| LEASES |
NOTE 9 – LEASES
The Company has operating
leases for office space, warehouses, and certain equipment, primarily automobiles. Many leases include one or more options to
renew, some of which include options to extend the leases for up to 10 years. In certain of the Company’s lease agreements,
the rental payments are adjusted periodically to reflect inflation and/or changes in other indexes.
Lease Costs
| |
|
Years ended
December 31, |
|
| (dollars in thousands) |
|
2025 |
|
|
2024 |
|
| Components of total lease costs: |
|
|
|
|
|
|
| Operating lease expense |
|
$ |
1,446 |
|
|
$ |
1,017 |
|
| Common area maintenance expense |
|
|
381 |
|
|
|
551 |
|
| Short-term lease costs (1) |
|
|
130 |
|
|
|
828 |
|
| Total lease costs |
|
$ |
1,957 |
|
|
$ |
2,396 |
|
| (1) | Represents short-term leases with an initial term of 12 months or less, which are immaterial. |
Lease Positions as of December 31, 2025 and
2024
ROU lease assets are recorded
in Other assets, the current portion of lease liabilities for our operating leases are recorded in Accrued expenses and other liabilities,
and the long-term portion of our lease liabilities for our operating leases are recorded in Other long-term liabilities on the Consolidated
Balance Sheets as follows:
| |
|
December 31, |
|
| (dollars in thousands) |
|
2025 |
|
|
2024 |
|
| Assets: |
|
|
|
|
|
|
| Operating lease assets |
|
$ |
10,365 |
|
|
$ |
3,922 |
|
| Total lease assets |
|
$ |
10,365 |
|
|
$ |
3,922 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
| Operating lease liabilities, current |
|
$ |
3,076 |
|
|
$ |
1,122 |
|
| Operating lease liabilities, net of current |
|
|
9,645 |
|
|
|
4,962 |
|
| Total lease liabilities |
|
$ |
12,721 |
|
|
$ |
6,084 |
|
Other Leases Information
| |
| Years ended
December 31, |
|
| (dollars in thousands) |
| 2025 |
|
| 2024 |
|
| Operating cash flows for operating leases |
| $ |
2,038 |
|
| $ |
1,047 |
|
| |
| |
|
|
| |
|
|
| Weighted average remaining lease term (in years) – operating lease |
| |
5.61 |
|
| |
4.50 |
|
| Weighted average discount rate – operating lease |
| |
6.57 |
% |
| |
9.20 |
% |
Undiscounted Leases Cash Flows
Future lease payments included
in the measurement of lease liabilities on the Consolidated Balance Sheets as of December 31, 2025, for the following five years and thereafter
as follows (in thousands):
|
(dollars in thousands) Years ending December 31,(1)
|
|
|
|
| 2026 |
|
$ |
3,732 |
|
| 2027 |
|
|
3,584 |
|
| 2028 |
|
|
3,502 |
|
| 2029 |
|
|
2,418 |
|
| 2030 |
|
|
630 |
|
| Thereafter |
|
|
2,321 |
|
| Total future minimum lease payments |
|
$ |
16,187 |
|
| Lease imputed interest |
|
|
(3,466 |
) |
| Total |
|
$ |
12,721 |
|
| (1) |
Remaining non-cancellable sublease proceeds for the years
ending December 31, 2026 - 2028, and 2029 of $495 thousand and $144 thousand, respectively, are not included in the table above. |
|