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Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Leases

The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of March 31, 2024, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.4 million, or 95% of the total lease liabilities on the consolidated balance sheet.

During the three months ended March 31, 2024, the Company did not enter into any new finance lease agreements.

Operating and finance lease amounts from continuing operations included in the unaudited condensed consolidated balance sheet are as follows (in thousands):

Classification						Financial Statement Line Item						March 31, 2024						December 31, 2023
Long-term Assets						Right-of-use assets, operating leases						$	27,431					$	27,784
Long-term Assets						Property, plant and equipment						1,457						1,543
Current liabilities						Current portion of lease liabilities, operating leases						1,170						1,140
Current liabilities						Current portion of lease liabilities, finance leases						288						292
Non-current liabilities						Non-current portion of lease liabilities, operating leases						29,419						29,729
Non-current liabilities						Non-current portion of lease liabilities, finance leases						1,236						1,307

Total Lease Cost

Individual components of the total lease cost incurred by the Company are as follows:

			Three Months Ended March 31,
(in thousands)			2024						2023
Operating lease cost1			$	989					$	989
Finance lease cost:
Amortization of right-of-use assets			83						78
Interest on finance lease liabilities			23						13
Sublease income			(92)						(91)
Total lease cost			$	1,003					$	989

1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statements of income (loss).

The Company currently subleases the former Palmer facility and records cash receipts related to the sublease in other expense (income) on the unaudited condensed consolidated statements of income (loss). Future expected cash receipts from the Company's sublease as of March 31, 2024 are as follows:

(in thousands)			Sublease Receipts
Remainder of 2024			$	278
2025			377
2026			385
2027			392
2028			400
Thereafter			3,386
Total sublease receipts			$	5,218

Maturity of Leases

The amounts of undiscounted future minimum lease payments under leases in continuing operations as of March 31, 2024 are as follows:

(in thousands)			Operating						Finance
Remainder of 2024			$	2,738					$	275
2025			3,671						361
2026			3,691						361
2027			3,765						361
2028			3,840						303
Thereafter			32,312						85
Total undiscounted minimum future lease payments			50,017						1,746
Imputed interest			(19,428)						(222)
Present value of lease liabilities			$	30,589					$	1,524

Lease Term and Discount Rate

Weighted-average remaining lease term			March 31, 2024						December 31, 2023
Operating leases			12.43 years						12.67 years
Finance leases			4.84 years						5.07 years
Weighted-average discount rate
Operating leases			8.33		%				8.33		%
Finance leases			5.92		%				5.92		%

Leases

Leases

The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of March 31, 2024, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.4 million, or 95% of the total lease liabilities on the consolidated balance sheet.

During the three months ended March 31, 2024, the Company did not enter into any new finance lease agreements.

Operating and finance lease amounts from continuing operations included in the unaudited condensed consolidated balance sheet are as follows (in thousands):

Classification						Financial Statement Line Item						March 31, 2024						December 31, 2023
Long-term Assets						Right-of-use assets, operating leases						$	27,431					$	27,784
Long-term Assets						Property, plant and equipment						1,457						1,543
Current liabilities						Current portion of lease liabilities, operating leases						1,170						1,140
Current liabilities						Current portion of lease liabilities, finance leases						288						292
Non-current liabilities						Non-current portion of lease liabilities, operating leases						29,419						29,729
Non-current liabilities						Non-current portion of lease liabilities, finance leases						1,236						1,307

Total Lease Cost

Individual components of the total lease cost incurred by the Company are as follows:

			Three Months Ended March 31,
(in thousands)			2024						2023
Operating lease cost1			$	989					$	989
Finance lease cost:
Amortization of right-of-use assets			83						78
Interest on finance lease liabilities			23						13
Sublease income			(92)						(91)
Total lease cost			$	1,003					$	989

1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statements of income (loss).

The Company currently subleases the former Palmer facility and records cash receipts related to the sublease in other expense (income) on the unaudited condensed consolidated statements of income (loss). Future expected cash receipts from the Company's sublease as of March 31, 2024 are as follows:

(in thousands)			Sublease Receipts
Remainder of 2024			$	278
2025			377
2026			385
2027			392
2028			400
Thereafter			3,386
Total sublease receipts			$	5,218

Maturity of Leases

The amounts of undiscounted future minimum lease payments under leases in continuing operations as of March 31, 2024 are as follows:

(in thousands)			Operating						Finance
Remainder of 2024			$	2,738					$	275
2025			3,671						361
2026			3,691						361
2027			3,765						361
2028			3,840						303
Thereafter			32,312						85
Total undiscounted minimum future lease payments			50,017						1,746
Imputed interest			(19,428)						(222)
Present value of lease liabilities			$	30,589					$	1,524

Lease Term and Discount Rate

Weighted-average remaining lease term			March 31, 2024						December 31, 2023
Operating leases			12.43 years						12.67 years
Finance leases			4.84 years						5.07 years
Weighted-average discount rate
Operating leases			8.33		%				8.33		%
Finance leases			5.92		%				5.92		%

Leases

Leases

The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of March 31, 2024, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.4 million, or 95% of the total lease liabilities on the consolidated balance sheet.

During the three months ended March 31, 2024, the Company did not enter into any new finance lease agreements.

Operating and finance lease amounts from continuing operations included in the unaudited condensed consolidated balance sheet are as follows (in thousands):

Classification						Financial Statement Line Item						March 31, 2024						December 31, 2023
Long-term Assets						Right-of-use assets, operating leases						$	27,431					$	27,784
Long-term Assets						Property, plant and equipment						1,457						1,543
Current liabilities						Current portion of lease liabilities, operating leases						1,170						1,140
Current liabilities						Current portion of lease liabilities, finance leases						288						292
Non-current liabilities						Non-current portion of lease liabilities, operating leases						29,419						29,729
Non-current liabilities						Non-current portion of lease liabilities, finance leases						1,236						1,307

Total Lease Cost

Individual components of the total lease cost incurred by the Company are as follows:

			Three Months Ended March 31,
(in thousands)			2024						2023
Operating lease cost1			$	989					$	989
Finance lease cost:
Amortization of right-of-use assets			83						78
Interest on finance lease liabilities			23						13
Sublease income			(92)						(91)
Total lease cost			$	1,003					$	989

1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statements of income (loss).

The Company currently subleases the former Palmer facility and records cash receipts related to the sublease in other expense (income) on the unaudited condensed consolidated statements of income (loss). Future expected cash receipts from the Company's sublease as of March 31, 2024 are as follows:

(in thousands)			Sublease Receipts
Remainder of 2024			$	278
2025			377
2026			385
2027			392
2028			400
Thereafter			3,386
Total sublease receipts			$	5,218

Maturity of Leases

The amounts of undiscounted future minimum lease payments under leases in continuing operations as of March 31, 2024 are as follows:

(in thousands)			Operating						Finance
Remainder of 2024			$	2,738					$	275
2025			3,671						361
2026			3,691						361
2027			3,765						361
2028			3,840						303
Thereafter			32,312						85
Total undiscounted minimum future lease payments			50,017						1,746
Imputed interest			(19,428)						(222)
Present value of lease liabilities			$	30,589					$	1,524

Lease Term and Discount Rate

Weighted-average remaining lease term			March 31, 2024						December 31, 2023
Operating leases			12.43 years						12.67 years
Finance leases			4.84 years						5.07 years
Weighted-average discount rate
Operating leases			8.33		%				8.33		%
Finance leases			5.92		%				5.92		%

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- References

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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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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
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-SubTopic 20
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-URI https://asc.fasb.org//842-20/tableOfContent

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The entire disclosure for sale leaseback transaction. Includes, but is not limited to, terms and conditions of transaction and gain (loss) from transaction.

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-Topic 840
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