Leases

12 Months Ended

Dec. 31, 2023

The Company has operating leases with fixed and variable payment terms primarily associated with buildings and warehouses. The Company's leases have remaining lease terms of twelve months to forty-five months, some of which include options to extend the lease for five years. Operating leases are included in right-of-use ("ROU") assets, other accrued liabilities and other non-current liabilities on the Consolidated Balance Sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

The Company used the applicable incremental borrowing rate at lease inception date to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads

commensurate with the Company’s secured borrowing rate. At each reporting period when there is a new lease initiated, the Company will utilize the rate implicit in the lease if readily determinable and if not readily determinable, then the Company will utilize the incremental borrowing rate to perform lease classification tests on lease components and to measure ROU assets and lease liabilities.

The following table provides information related to the components of lease expense as of December 31 (in thousands):


	2023		2022
Operating lease cost	$	2,073	$	1,715
Short-term lease cost	1,922		1,549
Total net lease cost	$	3,995	$	3,264

The following table provides information related to other supplemental balance sheet information related to operating leases as of December 31, (in thousands):


	2023		2022
Operating lease:
Operating lease right of use assets	$	3,802	$	5,114
Total operating lease right of use assets	$	3,802	$	5,114

Current operating lease liabilities (A)	$	1,981	$	1,626
Noncurrent operating lease liabilities (B)	1,828		3,516
Total operating lease liabilities	$	3,809	$	5,142

(A) Current operating lease liability included in "Other Current Accrued Liabilities" on the Consolidated Balance Sheets.

(B) Noncurrent operating lease liability included in "Other Non-Current Liabilities" on the Consolidated Balance Sheets.


	2023		2022
Weighted average remaining lease term (in years):	2.4		3.6

Weighted average discount rate:	5.5	%	4.1	%

For the years ended December 31, 2023 and 2022, cash payments on amounts included in the measurement of lease liabilities were $2,117,000 and $1,640,000, respectively. During the year ended December 31, 2023, the Company terminated a lease for the secondary warehouse in Monterrey, Mexico. As a result, the Company wrote off approximately $1,548,000 and $1,660,000 of lease assets and lease liabilities, respectively, related to this lease. The Company then entered into a new lease related to the secondary warehouse in Monterrey, Mexico, which resulted in right of use assets obtained in exchange for new operating lease liabilities of $641,000. The Company also entered into a new lease related to a warehouse in Matamoros, Mexico, which resulted in additional right of use assets obtained in exchange for new operating lease liabilities of $1,172,000. During the year ended December 31, 2022, there were $1,099,000 right of use assets obtained in exchange for new operating lease liabilities.

As of December 31, 2023, maturities of lease liabilities were as follows (in thousands):


	Operating Leases
2024	$	2,137
2025	1,122
2026	594
2027	189

Total lease payments	4,042
Less: imputed interest	(233)
Total lease obligations	3,809
Less: current obligations	(1,981)
Long-term lease obligations	$	1,828