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Leases

12 Months Ended

Dec. 31, 2024

9. LEASES.

The Company leases equipment and land for certain of its facilities. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the years ended December 31, 2024 and 2023, the Company’s weighted-average discount rate was approximately 7.78%. Operating lease expense is recognized on a straight-line basis over the lease term.

Upon the adoption of ASC 842, the Company elected the following practical expedients allowable under the guidance: not to reassess whether any expired or existing contracts are or contain leases; not to reassess the lease classification for any expired or existing leases; not to reassess initial direct costs for any existing leases; not to separately identify lease and non-lease components; and not to evaluate historical land easements. Additionally, the Company elected the short-term lease exemption policy, applying the requirements of ASC 842 to only long-term (greater than 1 year) leases.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 1 year to 51 years, which includes options to extend the lease when it is reasonably certain the Company will exercise those options. For the year ended December 31, 2024, the weighted-average remaining lease terms of equipment and land-related leases were 4.14 years and 16.42 years, respectively. For the year ended December 31, 2023, the weighted-average remaining lease terms of equipment and land-related leases were 4.73 years and 15.41 years, respectively. The Company does not have lease arrangements with residual value guarantees, sale-leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements.

Leases consist of the following (in thousands):

	Classification	December 31,
Assets		2024		2023
Operating	Right of use operating lease assets, net	$	20,553	$	22,597
Liabilites
Operating - Current	Current portion, operating leases	$	4,851	$	4,333
Operating - Noncurrent	Operating leases, net of current portion	$	16,913	$	19,029

The Components of lease costs were as follows (in thousands):

	Years Ended December 31,
	2024		2023		2022

Fixed lease cost	$	5,989	$	5,722	$	5,224
Variable lease cost		529		871		124
Net lease cost	$	6,518	$	6,593	$	5,348

The following table summarizes the remaining maturities of the Company’s operating lease liabilities, assuming all land lease extensions are taken, as of December 31, 2024 (in thousands):

Year Ended:	Equipment			Land Related
2025	$	5,334		$	1,060
2026		4,761			1,037
2027		4,152			1,011
2028		3,368			1,024
2029		1,992			660
2030-76		119			3,881
Less interest		(3,299	)		(3,336	)
	$	16,427		$	5,337