Leases

12 Months Ended

Dec. 31, 2024

We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At December 31, 2024, our operating leases had remaining lease terms of up to 36 years, including any reasonably probable extensions.

Lease balances within our consolidated balance sheets were as follows:


(In thousands)	December 31, 2024		December 31, 2023
Assets:
Operating lease right-of-use assets	$	14,322	$	18,693
Liabilities:
Other accrued liabilities	$	3,553	$	4,813
Long-term operating lease obligations	9,232		12,560
Total lease liabilities	$	12,785	$	17,373

We entered into lease amendments for our southwestern PRC and Mexico factories during the year ended December 31, 2023 as a part of our manufacturing footprint optimization efforts. As a result of these modifications, our operating lease right-of-use assets decreased by $1.2 million and our total lease liabilities decreased by $1.3 million.

Operating lease expense, operating lease cash flows and supplemental cash flow information were as follows:


	Year Ended December 31,
(In thousands)	2024		2023		2022
Cost of sales	$	2,390	$	3,012	$	2,822
Selling, general and administrative expenses	5,017		4,378		4,474
Total operating lease expense	$	7,407	$	7,390	$	7,296

Operating lease expenses from variable and short-term lease costs	$	1,146	$	1,033	$	632
Operating cash outflows from operating leases	$	8,152	$	7,736	$	7,427
Operating lease right-of-use assets obtained in exchange for lease obligations	$	1,249	$	4,360	$	8,756

The weighted average remaining lease liability term and the weighted average discount rate were as follows:


	Year Ended December 31,
	2024		2023
Weighted average lease liability term (in years)	4.6		4.9
Weighted average discount rate	5.45	%	5.04	%

The following table reconciles the undiscounted cash flows for each of the first five years and thereafter to the operating lease liabilities recognized in our consolidated balance sheet at December 31, 2024. The reconciliation excludes short-term leases that are not recorded on the balance sheet.


(In thousands)
2025	$	4,100
2026	3,744
2027	2,999
2028	1,349
2029	594
Thereafter	1,829
Total lease payments	14,615
Less: imputed interest	(1,830)
Total lease liabilities	$	12,785

At December 31, 2024, we did not have any operating leases that had not yet commenced.

Prepaid Land Lease

We operate one factory within the PRC on which the land is leased from the government as of December 31, 2024. This land lease was prepaid to the PRC government at the time our subsidiary occupied the land. We have obtained a land-use right certificate for the land pertaining to this factory.

The factory is located in the city of Yangzhou in the Jiangsu province. The remaining net book value of this operating lease ROU asset was $2.1 million at December 31, 2024, and is being amortized on a straight-line basis over the remaining term of approximately 34 years. The buildings located on this land had a net book value of $11.2 million at December 31, 2024 and are being depreciated over a remaining weighted average period of approximately 15 years.