LEASES
The Company leases manufacturing facilities, office space, land, and certain vehicles under operating leases. The Company also leases certain vehicles and equipment under finance leases. As of December 31, 2025, our operating leases substantially have remaining terms of one year to eleven years, some of which include options to extend and/or terminate the leases. The Company does not have material finance leases.
The components of lease expense for the years ended December 31, 2025 and 2024 were as follows (in thousands):
| | | | | | | | | | | |
| Year Ended |
| December 31, 2025 | | December 31, 2024 |
| Operating lease expense | $ | 9,084 | | | $ | 8,613 | |
| Finance lease amortization of assets | 849 | | | 848 | |
| Finance lease interest on lease liabilities | 264 | | | 316 | |
| Short-term lease expense | 480 | | | 433 | |
| Variable lease expense | 778 | | | 562 | |
| Total lease expense | $ | 11,455 | | | $ | 10,772 | |
Operating and finance lease right of use assets and lease-related liabilities as of December 31, 2025 and 2024 were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 | | December 31, 2024 | | Classification |
| | | | | | |
| Lease right-of-use assets: | | | | | | |
| Operating leases | | $ | 30,723 | | | $ | 28,259 | | | Operating lease right-of-use assets |
| Finance leases | | 2,714 | | | 3,261 | | | Other assets |
| Total lease right-of-use assets | | $ | 33,437 | | | $ | 31,520 | | | |
| | | | | | |
| Lease-related liabilities | | | | | | |
| Current | | | | | | |
| Operating leases | | $ | 7,630 | | | $ | 7,176 | | | Current operating lease liabilities |
| Finance leases | | 815 | | | 779 | | | Accrued expenses and other current liabilities |
| Non-current | | | | | | |
| Operating leases | | 23,964 | | | 22,138 | | | Non-current operating lease liabilities |
| Finance leases | | 2,125 | | | 2,678 | | | Other long-term liabilities |
| Total lease liabilities | | $ | 34,534 | | | $ | 32,771 | | | |
The table below presents supplemental information related to leases as of December 31, 2025 and 2024:
| | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| Weighted-average remaining lease term (years) | | | |
| Finance leases | 3.6 | | 4.4 |
| Operating leases | 4.9 | | 5.3 |
| Weighted-average discount rate | | | |
| Finance leases | 8.1 | % | | 8.2 | % |
| Operating leases | 5.9 | % | | 5.4 | % |
The table below presents supplemental information related to the cash flows for operating leases recorded on the consolidated statements of cash flows (in thousands):
| | | | | | | | | | | |
| Year Ended |
| December 31, 2025 | | December 31, 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash flows for operating leases | $ | 7,576 | | | $ | 7,134 | |
The following table summarizes fiscal year maturities of operating lease liabilities as of the year ended December 31, 2025 (in thousands):
| | | | | | | | | | | | | | | | | |
| Operating Leases | | Finance Leases | | Total |
| 2026 | $ | 9,244 | | | $ | 1,016 | | | $ | 10,260 | |
| 2027 | 7,409 | | | 924 | | | 8,333 | |
| 2028 | 6,080 | | | 912 | | | 6,992 | |
| 2029 | 5,456 | | | 428 | | | 5,884 | |
| 2030 | 4,858 | | | 97 | | | 4,955 | |
| Thereafter | 3,383 | | | 4 | | | 3,387 | |
| Total lease payments | 36,430 | | | 3,381 | | | 39,811 | |
| Less: Interest | (4,836) | | | (441) | | | (5,277) | |
| Present value of lease liability | $ | 31,594 | | | $ | 2,940 | | | $ | 34,534 | |
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.