Leases
The components of lease expense for the years ended March 31, 2026 and 2025 are as follows:
| | | | | | | | | | | |
| March 31, |
| (In thousands) | 2026 | | 2025 |
| Finance lease cost: | | | |
| Amortization of right-of-use assets | $ | 3,279 | | | $ | 2,230 | |
| Interest on lease liabilities | 1,375 | | | 375 | |
| Operating lease cost | 7,923 | | | 7,332 | |
| Short-term lease cost | 140 | | | 139 | |
| Variable lease cost | 19,387 | | | 55,399 | |
| | | |
| Total net lease cost | $ | 32,104 | | | $ | 65,475 | |
As of March 31, 2026, the maturities of lease liabilities are as follows:
| | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | |
| Year Ending March 31, | | Operating Leases | | Financing Leases | | Total |
| 2027 | | $ | 8,340 | | | $ | 3,875 | | | $ | 12,215 | |
| 2028 | | 7,957 | | | 3,875 | | | 11,832 | |
| 2029 | | 6,687 | | | 3,869 | | | 10,556 | |
| 2030 | | 6,025 | | | 3,366 | | | 9,391 | |
| 2031 | | 1,123 | | | 2,664 | | | 3,787 | |
| Thereafter | | 1,619 | | | 7,993 | | | 9,612 | |
| Total undiscounted lease payments | | 31,751 | | | 25,642 | | | 57,393 | |
| Less amount of lease payments representing interest | | (3,886) | | | (5,018) | | | (8,904) | |
| Total present value of lease payments | | $ | 27,865 | | | $ | 20,624 | | | $ | 48,489 | |
The weighted average remaining lease term and weighted average discount rate are as follows: | | | | | | | | | | | |
| | | March 31, 2026 |
| Weighted average remaining lease term (years) | | |
| Operating leases | | 4.28 |
| Financing leases | | 7.18 |
| Weighted average discount rate | | |
| Operating leases | | 6.42 | % |
| Financing leases | | 6.31 | % |
On October 1, 2024, we entered into Amendments 3 and 4 extending the Master Logistics Services Agreement with GEODIS Logistics LLC ("GEODIS") as our third-party logistics provider. Under this agreement, we have extended our May 2019 agreement that authorized GEODIS to lease a facility and equipment for an additional 65 month term. The lease and non-lease components were recorded in our fiscal 2025 financial statements. The ROU asset and operating lease liability at lease commencement was $23.0 million. The GEODIS amendments also included a new finance lease and the renewal of previous finance leases for assets purchased by GEODIS for our use under the Master Logistics Agreement. The ROU asset and finance lease liability at lease commencement was $4.7 million.
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.