Leases
Finance Leases
We have finance leases primarily related to manufacturing equipment. Noncash activities involving finance lease right-of-use assets obtained in exchange for lease liabilities was $8.1 million, $0.1 million and $0.1 million for 2025, 2024 and 2023, respectively. Our expenses and payments for finance leases in 2025, 2024 and 2023, were as follows:
| | | | | | | | | | | | | | | | | |
| (Dollars in millions) | 2025 | | 2024 | | 2023 |
| Amortization expense of finance lease right-of-use assets | $ | 1.5 | | | $ | 0.5 | | | $ | 0.6 | |
| Interest expense on finance lease obligations | $ | (0.4) | | | $ | (0.1) | | | $ | (0.1) | |
| Payments on finance lease obligations | $ | 1.7 | | | $ | 0.4 | | | $ | 0.4 | |
Operating Leases
We have operating leases primarily related to manufacturing facilities and vehicles. Our new leases in 2025 and 2024 were primarily related to facility expansion. Noncash activities involving operating lease right-of-use assets obtained in exchange for lease liabilities was $0.7 million, $6.0 million and $9.6 million for 2025, 2024 and 2023, respectively. Our expenses and
payments for operating leases in 2025, 2024 and 2023, were as follows:
| | | | | | | | | | | | | | | | | |
| (Dollars in millions) | 2025 | | 2024 | | 2023 |
| Operating leases expense | $ | 5.8 | | | $ | 5.3 | | | $ | 4.1 | |
| Short-term leases expense | $ | 0.7 | | | $ | 0.8 | | | $ | 0.7 | |
| Payments on operating lease obligations | $ | 5.7 | | | $ | 4.9 | | | $ | 4.0 | |
Lease Balances in Statements of Financial Position
The assets and liabilities balances related to finance and operating leases reflected in the consolidated statements of financial position, as of December 31, 2025 and 2024, were as follows:
| | | | | | | | | | | | | | |
| (Dollars in millions) | Financial Statement Line Item | 2025 | | 2024 |
| Finance lease right-of-use assets | Property, plant and equipment, net of accumulated depreciation | $ | 8.6 | | | $ | 1.1 | |
| Operating lease right-of-use assets | Operating lease right-of-use assets | $ | 19.2 | | | $ | 24.1 | |
| | | | |
| Finance lease obligations, current portion | Other accrued liabilities | $ | 1.4 | | | $ | 0.4 | |
| Finance lease obligations, non-current portion | Other long-term liabilities | $ | 7.4 | | | $ | 0.8 | |
| Total finance lease obligations | | $ | 8.8 | | | $ | 1.2 | |
| | | | |
| Operating lease obligations, current portion | Operating lease obligations, current portion | $ | 3.9 | | | $ | 4.0 | |
| Operating lease obligations, non-current portion | Operating lease obligations, non-current portion | $ | 17.9 | | | $ | 20.6 | |
| Total operating lease obligations | | $ | 21.8 | | | $ | 24.6 | |
Lease Impairment
Long-lived assets, including lease right-of-use assets, are evaluated for recoverability whenever events or circumstances indicate the carrying value of an asset group may not be recoverable. As a result of triggering events identified for our Mexico facility lease during the fourth quarter of 2025, we tested the lease right-of-use asset for recoverability by comparing the estimated future undiscounted cash flows of the asset group to its carrying value and concluded that a quantitative impairment assessment was required.
Based on our quantitative impairment assessment, we concluded our Mexico facility lease right-of-use asset’s carrying value exceeded its estimated fair value. As a result, we recorded a non-cash impairment charge to the lease right-of-use asset of $1.9 million. The impairment charges was recorded in the “Restructuring and impairment charges” line item in the consolidated statements of operations.
Future Minimum Lease Payments
The following table includes future minimum lease payments under finance and operating leases together with the present value of the future minimum lease payments as of December 31, 2025:
| | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | Finance | | | | | | Operating |
| | | | | | | | | | | |
| 2026 | | | | | $ | 1.8 | | | | | | | $ | 5.1 | |
| 2027 | | | | | 1.6 | | | | | | | 4.2 | |
| 2028 | | | | | 1.5 | | | | | | | 3.3 | |
| 2029 | | | | | 1.4 | | | | | | | 3.2 | |
| 2030 | | | | | 1.3 | | | | | | | 3.1 | |
| Thereafter | | | | | 2.7 | | | | | | | 7.8 | |
| Total lease payments | | | | | 10.3 | | | | | | | 26.7 | |
| Less: Interest | | | | | (1.5) | | | | | | | (4.9) | |
| Present Value of Future Minimum Lease Payments | | | | | $ | 8.8 | | | | | | | $ | 21.8 | |
There were no executed leases with future commencement dates as of December 31, 2025.
The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:
| | | | | | | | | | | |
| 2025 | | 2024 |
| Weighted Average Remaining Lease Term | | | |
| Finance leases | 6.7 years | | 3.4 years |
| Operating leases | 6.4 years | | 7.3 years |
| Weighted Average Discount Rate | | | |
| Finance leases | 4.70% | | 4.33% |
| Operating leases | 5.55% | | 5.63% |