Leases (Notes)

9 Months Ended

Sep. 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	September 30, 2024		December 31, 2023
Assets
Operating leases	Operating lease right-of-use assets	$	42,220	$	43,220
Finance leases	Property and equipment, net (a)	2,330		2,470
Total lease assets		$	44,550	$	45,690
Liabilities
Current:
Operating leases	Lease liabilities, current portion	$	7,410	$	7,410
Finance leases	Lease liabilities, current portion	490		490
Long-term:
Operating leases	Lease liabilities	37,280		37,980
Finance leases	Lease liabilities	1,370		1,710
Total lease liabilities		$	46,550	$	47,590

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(a) Finance leases were recorded net of accumulated depreciation of $0.4 million and $0.2 million as of September 30, 2024 and December 31, 2023, respectively.

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


		Three months ended September 30,				Nine months ended September 30,
	Statement of Income Location	2024		2023		2024		2023
Operating lease cost	Cost of sales and Selling, general and administrative expenses	$	2,270	$	3,140	$	7,110	$	8,860
Finance lease cost:
Depreciation of lease assets	Cost of sales	70		50		180		150
Interest on lease liabilities	Interest expense	10		10		40		40
Short-term, variable and other lease costs	Cost of sales and Selling, general and administrative expenses	1,010		1,030		3,160		2,510
Total lease cost		$	3,360	$	4,230	$	10,490	$	11,560

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


Year ended December 31,	Operating Leases(a)		Finance Leases(a)
2024 (excluding the nine months ended September 30, 2024)	$	2,270	$	150
2025	8,880		610
2026	9,120		700
2027	7,910		810
2028	6,470		—
Thereafter	17,180		—
Total lease payments	51,830		2,270
Less: Imputed interest	(7,140)		(410)
Present value of lease liabilities	$	44,690	$	1,860

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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 September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,360	$	2,540	$	7,040	$	7,760
Operating cash flows from finance leases	10		10		40		40
Financing cash flows from finance leases	120		120		360		320
Lease assets obtained in exchange for new lease liabilities:
Operating leases	4,170		3,560		5,120		8,340
Finance leases	—		—		—		2,620

The weighted-average remaining lease term of the Company's operating leases and finance leases as of September 30, 2024 is 6.37 years and 2.82 years, respectively. The weighted-average discount rate for the operating leases and finance leases as of September 30, 2024 is 4.2% and 2.6%, respectively.