Leases are classified as either finance leases or operating leases based on criteria in Accounting Standard Codification (ASC) 842. The Company has finance leases for its vehicle and equipment leases and operating leases for its real estate space and office equipment leases. The Company’s operating and finance leases generally have original lease terms between 1 year and 15 years, and in some instances include one or more options to renew. The Company includes options to extend the lease term in the initial measurement of leases if the options are reasonably certain of being exercised. The Company currently considers some of its renewal options to be reasonably certain to be exercised. Some leases also include early termination options, which can be exercised under specific conditions. The Company does not have material residual value guarantees or restrictive covenants associated with its leases.

Finance and operating lease right-of-use (ROU) assets represent the right to use an underlying asset for the lease term, and finance and operating lease liabilities represent the obligation to make lease payments arising from the lease.

The Company calculates the present value of its finance and operating leases using an estimated incremental borrowing rate (IBR), which requires judgment. For real estate operating leases, the Company estimates the IBR based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. For all other leases, the Company estimates the IBR based on the stated interest rate on the contract. Since many of the inputs used to calculate the rate implicit in the leases are not readily determinable from the lessee’s perspective, the Company does not use the implicit interest rate.

Certain leases contain variable payments, these payments are expensed as incurred and not included in the Company’s operating lease ROU assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance and are excluded from the present value of the Company’s lease obligations.

The Company does not record operating lease ROU assets or operating lease liabilities for leases with an initial term of 12 months or less. The Company also combines lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets.

When a lease is terminated before the expiration of the lease term, irrespective of whether the lease is classified as a finance lease or an operating lease, the lessee would derecognize the ROU asset and corresponding lease liability. Any difference would be recognized as a gain or loss related to the termination of the lease. Similarly, if a lessee is required to make any payments or receives any consideration when terminating the lease, it would include such amounts in the determination of the gain or loss upon termination.

Equipment Line of Credit—In May 2024, the Company entered into a $15.0 million equipment leasing facility for the purchase of equipment and related freight, installation costs and taxes paid. Any unused capacity on this equipment leasing facility will expire on February 25, 2026. Interest on leases financed under this facility is based on the SOFR swap rate on or closest to the closing date. Equipment leased through this line of credit met the finance lease criteria as per ASC 842 and accordingly is accounted for as finance lease right-of-use assets and finance lease liabilities.

The components of lease expense were as follows:


		For the Three Months Ended September 30,
	Statement of Operations Location	2025		2024
Operating lease cost
Lease cost	Selling, general and administrative expense	$	3,064	$	3,319
Variable lease cost	Selling, general and administrative expense		695		651
Total operating lease cost		$	3,759	$	3,970

Finance lease cost
Amortization of ROU assets	Depreciation and amortization	$	2,394	$	1,496
Interest on lease liabilities	Interest expense, net		348		26
Total finance lease cost		$	2,742	$	1,522
Total lease cost		$	6,501	$	5,492

		For the Nine Months Ended September 30,
	Statement of Operations Location	2025		2024
Operating lease cost
Lease cost	Selling, general and administrative expense	$	9,299	$	10,421
Variable lease cost	Selling, general and administrative expense		2,285		1,687
Total operating lease cost		$	11,584	$	12,108

Finance lease cost
Amortization of ROU assets	Depreciation and amortization	$	6,353	$	4,068
Interest on lease liabilities	Interest expense, net		925		425
Total finance lease cost		$	7,278	$	4,493
Total lease cost		$	18,862	$	16,601

Supplemental cash flows information related to leases was as follows:


	For the Nine Months Ended September 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	10,357	$	9,748
Operating cash flows used for interest related to finance leases		878		425
Financing cash flows used in finance leases		4,697		4,384

Lease liabilities arising from new ROU assets:
Operating leases		4,726		14,676
Finance leases		7,143		5,806

Weighted average remaining lease terms and weighted average discount rates were:


	September 30, 2025
	Operating Leases			Finance Leases
Weighted average remaining lease term (years)		4.2			3.3
Weighted average discount rate		5.0	%		6.7	%

	September 30, 2024
	Operating Leases			Finance Leases
Weighted average remaining lease term (years)		4.4			3.5
Weighted average discount rate		4.6	%		6.6	%

The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year:


	Operating Leases			Finance Leases
Remainder of 2025	$	3,266		$	1,913
2026		11,591			6,827
2027		8,972			5,439
2028		7,311			3,752
2029		5,485			2,319
2030 and thereafter		4,942			256
Total undiscounted future minimum lease payments	$	41,567		$	20,506
Less imputed interest		(4,281	)		(2,076	)
Total discounted future minimum lease payments	$	37,286		$	18,430