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Note 8 - Leases

12 Months Ended

Dec. 31, 2024

8.	*Leases*:

The Company leases warehouses and office space, industrial equipment, office equipment, vehicles, industrial gas tanks and forklifts from other parties. The Company determines if a contract contains a lease when the contract conveys the right to control the use of identified assets for a period of time in exchange for consideration. Upon identification and commencement of a lease, the Company establishes a right-of-use (ROU) asset and a lease liability. Operating leases are included in ROU assets, current portion of lease liabilities, and lease liabilities on the accompanying Consolidated Balance Sheets. Financing leases are included in property and equipment, other accrued liabilities and other long-term liabilities.

The Company has remaining lease terms ranging from one year to 16 years, some of these include options to renew the lease for up to five years. The total lease term is determined by considering the initial term per the lease agreement, which is adjusted to include any renewal options that the Company is reasonably certain to exercise as well as any period that the Company has control over the space before the stated initial term of the agreement. If the Company determines a reasonable certainty of exercising termination or early buyout options, then the lease terms are adjusted to account for these facts.

The Company leases one warehouse from a related party. The Company’s Executive Chairman of the Board owns 50% of an entity that owns one of the Cleveland warehouses and leases it to the Company at a fair market value annual rental of $0.2 million. The lease expires on December 31, 2028 with two five-year renewal options.

ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Lease expense is recognized on a straight-line basis over the lease term.

The components of lease expense were as follows for the years ended December 31, 2024, 2023 and 2022:

(in thousands)	*2024*		*2023*		*2022*
Operating lease cost	$	8,106	$	9,008	$	7,446
Finance lease cost
Amortization		992		1,056		720
Interest on lease liabilities		156		157		67
	$	1,148	$	1,213	$	787

Supplemental cash flow information related to leases was as follows for the years ended December 31, 2024, 2023 and 2022:

(in thousands)	*2024*		*2023*		*2022*

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,705	$	8,901	$	7,268
Operating cash flows from finance leases		156		157		67
Financing cash flows from finance leases		990		1,039		703
Total cash paid for amounts included in the measurement of lease liabilities	$	8,851	$	10,097	$	8,038

Supplemental balance sheet information related to leases was as follows:

(in thousands)	*2024*			*2023*

Operating leases
Operating lease	$	54,337		$	56,117
Operating lease accumulated amortization		(17,401	)		(21,737	)
Operating lease right of use asset, net	$	36,936		$	34,380

Operating lease current liabilities		5,865			7,813
Operating lease liabilities		31,945			27,261
	$	37,810		$	35,074

(in thousands)	*2024*			*2023*
Finance leases
Finance lease	$	4,812		$	5,686
Finance lease accumulated depreciation		(2,354	)		(2,615	)
Finance lease right of use asset, net	$	2,458		$	3,071

Finance lease current liabilities		853			1,087
Finance lease liabilities		1,697			2,106
	$	2,550		$	3,193

Weighted average remaining lease term (in years)	*2024*			*2023*
Operating leases		9			6
Finance leases		4			4

Weighted average discount rate
Operating leases		5.76	%		4.07	%
Finance leases		5.89	%		5.06	%

Maturities of lease liabilities were as follows:

(in thousands)	*Operating Lease*			*Finance Lease*
Year Ending December 31,
2025	$	7,859		$	976
2026		7,441			713
2027		6,191			600
2028		4,984			427
2029		3,904			97
Thereafter		20,718			8
Total future minimum lease payments	$	51,097		$	2,821
Less remaining imputed interest		(13,287	)		(271	)
Total	$	37,810		$	2,550