LEASES
The Company's leases are classified as operating leases and consist of manufacturing facilities, offices, vehicles and equipment.
Most of the Company's leases include one or more options to renew, with renewal terms that can extend the respective lease term from one month to fifteen years. The exercise of lease renewal options is at the Company's sole discretion. As of December 31, 2025 and 2024, the Company's renewal options are not part of the Company's operating lease assets and operating lease liabilities. Certain leases also include options to purchase at fair value the underlying leased asset at the Company's sole discretion.
The components of lease costs were as follows for the years ended December 31 (in thousands):
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 17,293 | | | $ | 14,344 | | | $ | 10,597 | |
| Short-term lease cost | 279 | | | 326 | | | 807 | |
| Total lease cost | $ | 17,572 | | | $ | 14,670 | | | $ | 11,404 | |
Information related to the Company's operating right-of-use assets and related operating lease liabilities were as follows for the years ended December 31 (in thousands):
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 14,256 | | | $ | 11,106 | | | $ | 9,063 | |
| Right-of-use assets obtained in exchange for new lease liabilities | $ | 28,410 | | | $ | 8,824 | | | $ | 26,921 | |
Information related to the Company's lease terms and discount rates were as follows as of December 31:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 |
| Weighted-average remaining lease term - operating leases | 6.2 | years | | 6.1 | years |
| Weighted-average discount rate - operating leases | 5.3 | % | | 5.2 | % |
The future maturity of the Company's lease liabilities were as follows as of December 31, 2025 (in thousands):
| | | | | |
| 2026 | $ | 14,218 | |
| 2027 | 10,662 | |
| 2028 | 9,714 | |
| 2029 | 8,900 | |
| 2030 | 8,088 | |
| After 2030 | 16,266 | |
| Total lease payments | 67,848 | |
| Less: present value discount | (10,169) | |
| Present value of lease liabilities | $ | 57,679 | |
The Company uses its incremental borrowing rate based on information available at the commencement date of a lease in determining the present value of lease payments as the rates implicit in most of the Company's leases are not readily determinable.
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.