Leases
Rockwell leases its production facilities and administrative offices as well as certain equipment used in its operations including leases on transportation equipment used in the delivery of its products. The lease terms range from monthly to six years. Rockwell occupies a 51,000 square foot facility and a 17,500 square foot facility in Wixom, Michigan under a lease expiring in August 2027. During March 2024, the lease for the Wixom facilities was extended by three years to August 2027, which was accounted for as a modification.
Rockwell also occupies a 51,000 square foot facility in Grapevine, Texas, under a lease expiring in February 2031. The lease, which previously expired in December 2025, was extended by 62 months to February 2031.
The Company previously operated in a 57,000 square foot facility in Greer, South Carolina, but the Company concluded manufacturing at that facility in the third quarter of 2025 as part of its ongoing efforts to streamline operations and improve efficiency. The lease expired in February 2026. The Company recognized a gain of $24,000 related to the early termination of this lease during the year ended December 31, 2025, resulting from the derecognition of the related right-of-use asset and lease liability.
During the year ended December 31, 2025, Rockwell entered into a lease for a 16,800-square foot storage facility in Allentown, Pennsylvania, that expires in April 2030, resulting in the recognition of a right-of-use asset and corresponding lease liability of approximately $1.0 million on the consolidated balance sheets.
The following summarizes quantitative information about the Company’s operating and finance leases (tables in thousands):
| | | | | | | | | | | | | |
| For the year ended December 31, | | |
| 2025 | | 2024 | | |
| Operating Leases | | | | | |
| Operating Lease Cost | $ | 1,868 | | | $ | 1,608 | | | |
| Variable Lease Cost | 555 | | | 508 | | | |
| Operating Lease Expense | 2,423 | | | 2,116 | | | |
| Finance Leases | | | | | |
| Amortization of Right-of-use Assets | 488 | | | 559 | | | |
| Interest on Lease Obligations | 73 | | | 114 | | | |
| Finance Lease Expense | 561 | | | 673 | | | |
| Short-term Lease Rent Expense | 21 | | | 21 | | | |
| Total Lease Expense | $ | 3,005 | | | $ | 2,810 | | | |
| | | | | |
| Other Information | | | | | |
| Operating Cash Flows from Operating Leases | $ | 1,872 | | | $ | 1,753 | | | |
| Operating Cash Flows from Finance Leases | $ | 103 | | | $ | 114 | | | |
| Financing Cash Flows from Finance Leases | $ | 529 | | | $ | 558 | | | |
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| | | | | |
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Other Information | | | |
| Weighted-average Remaining Lease Term – Operating Leases | 2.7 | | 2.4 |
| Weighted-average Remaining Lease Term – Finance Leases | 1.7 | | 2.5 |
| Weighted-average Discount Rate – Operating Leases | 9.6 | % | | 6.3 | % |
| Weighted-average Discount Rate – Finance Leases | 6.8 | % | | 6.4 | % |
Future minimum rental payments under operating and finance lease agreements are as follows (table in thousands):
| | | | | | | | | | | |
| Operating | | Finance |
| Year Ending December 31, 2026 | $ | 1,316 | | | $ | 504 | |
| Year Ending December 31, 2027 | 912 | | | 311 | |
| Year Ending December 31, 2028 | 328 | | | — | |
| Year Ending December 31, 2029 | 283 | | | — | |
| Year Ending December 31, 2030 | 96 | | | — | |
| Total | 2,935 | | | 815 | |
| Less Present Value Discount | (326) | | | (42) | |
| Operating and Finance Lease Liabilities | $ | 2,609 | | | $ | 773 | |