Leases (Notes)

6 Months Ended

Jun. 30, 2024

Leases

The majority of the Company's lease obligations are non-cancelable operating leases for certain equipment and facilities. The Company's finance leases are for certain equipment as part of the Company's acquisition of Aarts. Leases with an initial term of 12 months or less are not recorded on the balance sheet; expense related to these leases is recognized on a straight-line basis over the lease term.

Supplemental balance sheet information related to the Company's leases are shown below (dollars in thousands):


	Balance Sheet Location	June 30, 2024		December 31, 2023
Assets
Operating leases	Operating lease right-of-use assets	$	39,700	$	43,220
Finance leases	Property and equipment, net (a)	2,300		2,470
Total lease assets		$	42,000	$	45,690
Liabilities
Current:
Operating leases	Lease liabilities, current portion	$	7,420	$	7,410
Finance leases	Lease liabilities, current portion	470		490
Long-term:
Operating leases	Lease liabilities	34,630		37,980
Finance leases	Lease liabilities	1,440		1,710
Total lease liabilities		$	43,960	$	47,590

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(a) Finance leases were recorded net of accumulated depreciation of $0.3 million and $0.2 million as of June 30, 2024 and December 31, 2023, respectively.

The components of lease expense are as follows (dollars in thousands):


		Three months ended June 30,				Six months ended June 30,
	Statement of Income Location	2024		2023		2024		2023
Operating lease cost	Cost of sales and Selling, general and administrative expenses	$	2,560	$	3,140	$	4,840	$	5,720
Finance lease cost:
Depreciation of lease assets	Cost of sales	50		60		110		100
Interest on lease liabilities	Interest expense	20		20		30		30
Short-term, variable and other lease costs	Cost of sales and Selling, general and administrative expenses	1,060		840		2,150		1,480
Total lease cost		$	3,690	$	4,060	$	7,130	$	7,330

Maturities of lease liabilities are as follows (dollars in thousands):


Year ended December 31,	Operating Leases(a)		Finance Leases(a)
2024 (excluding the six months ended June 30, 2024)	$	4,520	$	260
2025	8,470		520
2026	8,740		590
2027	7,520		690
2028	5,580		—
Thereafter	12,830		—
Total lease payments	47,660		2,060
Less: Imputed interest	(5,610)		(150)
Present value of lease liabilities	$	42,050	$	1,910

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(a) The maturity table excludes cash flows associated with exited lease facilities. Liabilities for exited lease facilities are included in accrued liabilities and other long-term liabilities in the accompanying consolidated balance sheet.

Other information related to the Company's leases are as follows (dollars in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,320	$	2,630	$	4,680	$	5,220
Operating cash flows from finance leases	20		20		30		30
Financing cash flows from finance leases	120		120		240		200
Lease assets obtained in exchange for new lease liabilities:
Operating leases	80		—		950		4,780
Finance leases	—		—		—		2,620

The weighted-average remaining lease term of the Company's operating leases and finance leases as of June 30, 2024 is 6.1 years and 3.1 years, respectively. The weighted-average discount rate for the operating leases and finance leases as of June 30, 2024 is 4.1% and 2.6%, respectively.