Annual report [Section 13 and 15(d), not S-K Item 405]

LEASES

v3.25.0.1
LEASES
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
LEASES LEASES
The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain office equipment under finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
If the lease arrangement also contains non-lease components, the Company elected the practical expedient not to separate any combined lease and non-lease components for all lease contracts. For our real estate leases, the payments used in the calculation of a new lease liability include fixed payments and variable payments (if the variable payments are based on an index) over the remaining lease term. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Consolidated Balance Sheets, while variable lease payments based on usage of the underlying asset have been excluded and are expensed in the period they are incurred, as they do not represent present rights or obligations. Variable lease components for leases relate primarily to common area maintenance charges and other separately billed lessor services, sales and real estate taxes.
Any new additional operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets are based on the present value of the remaining minimum rental payments. The Company’s operating lease liability increased approximately $1.0 million as a result of acquiring ROU assets from new leases entered into during the year ended December 31, 2024. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution.
The following is a summary of the Company’s ROU assets and lease liabilities at December 31:
(In thousands) 2024 2023
Operating Leases:
Operating Right-of-Use Assets, Gross $ 43,626  $ 43,528 
Less Accumulated Right-of-Use Asset Impairment —  53 
Less Accumulated Amortization 20,017  15,566 
Operating Right-of-Use Assets, Net $ 23,609  $ 27,909 
Short-term Operating Lease Liabilities $ 4,697  $ 5,069 
Long-term Operating Lease Liabilities 20,508  24,376 
Operating Lease Liabilities $ 25,205  $ 29,445 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 329  $ 274 
Less Accumulated Amortization 149  80 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 180  $ 194 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 79  $ 97 
Long-term Finance Lease Liabilities — Included in Other Liabilities 48  104 
Finance Lease Liabilities $ 127  $ 201 
The following is a summary of the Company’s total lease costs as of December 31:
(In thousands) 2024 2023
Finance Lease Cost:
Amortization of ROU Assets $ 76  $ 54 
Interest on Lease Liabilities 10  9 
Total Finance Lease Cost 86  63 
Operating Lease Cost 6,731  6,352 
Impairment Charge of Operating Lease ROU Asset —  53 
Variable Lease Cost 2,550  2,240 
Short-term Lease Cost (excluding month-to-month) 178  251 
Less Sublease and Rental Income (969) (548)
Total Operating Lease Cost 8,490  8,348 
Total Net Lease Cost $ 8,576  $ 8,411 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2024 2023
Operating Cash Flow for Finance Leases $ 10  $ 9 
Operating Cash Flow for Operating Leases $ 6,664  $ 6,180 
Financing Cash Flow for Finance Leases $ 135  $ 47 
As permitted by ASC 842, leases with expected durations of less than 12 months from inception (i.e. short-term leases) were excluded from the Company’s calculation of its lease liability and ROU asset.
The weighted-average remaining term for the Company’s operating and financing leases are approximately 7 years and 1 year, respectively. The weighted-average discount rates for the Company’s operating and financing leases are approximately 5.8% and 6.3%, respectively.
The following is a summary of the Company’s maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2025 $ 5,928  $ 84 
2026 4,503  43 
2027 3,802  13 
2028 3,620  — 
2029 3,024  — 
Thereafter 10,161  — 
Total Lease Payments 31,038  140 
Less: Interest 5,833  13 
Total Lease Liability $ 25,205  $ 127 
These amounts exclude annual operating lease payments of $3.3 million per year through 2033, which represents legal binding lease payments for leases signed, but not yet commenced.
LEASES LEASES
The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain office equipment under finance leases, and we lease certain production facilities, office equipment and vehicles under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.
If the lease arrangement also contains non-lease components, the Company elected the practical expedient not to separate any combined lease and non-lease components for all lease contracts. For our real estate leases, the payments used in the calculation of a new lease liability include fixed payments and variable payments (if the variable payments are based on an index) over the remaining lease term. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Consolidated Balance Sheets, while variable lease payments based on usage of the underlying asset have been excluded and are expensed in the period they are incurred, as they do not represent present rights or obligations. Variable lease components for leases relate primarily to common area maintenance charges and other separately billed lessor services, sales and real estate taxes.
Any new additional operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets are based on the present value of the remaining minimum rental payments. The Company’s operating lease liability increased approximately $1.0 million as a result of acquiring ROU assets from new leases entered into during the year ended December 31, 2024. In determining the incremental borrowing rate, we have considered borrowing data for secured debt obtained from our lending institution.
The following is a summary of the Company’s ROU assets and lease liabilities at December 31:
(In thousands) 2024 2023
Operating Leases:
Operating Right-of-Use Assets, Gross $ 43,626  $ 43,528 
Less Accumulated Right-of-Use Asset Impairment —  53 
Less Accumulated Amortization 20,017  15,566 
Operating Right-of-Use Assets, Net $ 23,609  $ 27,909 
Short-term Operating Lease Liabilities $ 4,697  $ 5,069 
Long-term Operating Lease Liabilities 20,508  24,376 
Operating Lease Liabilities $ 25,205  $ 29,445 
Finance Leases:
Finance Right-of-Use Assets, Gross $ 329  $ 274 
Less Accumulated Amortization 149  80 
Finance Right-of-Use Assets, Net — Included in Other Assets $ 180  $ 194 
Short-term Finance Lease Liabilities — Included in Other Accrued Expenses
 $ 79  $ 97 
Long-term Finance Lease Liabilities — Included in Other Liabilities 48  104 
Finance Lease Liabilities $ 127  $ 201 
The following is a summary of the Company’s total lease costs as of December 31:
(In thousands) 2024 2023
Finance Lease Cost:
Amortization of ROU Assets $ 76  $ 54 
Interest on Lease Liabilities 10  9 
Total Finance Lease Cost 86  63 
Operating Lease Cost 6,731  6,352 
Impairment Charge of Operating Lease ROU Asset —  53 
Variable Lease Cost 2,550  2,240 
Short-term Lease Cost (excluding month-to-month) 178  251 
Less Sublease and Rental Income (969) (548)
Total Operating Lease Cost 8,490  8,348 
Total Net Lease Cost $ 8,576  $ 8,411 
The following is a summary of cash paid for amounts included in the measurement of lease liabilities as of December 31:
(In thousands) 2024 2023
Operating Cash Flow for Finance Leases $ 10  $ 9 
Operating Cash Flow for Operating Leases $ 6,664  $ 6,180 
Financing Cash Flow for Finance Leases $ 135  $ 47 
As permitted by ASC 842, leases with expected durations of less than 12 months from inception (i.e. short-term leases) were excluded from the Company’s calculation of its lease liability and ROU asset.
The weighted-average remaining term for the Company’s operating and financing leases are approximately 7 years and 1 year, respectively. The weighted-average discount rates for the Company’s operating and financing leases are approximately 5.8% and 6.3%, respectively.
The following is a summary of the Company’s maturity of lease liabilities:
(In thousands) Operating Leases Financing Leases
2025 $ 5,928  $ 84 
2026 4,503  43 
2027 3,802  13 
2028 3,620  — 
2029 3,024  — 
Thereafter 10,161  — 
Total Lease Payments 31,038  140 
Less: Interest 5,833  13 
Total Lease Liability $ 25,205  $ 127 
These amounts exclude annual operating lease payments of $3.3 million per year through 2033, which represents legal binding lease payments for leases signed, but not yet commenced.