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Leases

6 Months Ended

Jun. 30, 2024

Note 10. Leases

We have operating leases for manufacturing, production, administrative, distribution and warehousing facilities, vehicles and machinery and equipment. Some of our lease agreements have renewal options, tenant improvement allowances, rent holidays and rent escalation clauses. The remaining terms on our leases range from 1 year to 15 years, some of which may include options to extend the leases and some of which may include options to terminate the leases within 1 year.

The following table summarizes the amount of right-of-use lease assets and lease liabilities included in each respective line item on the Company’s Condensed Consolidated Balance Sheets:


(Thousands)	Balance Sheet Location	June 30, 2024		December 31, 2023
Right-of-use operating lease assets	Operating lease right-of-use assets	$	62,643	$	67,601
Operating lease liabilities - current	Accrued expenses and other current liabilities		4,531		4,809
Operating lease liabilities - noncurrent	Operating lease liabilities		59,287		63,554

During the six months ended June 30, 2024 and 2023, the Company obtained approximately $1.0 million and $6.0 million of right-of-use operating lease assets in exchange for lease obligations.

On February 12, 2024, following the completion of its 530,000 square foot distribution center in Conway, Arkansas, the Company entered into a lease termination agreement for the Gregory Distribution Center lease. The Gregory Distribution Center lease terminated, by mutual agreement, on June 30, 2024. No costs were incurred as a result of the lease termination. This lease termination event does not significantly alter the Company’s operational capabilities or its financial position.

Depending on the nature of the lease, lease costs are classified within costs of sales or selling, general and administrative expense on the Company’s Condensed Consolidated Statements of Operations. The components of lease costs for the three and six months ended June 30, 2024 and 2023, respectively, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Thousands)	2024		2023		2024		2023
Operating lease cost	$	2,772	$	1,209	$	5,564	$	2,430
Short-term lease cost		228		239		461		479
Total	$	3,000	$	1,448	$	6,025	$	2,909

The following table presents information about the Company’s weighted average discount rate and remaining lease term as of June 30, 2024 and December 31, 2023:

Supplemental cash flow information about the Company’s leases as of June 30, 2024 and 2023, respectively, is as follows:


	Six Months Ended June 30,
(Thousands)	2024		2023
Cash paid related to operating lease liabilities	$	4,981	$	2,141

Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued expenses and other current liabilities and long-term debt, net on the Condensed Consolidated Balance Sheets. There were no material finance leases as of June 30, 2024.

Future minimum lease payments under non-cancellable operating leases as of June 30, 2024 are as follows:


(Thousands)
Remainder of 2024	$	4,528
2025		8,207
2026		7,672
2027		7,714
2028		7,173
Thereafter		68,641
Total future minimum lease payments		103,935
Less: imputed interest		(40,117)
Present value of minimum lease payments	$	63,818

June 30, 2024

December 31, 2023

Weighted-average discount rate

Weighted-average remaining lease term