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Note 10 - Leases

12 Months Ended

Dec. 31, 2024

Lessee, Operating Leases and Finance Leases [Text Block]

10.

Leases

The Company leases certain manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery and computer equipment globally under both finance and operating leases. The Company’s leases have remaining lease terms of up to approximately 16 years, of which certain leases, primarily within the buildings and improvements asset class, include options to extend for up to 10 additional years.

The Company determines if an arrangement is or contains a lease at contract inception. The Company recognizes a right of use (ROU) asset and lease liability at the lease commencement date based on the present value of the lease payments over the lease term. As the Company’s leases generally do not provide an implicit interest rate, the incremental borrowing rate is used to determine the present value of lease payments. The incremental borrowing rate is a collateralized rate determined based on the lease term, the Company’s credit rating, and other market information available at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and is reduced by any lease incentives. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term, while lease expense for finance leases is recognized as depreciation and interest expense using the effective interest method. The Company’s variable lease expense generally consists of property tax and insurance payments that are variable in nature, however, these amounts are immaterial to the consolidated financial statements and are therefore not separately reported.

The Company has lease agreements with both lease and non-lease components, which it elected to account for as a single lease component. However, the Company did not elect to apply the recognition exception for short-term leases. The Company is applying these elections to all asset classes.

The Company is a lessor of certain of its C&I mobile products as part of a rental fleet, as well as three of its buildings that it leases to third parties. The lease income related to these arrangements is not material to the consolidated financial statements.

The Company records its operating lease cost and amortization of finance lease ROU assets within cost of goods sold or operating expenses in the consolidated statements of comprehensive income depending on the cost center of the underlying asset. The Company records its finance lease interest cost within interest expense in the consolidated statements of comprehensive income.

The components of total lease cost consist of the following:

	*Year Ended December 31,*
	*2024*		*2023*		*2022*

Operating lease cost	$	46,887	$	38,980	$	36,292
Finance lease cost:
Amortization of ROU assets		7,639		4,142		3,298
Interest on lease liabilities		5,323		2,540		1,945
Total lease cost	$	59,849	$	45,662	$	41,535

Supplemental balance sheet information related to the Company’s leases is as follows:

	*December 31,*
	*2024*			*2023*
Operating leases:
Operating lease ROU assets (1)	$	57,999		$	70,937

Operating lease liabilities - current (2)		29,316			29,388
Operating lease liabilities - noncurrent (3)		29,173			44,760
Total operating lease liabilities		58,489			74,148

Finance leases:
Finance lease ROU assets, gross		78,801			82,744
Accumulated depreciation - finance lease ROU assets		(17,587	)		(14,665	)
Finance lease ROU assets, net (4)		61,214			68,079

Finance lease liabilities - current (5)		6,845			3,785
Finance lease liabilities - noncurrent (6)		59,510			67,523
Total finance lease liabilities	$	66,355		$	71,308

(1)

Recorded in the operating lease and other assets line within the consolidated balance sheets

(2)

Recorded in the other accrued liabilities line within the consolidated balance sheets

(3)

Recorded in the operating lease and other long-term liabilities line within the consolidated balance sheets

(4)

Recorded in the property and equipment, net line within the consolidated balance sheets

(5)

Recorded in the current portion of long-term borrowings and finance lease obligations line within the consolidated balance sheets

(6)

Recorded in the long-term borrowings and finance lease obligations line within the consolidated balance sheets

Supplemental cash flow information related to the Company’s leases is as follows:

	*Year Ended December 31,*
	*2024*		*2023*		*2022*
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows - operating leases	$	48,089	$	39,073	$	36,020
Operating cash flows - finance leases		4,924		2,409		1,919
Financing cash flows - finance leases		45,906		3,618		4,931

ROU assets obtained in exchange for lease liabilities
Operating leases	$	41,389	$	17,830	$	28,766
Finance leases		43,799		47,715		2,874

Weighted average remaining lease term and discount rate information related to the Company’s leases as of December 31, 2024 and 2023 is as follows:

	December 31,
	2024			2023
Weighted average remaining lease term (in years)
Operating Leases		4.27			4.55
Finance Leases		8.92			5.34

Weighted average discount rate
Operating Leases		6.03	%		4.63	%
Finance Leases		7.03	%		6.64	%

The maturities of the Company’s lease liabilities as of December 31, 2024, are as follows:

	*Finance Leases*			*Operating Leases*
2025	$	11,118		$	31,427
2026		10,395			7,963
2027		10,156			7,205
2028		9,593			5,712
2029		8,327			4,035
After 2029		41,520			11,211
Total minimum lease payments		91,109			67,553
Interest component		(24,754	)		(9,064	)
Present value of minimum lease payments	$	66,355		$	58,489