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Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Leases

The Company leases certain office and operating facilities, machinery, equipment, and vehicles. Concurrent with the adoption of ASC 842, the Company recognized a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term for each lease agreement. The Company elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less and will continue to recognize lease expense for these leases on a straight-line basis over the lease term. The Company has leases with both lease components and non-lease components, such as common area maintenance, utilities, or other repairs and maintenance. For all asset classes, the Company decided to utilize the practical expedient to include both fixed lease components and fixed non-lease components in calculating the ROU asset and lease liability. The Company identified variable lease payments, such as maintenance payments based on actual activities performed or costs incurred, at lease commencement by assessing the nature of the payment provisions, including whether the payments are subject to a minimum charge. Many of the Company's leases include one or more options to renew. When it is reasonably certain that the Company will exercise the option, the Company will include the impact of the option in the lease term for purposes of determining future lease payments. As the Company is unable to determine the discount rate implicit in its lease agreements, the Company uses its incremental borrowing rate on the commencement date to calculate the present value of future payments.

The Company’s Consolidated Balance Sheets include the following related to operating leases as of December 31, 2024 and 2023 (in thousands):

Leases						Classification						2024						2023
Assets:
ROU assets						Other Assets						$	40,401					$	37,512
Liabilities:
ROU liability - current						Accrued expenses and other current liabilities						$	11,375					$	10,686
ROU liability - long-term						Other long-term liabilities						30,279						28,219
Total ROU liabilities												$	41,654					$	38,905

Included within the balance of operating leases is a lease for the Company’s headquarters which is with a related party. The ROU liability for this facility is approximately $1.8 million as of December 31, 2024 and $0.8 million as of December 31, 2023. Total rent payments for this facility were approximately $1.0 million and $1.0 million during the years ended December 31, 2024 and 2023. An agreement was reached with the related party to reduce rental payments by 12.5% for the lease of the Company’s headquarters, effective February 2022 as part of a voluntary reduction.

As of December 31, 2024 and 2023, the total ROU assets attributable to finance leases are approximately $17.9 million and $14.5 million, respectively, which is included in Property, plant, and equipment, net on the Consolidated Balance Sheets.

The components of lease costs for the year ended December 31, 2024 and 2023 are as follows (in thousands):

						Classification						2024						2023
Finance lease expense:
Amortization of ROU assets						Depreciation and amortization						$	5,491					$	5,152
Interest on lease liabilities						Interest expense						1,062						917
Operating lease expense						Cost of revenue; Selling, general & administrative expenses						14,213						13,234
Short-term lease expense						Cost of revenue; Selling, general & administrative expenses						56						179
Variable lease expense						Cost of revenue; Selling, general & administrative expenses						1,683						2,034
Total												$	22,505					$	21,516

Additional information related to leases as of December 31, 2024 and 2023 is as follows:

						2024						2023
Cash paid for amounts included in the measurement of lease liabilities for finance and operating leases (in thousands):
Finance - financing cash flows						$	5,495					$	5,047
Finance - operating cash flows						1,062						917
Operating - operating cash flows						14,243						13,208
ROU assets obtained in the exchange for lease liabilities:
Finance leases						$	9,899					$	7,125
Operating leases						16,254						10,598
Weighted-average remaining lease term (in years):
Finance leases						5.0						4.7
Operating leases						4.7						4.4
Weighted-average discount rate:
Finance leases						6.5		%				6.5		%
Operating leases						6.1		%				6.1		%

Maturities of lease liabilities as of December 31, 2024 is as follows (in thousands):

			Finance						Operating
2025			$	6,402					$	13,462
2026			5,772						10,880
2027			4,846						8,256
2028			3,178						6,097
2029			1,701						3,498
Thereafter			1,374						5,692
Total			23,273						47,885
Less: Present value discount			2,794						6,231
Lease liability			$	20,479					$	41,654

Leases

Leases

The Company leases certain office and operating facilities, machinery, equipment, and vehicles. Concurrent with the adoption of ASC 842, the Company recognized a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term for each lease agreement. The Company elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less and will continue to recognize lease expense for these leases on a straight-line basis over the lease term. The Company has leases with both lease components and non-lease components, such as common area maintenance, utilities, or other repairs and maintenance. For all asset classes, the Company decided to utilize the practical expedient to include both fixed lease components and fixed non-lease components in calculating the ROU asset and lease liability. The Company identified variable lease payments, such as maintenance payments based on actual activities performed or costs incurred, at lease commencement by assessing the nature of the payment provisions, including whether the payments are subject to a minimum charge. Many of the Company's leases include one or more options to renew. When it is reasonably certain that the Company will exercise the option, the Company will include the impact of the option in the lease term for purposes of determining future lease payments. As the Company is unable to determine the discount rate implicit in its lease agreements, the Company uses its incremental borrowing rate on the commencement date to calculate the present value of future payments.

The Company’s Consolidated Balance Sheets include the following related to operating leases as of December 31, 2024 and 2023 (in thousands):

Leases						Classification						2024						2023
Assets:
ROU assets						Other Assets						$	40,401					$	37,512
Liabilities:
ROU liability - current						Accrued expenses and other current liabilities						$	11,375					$	10,686
ROU liability - long-term						Other long-term liabilities						30,279						28,219
Total ROU liabilities												$	41,654					$	38,905

Included within the balance of operating leases is a lease for the Company’s headquarters which is with a related party. The ROU liability for this facility is approximately $1.8 million as of December 31, 2024 and $0.8 million as of December 31, 2023. Total rent payments for this facility were approximately $1.0 million and $1.0 million during the years ended December 31, 2024 and 2023. An agreement was reached with the related party to reduce rental payments by 12.5% for the lease of the Company’s headquarters, effective February 2022 as part of a voluntary reduction.

As of December 31, 2024 and 2023, the total ROU assets attributable to finance leases are approximately $17.9 million and $14.5 million, respectively, which is included in Property, plant, and equipment, net on the Consolidated Balance Sheets.

The components of lease costs for the year ended December 31, 2024 and 2023 are as follows (in thousands):

						Classification						2024						2023
Finance lease expense:
Amortization of ROU assets						Depreciation and amortization						$	5,491					$	5,152
Interest on lease liabilities						Interest expense						1,062						917
Operating lease expense						Cost of revenue; Selling, general & administrative expenses						14,213						13,234
Short-term lease expense						Cost of revenue; Selling, general & administrative expenses						56						179
Variable lease expense						Cost of revenue; Selling, general & administrative expenses						1,683						2,034
Total												$	22,505					$	21,516

Additional information related to leases as of December 31, 2024 and 2023 is as follows:

						2024						2023
Cash paid for amounts included in the measurement of lease liabilities for finance and operating leases (in thousands):
Finance - financing cash flows						$	5,495					$	5,047
Finance - operating cash flows						1,062						917
Operating - operating cash flows						14,243						13,208
ROU assets obtained in the exchange for lease liabilities:
Finance leases						$	9,899					$	7,125
Operating leases						16,254						10,598
Weighted-average remaining lease term (in years):
Finance leases						5.0						4.7
Operating leases						4.7						4.4
Weighted-average discount rate:
Finance leases						6.5		%				6.5		%
Operating leases						6.1		%				6.1		%

Maturities of lease liabilities as of December 31, 2024 is as follows (in thousands):

			Finance						Operating
2025			$	6,402					$	13,462
2026			5,772						10,880
2027			4,846						8,256
2028			3,178						6,097
2029			1,701						3,498
Thereafter			1,374						5,692
Total			23,273						47,885
Less: Present value discount			2,794						6,231
Lease liability			$	20,479					$	41,654

X

- References

No definition available.

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- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/842-20/tableOfContent

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X

- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 842
-SubTopic 20
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/842-20/tableOfContent

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