | | | | | | | | |
| | Year Ended December 31, |
| ($ in thousands) | | 2025 | | 2024 |
| Finance lease assets: | | | | |
| Property, plant and equipment, net | | $ | 2,000 | | | $ | — | |
| Finance lease liabilities: | | | | |
| Other current liabilities | | $ | 424 | | | $ | — | |
| Other long-term liabilities | | 1,626 | | | — | |
| Total finance lease liabilities | | $ | 2,050 | | | $ | — | |
Supplemental cash flow information was 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 used for operating leases | | $ | 68,799 | | | $ | 63,958 | | | $ | 55,933 | |
| Operating cash flows used for finance leases | | $ | 214 | | | $ | — | | | $ | — | |
| Finance cash flows used for finance leases | | $ | 516 | | | $ | — | | | $ | — | |
| Right-of-use assets obtained in exchange for new lease obligations: | | | | | | |
| Operating leases | | $ | 59,292 | | | $ | 77,558 | | | $ | 65,505 | |
| Finance leases | | $ | 2,672 | | | $ | — | | | $ | — | |
Other information related to leases was as follows:
| | | | | | | | | | | | | | |
| | As of December 31, |
| | 2025 | | 2024 |
| Weighted average remaining lease term, operating leases (in years) | | 5.2 | | 5.2 |
| Weighted average remaining lease term, finance leases (in years) | | 5.0 | | — | |
| Weighted average discount rate, operating leases | | 5.9 | % | | 5.8 | % |
| Weighted average discount rate, finance leases | | 6.2 | % | | — | % |
Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows:
| | | | | | | | | | | | | | |
($ in thousands) | | Operating Leases | | Finance Leases |
| 2026 | | $ | 65,153 | | | $ | 536 | |
| 2027 | | 50,440 | | | 472 | |
| 2028 | | 37,924 | | | 449 | |
| 2029 | | 26,992 | | | 433 | |
| 2030 | | 17,396 | | | 292 | |
| Thereafter | | 41,061 | | | 196 | |
| Total lease payments | | $ | 238,966 | | | $ | 2,378 | |
| Less imputed interest | | (35,121) | | | (328) | |
| Total | | $ | 203,845 | | | $ | 2,050 | |
The Company has an additional operating lease that had not yet commenced as of December 31, 2025, and therefore, approximately $0.4 million in operating lease right-of-use assets and corresponding operating lease liabilities were not included in our consolidated balance sheet as of December 31, 2025. The lease is expected to commence in the first quarter of fiscal 2026 with a lease term of 3 years.
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.