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Leases

9 Months Ended

Mar. 31, 2025

Note (7) - Leases:

Company as Lessee

As of March 31, 2025, the Company had 34 facilities, consisting of warehouse facilities and administrative offices, financed under operating leases with lease term expirations between 2025 and 2030. Operating lease cost consists of monthly rental payments under the terms of the Company’s lease agreements recognized on a straight-line basis. Short-term lease costs were not material during the nine or three months ended March 31, 2025 or 2024.

The following table provides details of the Company’s future minimum lease payments under operating lease liabilities recorded on the Company’s condensed consolidated balance sheet as of March 31, 2025. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.

Fiscal years ending June 30,	Total Operating Lease Obligations (in thousands)
2025 (remainder of)	$	1,008
2026		3,722
2027		2,417
2028		1,370
2029		739
Thereafter		819
Total minimum lease payments		10,075
Less: amounts representing interest		725
Present value of minimum lease payments		9,350
Less: current portion		3,546
Long-term portion	$	5,804

The table below presents additional information related to the Company’s operating leases (in thousands):

	Nine months ended March 31,				Three months ended March 31,
	2025		2024		2025		2024
Operating lease cost
Operating lease cost (1)	$	2,914	$	3,012	$	993	$	976
Variable lease cost (2)		3,565		3,460		1,101		1,242
Total lease cost	$	6,479	$	6,472	$	2,094	$	2,218

(1)

Expenses are classified as selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

(2)

Certain of the Company’s subsidiaries lease space at locations where (i) they install laundry equipment and customers pay for the use of equipment and (ii) the leased space is paid for as part of a revenue sharing arrangement. These expenses are classified within cost of sales in the Company’s condensed consolidated statements of operations.

The table below presents lease-related terms and discount rates as of March 31, 2025:

		March 31, 2025
Weighted average remaining lease terms
Operating leases		3.28 years
Weighted average discount rate
Operating leases		3.88 %

The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the nine months ended March 31, 2025 and 2024 (in thousands):

	Nine months ended March 31,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:	$	2,914	$	3,012
Operating lease right-of-use assets obtained in exchange for operating lease liabilities:	$	2,835	$	2,903

Company as Lessor

The Company derives a portion of its revenue from equipment leasing arrangements. Such arrangements provide for monthly payments covering the equipment provided, maintenance, and interest. These arrangements meet the criteria to be accounted for as sales type leases. Accordingly, revenue from the provision of the equipment is recognized upon delivery of the equipment and its acceptance by the customer. Upon the recognition of such revenue, an asset is established for the investment in sales type leases. Maintenance revenue and interest are recognized monthly over the lease term.

The future minimum lease payments receivable for sales type leases are as follows (in thousands):

Fiscal years ending June 30,	Total Minimum Lease Payments Receivable		Amortization of Unearned Income		Net Investment in Sales Type Leases
2025 (remainder of)	$	1,440	$	917	$	523
2026		4,857		3,150		1,707
2027		3,831		2,378		1,453
2028		2,808		1,571		1,237
2029		1,843		914		929
Thereafter		2,164		1,033		1,131
					$	6,980	*

* Excludes residual values of $2.8 million.

The total net investments in sales type leases, including stated residual values, as of March 31, 2025 and June 30, 2024 was $9.8 million and $9.7 million, respectively. The current portion of $1.8 million and $1.7 million is included in other current assets in the condensed consolidated balance sheets as of March 31, 2025 and June 30, 2024, respectively, and the long term portion of $8.0 million is included in other assets in the condensed consolidated balance sheets as of both March 31, 2025 and June 30, 2024.