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Leases

6 Months Ended

Jun. 30, 2026

Leases [Abstract]

Leases

Leases

The Company leases real estate, vehicles and other equipment under operating lease arrangements. There have been no material changes to the Company’s lease accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.

Southern California Sublease. The Company subleases substantially all of its Southern California leased office space through April 30, 2027. The Company remains obligated under the related master lease and would be required to satisfy its obligations to the landlord in the event of a sublessee default. Sublease income recognized in selling, general and administrative expense was approximately $0.3 million and $0.6 million for the three and six months ended June 30, 2026 and 2025, respectively.

The following table summarizes the lease amounts included in the Company’s condensed consolidated balance sheets:

(in thousands)			Classification on the Condensed Consolidated Balance Sheets						June 30, 2026						December 31, 2025
Assets
Operating			Operating lease right-of-use assets(1)(2)						$	18,220					$	19,792
Finance			Property and equipment, net(3)(4)						19,259						22,002
Total lease assets									$	37,479					$	41,794
Liabilities
Current
Operating			Current operating lease liabilities						$	4,592					$	4,379
Finance			Current portion of long-term debt						4,862						5,031
Noncurrent
Operating			Long-term operating lease liabilities						14,290						15,925
Finance			Long-term debt(5)						18,688						20,890
Total lease liabilities									$	42,432					$	46,225

(1)     Operating lease assets are recorded net of accumulated amortization of $20.1 million at June 30, 2026 and $17.9 million at December 31, 2025.

(2)    Includes approximately $0.7 million and $0.8 million at June 30, 2026 and December 31, 2025, respectively, related to a below-market lease recognized as a result of the Industrial Air acquisition, which was recorded as an increase to the Company’s operating lease right-of-use assets on its condensed consolidated balance sheet. The below-market lease will be amortized to amortization expense over the remaining lease term.

(3)    Finance lease vehicle assets are recorded net of accumulated amortization of $9.5 million at June 30, 2026 and $8.2 million at December 31, 2025.

(4)    Includes approximately $2.2 million of net property assets associated with the Company’s Pontiac Facility at both June 30, 2026 and December 31, 2025.

(5)    Includes approximately $5.4 million associated with the Company’s sale and leaseback financing transaction at both June 30, 2026 and December 31, 2025. See Note 6 – Debt for further detail.

The following table summarizes the lease costs included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025:

									Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)			Classification on the Condensed Consolidated Statement of Operations						2026						2025						2026						2025
Operating lease cost			Cost of revenue(1)						$	813					$	911					$	1,613					$	1,769
Operating lease cost			Selling, general and administrative(1)						603						419						1,204						866
Finance lease cost
Amortization			Cost of revenue(2)						1,387						1,042						2,811						1,971
Interest			Interest expense, net(2)						246						196						507						372
Total lease cost									$	3,049					$	2,568					$	6,135					$	4,978

(1)    Operating lease costs recorded in cost of revenue included $0.2 million of variable lease costs for both the three months ended June 30, 2026 and 2025, respectively, and $0.3 million for both the six months ended June 30, 2026 and 2025, respectively. In addition, $0.1 million of variable lease costs are included in selling, general and administrative for both the three months ended June 30, 2026 and 2025, and $0.2 million for both the six months ended June 30, 2026 and 2025. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities.

(2)     Finance lease costs recorded in cost of revenue includes variable lease costs of $1.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $2.0 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges.

The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s condensed consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of June 30, 2026 were as follows (in thousands):

Year ending:						Vehicles						Pontiac Facility						Total Finance Lease Obligations																		Operating Lease Obligations						Sublease Receipts(1)
Remainder of 2026						$	2,893					$	272					$	3,165																	$	2,853					$	572
2027						5,209						555						5,764																		5,051						495
2028						4,529						569						5,098																		4,233						14
2029						4,697						583						5,280																		3,537						—
2030						2,715						597						3,312																		2,255						—
Thereafter						50						12,552						12,602																		3,985						—
Total minimum lease payments						20,093						15,128						35,221																		21,914						$	1,081
Financing Component (2)						(1,894)						(9,777)						(11,671)																		(3,032)
Net present value of minimum lease payments						18,199						5,351						23,550																		18,882
Less: current portion of finance and operating lease obligations						(4,862)						—						(4,862)																		(4,592)
Long-term finance and operating lease obligations						$	13,337					$	5,351					$	18,688																	$	14,290

(1)    Primarily associated with the aforementioned third-party sublease agreement.

(2)    The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

The following is a summary of the lease terms and discount rates as of:

			June 30, 2026						December 31, 2025
Weighted average lease term (in years):
Operating			5.12						5.43
Finance (1)			3.57						3.95
Weighted average discount rate:
Operating			6.19		%				6.18		%
Finance (1)			5.36		%				5.41		%

(1)     Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 6 – Debt for further detail.

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

						Six Months Ended June 30,
(in thousands)						2026						2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	2,723					$	2,611
Operating cash flows from finance leases						450						345
Financing cash flows from finance leases						2,501						1,767
Right-of-use assets exchanged for lease liabilities:
Operating leases						710						1,676
Finance leases						177						7,933
Right-of-use assets disposed or adjusted modifying finance leases liabilities						20						—

Leases

Leases

The Company leases real estate, vehicles and other equipment under operating lease arrangements. There have been no material changes to the Company’s lease accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.

Southern California Sublease. The Company subleases substantially all of its Southern California leased office space through April 30, 2027. The Company remains obligated under the related master lease and would be required to satisfy its obligations to the landlord in the event of a sublessee default. Sublease income recognized in selling, general and administrative expense was approximately $0.3 million and $0.6 million for the three and six months ended June 30, 2026 and 2025, respectively.

The following table summarizes the lease amounts included in the Company’s condensed consolidated balance sheets:

(in thousands)			Classification on the Condensed Consolidated Balance Sheets						June 30, 2026						December 31, 2025
Assets
Operating			Operating lease right-of-use assets(1)(2)						$	18,220					$	19,792
Finance			Property and equipment, net(3)(4)						19,259						22,002
Total lease assets									$	37,479					$	41,794
Liabilities
Current
Operating			Current operating lease liabilities						$	4,592					$	4,379
Finance			Current portion of long-term debt						4,862						5,031
Noncurrent
Operating			Long-term operating lease liabilities						14,290						15,925
Finance			Long-term debt(5)						18,688						20,890
Total lease liabilities									$	42,432					$	46,225

(1)     Operating lease assets are recorded net of accumulated amortization of $20.1 million at June 30, 2026 and $17.9 million at December 31, 2025.

(2)    Includes approximately $0.7 million and $0.8 million at June 30, 2026 and December 31, 2025, respectively, related to a below-market lease recognized as a result of the Industrial Air acquisition, which was recorded as an increase to the Company’s operating lease right-of-use assets on its condensed consolidated balance sheet. The below-market lease will be amortized to amortization expense over the remaining lease term.

(3)    Finance lease vehicle assets are recorded net of accumulated amortization of $9.5 million at June 30, 2026 and $8.2 million at December 31, 2025.

(4)    Includes approximately $2.2 million of net property assets associated with the Company’s Pontiac Facility at both June 30, 2026 and December 31, 2025.

(5)    Includes approximately $5.4 million associated with the Company’s sale and leaseback financing transaction at both June 30, 2026 and December 31, 2025. See Note 6 – Debt for further detail.

The following table summarizes the lease costs included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025:

									Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)			Classification on the Condensed Consolidated Statement of Operations						2026						2025						2026						2025
Operating lease cost			Cost of revenue(1)						$	813					$	911					$	1,613					$	1,769
Operating lease cost			Selling, general and administrative(1)						603						419						1,204						866
Finance lease cost
Amortization			Cost of revenue(2)						1,387						1,042						2,811						1,971
Interest			Interest expense, net(2)						246						196						507						372
Total lease cost									$	3,049					$	2,568					$	6,135					$	4,978

(1)    Operating lease costs recorded in cost of revenue included $0.2 million of variable lease costs for both the three months ended June 30, 2026 and 2025, respectively, and $0.3 million for both the six months ended June 30, 2026 and 2025, respectively. In addition, $0.1 million of variable lease costs are included in selling, general and administrative for both the three months ended June 30, 2026 and 2025, and $0.2 million for both the six months ended June 30, 2026 and 2025. These variable costs consist of the Company’s proportionate share of operating expenses, real estate taxes and utilities.

(2)     Finance lease costs recorded in cost of revenue includes variable lease costs of $1.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $2.0 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges.

The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s condensed consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of June 30, 2026 were as follows (in thousands):

Year ending:						Vehicles						Pontiac Facility						Total Finance Lease Obligations																		Operating Lease Obligations						Sublease Receipts(1)
Remainder of 2026						$	2,893					$	272					$	3,165																	$	2,853					$	572
2027						5,209						555						5,764																		5,051						495
2028						4,529						569						5,098																		4,233						14
2029						4,697						583						5,280																		3,537						—
2030						2,715						597						3,312																		2,255						—
Thereafter						50						12,552						12,602																		3,985						—
Total minimum lease payments						20,093						15,128						35,221																		21,914						$	1,081
Financing Component (2)						(1,894)						(9,777)						(11,671)																		(3,032)
Net present value of minimum lease payments						18,199						5,351						23,550																		18,882
Less: current portion of finance and operating lease obligations						(4,862)						—						(4,862)																		(4,592)
Long-term finance and operating lease obligations						$	13,337					$	5,351					$	18,688																	$	14,290

(1)    Primarily associated with the aforementioned third-party sublease agreement.

(2)    The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

The following is a summary of the lease terms and discount rates as of:

			June 30, 2026						December 31, 2025
Weighted average lease term (in years):
Operating			5.12						5.43
Finance (1)			3.57						3.95
Weighted average discount rate:
Operating			6.19		%				6.18		%
Finance (1)			5.36		%				5.41		%

(1)     Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 6 – Debt for further detail.

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

						Six Months Ended June 30,
(in thousands)						2026						2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	2,723					$	2,611
Operating cash flows from finance leases						450						345
Financing cash flows from finance leases						2,501						1,767
Right-of-use assets exchanged for lease liabilities:
Operating leases						710						1,676
Finance leases						177						7,933
Right-of-use assets disposed or adjusted modifying finance leases liabilities						20						—

X

- References

No definition available.

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- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/842-20/tableOfContent

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- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/842-20/tableOfContent

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