Leases

12 Months Ended

Dec. 31, 2025

We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At December 31, 2025, our operating leases had remaining lease terms of up to 35 years, including any reasonably probable extensions.

Lease balances within our consolidated balance sheets were as follows:


(In thousands)	December 31, 2025		December 31, 2024
Assets:
Operating lease right-of-use assets	$	10,203	$	14,322
Liabilities:
Other accrued liabilities	$	3,213	$	3,553
Long-term operating lease obligations	6,193		9,232
Total lease liabilities	$	9,406	$	12,785

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


	Year Ended December 31,
(In thousands)	2025		2024		2023
Cost of sales	$	1,312	$	2,390	$	3,012
Selling, general and administrative expenses	5,954		5,017		4,378
Total operating lease expense	$	7,266	$	7,407	$	7,390

Operating lease expenses from variable and short-term lease costs	$	1,401	$	1,146	$	1,033
Operating cash outflows from operating leases	$	6,002	$	8,152	$	7,736
Operating lease right-of-use assets obtained in exchange for lease obligations	$	4,806	$	1,249	$	4,360

As part of our continued evaluation of our global manufacturing footprint and our overall cost optimization and return to profitability strategy, we ceased production activities and shut down our manufacturing facility in Mexico and vacated and abandoned our office space in Carlsbad, California. As a result of these actions, we reassessed our Mexico factory lease and recorded a decrease of $0.7 million and $0.8 million to our Mexico operating lease ROU asset and lease liability, respectively, during the year ended December 31, 2025. In addition, the estimated useful lives of the Mexico and Carlsbad related ROU assets were revised to reflect shorter lease terms than those originally estimated at lease inception. A change in the estimated useful life of a long-lived asset represents a change in accounting estimate and is accounted for prospectively. The Mexico

ROU asset was fully amortized by December 31, 2025. The Carlsbad ROU asset was fully amortized by December 31, 2025 and we recognized accelerated amortization of $1.3 million during the year ended December 31, 2025.

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


	Year Ended December 31,
	2025		2024
Weighted average lease liability term (in years)	4.3		4.6
Weighted average discount rate	5.80	%	5.45	%

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, 2025. The reconciliation excludes short-term leases that are not recorded on the balance sheet.


(In thousands)
2026	$	3,519
2027	2,958
2028	1,201
2029	584
2030	487
Thereafter	1,661
Total lease payments	10,410
Less: imputed interest	(1,004)
Total lease liabilities	$	9,406

At December 31, 2025, 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, 2025. 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, 2025, and is being amortized on a straight-line basis over the remaining term of approximately 33 years. The buildings located on this land had a net book value of $10.6 million at December 31, 2025 and are being depreciated over a remaining weighted average period of approximately 14 years.