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Leases

9 Months Ended

Sep. 30, 2025

Note 5 - Leases

The Company has various lease agreements with terms up to 11 years, including leases of buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. common area maintenance, charges, utilities and property taxes). The Company elected the package of practical expedients permitted under the transition guidance, which allows it to carry forward its historical lease classification, its assessment on whether a contract contains a lease, and its initial direct costs for any leases that existed prior to the adoption of the new standard. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated income statements on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value, guarantees or material restrictive covenants.

Operating leases are included in Right of use asset, Accrued expenses and other current liabilities, and Long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

Operating lease expense of $1.5 million and $1.4 million, for the nine-month ended September 30, 2025 and 2024, respectively, is included in Selling, general and administrative expenses on the consolidated statements of income.

The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of September 30, 2025.


	September 30,
Maturity of Lease Payments	2025
(in thousands)	(unaudited)
2025 (remaining)	$	740
-2026		2,346
-2027		1,865
-2028		652
-2029		547
-Thereafter		276
Total undiscounted operating lease payments		6,426
Less imputed interest		(888)
Present value of operating lease liabilities	$	5,538

Balance Sheet Classification


	September 30,		December 31,
	2025		2024
(in thousands)	(unaudited)
Current lease liabilities (recorded in Accrued expenses and other current liabilities)	$	2,050	$	1,961
Long-term lease liabilities		3,488		4,917
Total operating lease liabilities	$	5,538	$	6,878

Other Information


	September 30,		December 31,
	2025		2024
Weighted-average remaining term for operating leases	2.35	years	2.87	years
Weighted-average discount rate for operating leases	8.46	%	8.45	%

Supplemental cash flow and non-cash information related to leases


	September 30,		December 31,
	2025		2024
(in thousands)	(unaudited)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flow from operating leases	$	1,470	$	1,918
Right-of-use assets obtained in exchange for new operating lease liabilities	$	130	$	2,113