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Leases

3 Months Ended

Sep. 30, 2025

Note (7) - Leases:

Company as Lessee

As of September 30, 2025, the Company had 35 facilities, consisting of warehouse facilities and administrative offices, financed under operating leases with lease term expirations between 2025 and 2031. 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 three months ended September 30, 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 September 30, 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)
2026 (remainder of)	$	3,382
2027		3,902
2028		2,870
2029		2,179
2030		1,916
Thereafter		1,035
Total minimum lease payments		15,284
Less: amounts representing interest		1,338
Present value of minimum lease payments		13,946
Less: current portion		3,909
Long-term portion	$	10,037

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

	Three months ended September 30,
	2025		2024
Operating lease cost
Operating lease cost (1)	$	1,133	$	956
Variable lease cost (2)		1,363		1,783
Total lease cost	$	2,496	$	2,739

(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 consolidated statements of operations.

The table below presents lease-related terms and discount rates as of September 30, 2025:

		September 30, 2025
Weighted average remaining lease terms
Operating leases		4.15 years
Weighted average discount rate
Operating leases		4.16 %

The table below presents supplemental cash flow information related to the Company’s long-term operating lease liabilities for the three months ended September 30, 2025 and 2024 (in thousands):

	Three months ended September 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:	$	1,133	$	956
Operating lease right-of-use assets obtained in exchange for operating lease liabilities:	$	2,642	$	1,364

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
2026 (remainder of)	$	4,064	$	2,585	$	1,479
2027		4,274		2,754		1,520
2028		3,262		1,921		1,341
2029		2,307		1,212		1,095
2030		1,420		712		708
Thereafter		1,653		760		893
					$	7,036	*

* Excludes residual values of $2.8 million.

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