Vericel CorpVCEL
Vericel Corp Leases Disclosure
Leases
The Company leases facilities in Ann Arbor, Michigan, Cambridge, Massachusetts and Burlington, Massachusetts. The Ann Arbor facility includes office space, and the Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also leases certain equipment.
On January 28, 2022, the Company entered into a lease agreement (as amended, the “Burlington Lease”) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts (the “Premises”). The Burlington facility is complete, and the Company is currently utilizing the facility’s office space. The remaining tenant improvements to the manufacturing suites and related equipment will be placed in service when they are ready for their intended uses. Once validated, the facility’s manufacturing component will eventually become the primary manufacturing facility for MACI and Epicel.
In April 2023, in connection with the Burlington Lease, the Company entered into a construction escrow agreement (the “Construction Escrow Agreement”) with the facility’s landlord and an escrow agent. Pursuant to the terms of the Construction Escrow Agreement, in April 2023, the Company began funding, into an escrow account maintained by the escrow agent, a portion of its share of tenant improvement construction costs at the facility, which were designated as restricted cash. At the same time, the facility’s landlord began funding a portion of its tenant improvement allowance through a separate escrow account. The Company funded the remaining 50% of its required cost amount, or approximately $28.3 million, with cash on hand, pursuant to the Construction Escrow Agreement in April 2024. During the second quarter of 2025, the amounts deposited by the Company into its escrow account pursuant to the Construction Escrow Agreement were disbursed. The Company’s escrow account is now closed and approximately $5.2 million, which remained in the Company’s escrow account at the time of closure, was returned to the Company and is no longer restricted cash.
The Company has determined that certain improvements to the Premises are landlord-owned improvements and costs incurred for these improvements are accounted for as a variable lease payment. In the year ended December 31, 2024, the Company recorded a right-of-use asset related to landlord-owned improvements incurred of approximately $3.6 million.
For the years ended December 31, 2025 and 2024, lease expense of $0.3 million, and for the year ended December 31, 2023, lease expense of less than $0.1 million, was recorded related to short-term leases. For the years ended December 31, 2025, 2024 and 2023, the Company recognized $11.9 million, $12.7 million and $10.3 million, respectively, of operating lease expense. For the years ended December 31, 2025, 2024 and 2023, the Company recognized less than $0.1 million of financing lease expense.
Operating and finance lease assets and liabilities are as follows:
| December 31, | ||||||||||||||||||||
| (In thousands) | Classification | 2025 | 2024 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Operating | Right-of-use assets | $ | 64,774 | $ | 70,098 | |||||||||||||||
| Finance | 686 | 686 | ||||||||||||||||||
| Total leased assets | $ | 65,460 | $ | 70,784 | ||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating | Current portion of operating lease liabilities | $ | 13,969 | $ | 9,257 | |||||||||||||||
| Finance | 116 | 116 | ||||||||||||||||||
| Non-current | ||||||||||||||||||||
| Operating | Operating lease liabilities | 82,284 | 89,593 | |||||||||||||||||
| Finance | 522 | 570 | ||||||||||||||||||
| Total leased liabilities | $ | 96,891 | $ | 99,536 | ||||||||||||||||
Cash paid for amounts included in the measurement of the Company’s operating lease liabilities was $9.3 million and $1.7 million for the years ended December 31, 2025 and 2023, respectively. Cash received for amounts included in the measurement of the Company’s operating lease liabilities was $1.4 million for the year ended December 31, 2024. Cash paid for amounts included in the measurement of the Company’s finance lease liabilities was less than $0.1 million for the year ended December 31, 2025.
Future minimum lease payments under non-cancellable leases as of December 31, 2025 are as follows:
| (In thousands) | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | 13,969 | $ | 116 | $ | 14,085 | ||||||||||||||
| 2027 | 14,351 | 116 | 14,467 | |||||||||||||||||
| 2028 | 14,743 | 116 | 14,859 | |||||||||||||||||
| 2029 | 15,146 | 116 | 15,262 | |||||||||||||||||
| 2030 | 15,561 | 116 | 15,677 | |||||||||||||||||
| Thereafter | 57,779 | 167 | 57,946 | |||||||||||||||||
| Total lease payments | $ | 131,549 | $ | 747 | $ | 132,296 | ||||||||||||||
| Less: interest | (35,296) | (109) | (35,405) | |||||||||||||||||
| Present value of lease liabilities | $ | 96,253 | $ | 638 | $ | 96,891 | ||||||||||||||
Lease terms and discount rates are as follows:
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted-average remaining lease term (years) | ||||||||||||||
| Operating leases | 8.8 | 9.7 | ||||||||||||
| Finance leases | 6.4 | 6.9 | ||||||||||||
| Weighted-average discount rate | ||||||||||||||
| Operating leases | 6.9% | 6.9% | ||||||||||||
| Finance leases | 5.0% | 5.0% | ||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 25, 2020 | |
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.