Leases

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Leases

Leases

Rockwell leases its production facilities and administrative offices as well as certain equipment used in its operations including leases on transportation equipment used in the delivery of its products. The lease terms range from monthly to six years. Rockwell occupies a 51,000 square foot facility and a 17,500-square foot facility in Wixom, Michigan under a lease expiring in August 2027. During the nine months ended September 30, 2024, the lease for the Wixom facilities was extended by three years to August 2027, which was accounted for as a modification. As a result of the modification, the operating lease right of use asset and lease liabilities increased by $1.5 million. Rockwell also occupies two other manufacturing facilities, a 51,000-square foot facility in Grapevine, Texas under a lease expiring in December 2025, and a 57,000-square foot facility in Greer, South Carolina under a lease expiring February 2026. In addition, Rockwell occupied 4,100 square feet of office space in Hackensack, New Jersey. This lease was subleased on December 15, 2021 and expired on October 31, 2024.

The following summarizes quantitative information about the Company’s operating and finance leases (table in thousands):

	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023			Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Operating Leases
Operating Lease Cost	$	418		$	422		$	1,179		$	1,281
Variable Lease Cost	126			112			376			336
Operating Lease Expense	544			534			1,555			1,617
Finance Leases
Amortization of Right-of-use Assets	139			142			421			424
Interest on Lease Obligations	28			36			89			113
Finance Lease Expense	167			178			510			537
Short-term Lease Rent Expense	5			4			16			12
Total Rent Expense	$	716		$	716		$	2,081		$	2,166
Other Information
Operating Cash Flows from Operating Leases	$	449		$	461		$	1,312		$	1,363
Operating Cash Flows from Finance Leases	$	28		$	37		$	89		$	114
Financing Cash Flows from Finance Leases	$	140		$	130		$	416		$	388
Weighted-average Remaining Lease Term – Operating Leases	2.6			2.5			2.6			2.5
Weighted-average Remaining Lease Term – Finance Leases	2.7			3.7			2.7			3.7
Weighted-average Discount Rate – Operating Leases	6.3		%	6.5		%	6.3		%	6.5		%
Weighted-average Discount Rate – Finance Leases	6.4		%	6.4		%	6.4		%	6.4		%

Future minimum rental payments under operating and finance lease agreements are as follows (in thousands):

	Operating		Finance
Year ending December 31, 2024 (remaining)	$	441	$	167
Year ending December 31, 2025	1,716		676
Year ending December 31, 2026	1,075		666
Year ending December 31, 2027	655		311
Year ending December 31, 2028	57		—
Total	3,944		1,820
Less Present Value Discount	(292)		(148)
Operating and Finance Lease Liabilities	$	3,652	$	1,672

Leases

Leases

Rockwell leases its production facilities and administrative offices as well as certain equipment used in its operations including leases on transportation equipment used in the delivery of its products. The lease terms range from monthly to six years. Rockwell occupies a 51,000 square foot facility and a 17,500-square foot facility in Wixom, Michigan under a lease expiring in August 2027. During the nine months ended September 30, 2024, the lease for the Wixom facilities was extended by three years to August 2027, which was accounted for as a modification. As a result of the modification, the operating lease right of use asset and lease liabilities increased by $1.5 million. Rockwell also occupies two other manufacturing facilities, a 51,000-square foot facility in Grapevine, Texas under a lease expiring in December 2025, and a 57,000-square foot facility in Greer, South Carolina under a lease expiring February 2026. In addition, Rockwell occupied 4,100 square feet of office space in Hackensack, New Jersey. This lease was subleased on December 15, 2021 and expired on October 31, 2024.

The following summarizes quantitative information about the Company’s operating and finance leases (table in thousands):

	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023			Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Operating Leases
Operating Lease Cost	$	418		$	422		$	1,179		$	1,281
Variable Lease Cost	126			112			376			336
Operating Lease Expense	544			534			1,555			1,617
Finance Leases
Amortization of Right-of-use Assets	139			142			421			424
Interest on Lease Obligations	28			36			89			113
Finance Lease Expense	167			178			510			537
Short-term Lease Rent Expense	5			4			16			12
Total Rent Expense	$	716		$	716		$	2,081		$	2,166
Other Information
Operating Cash Flows from Operating Leases	$	449		$	461		$	1,312		$	1,363
Operating Cash Flows from Finance Leases	$	28		$	37		$	89		$	114
Financing Cash Flows from Finance Leases	$	140		$	130		$	416		$	388
Weighted-average Remaining Lease Term – Operating Leases	2.6			2.5			2.6			2.5
Weighted-average Remaining Lease Term – Finance Leases	2.7			3.7			2.7			3.7
Weighted-average Discount Rate – Operating Leases	6.3		%	6.5		%	6.3		%	6.5		%
Weighted-average Discount Rate – Finance Leases	6.4		%	6.4		%	6.4		%	6.4		%

Future minimum rental payments under operating and finance lease agreements are as follows (in thousands):

	Operating		Finance
Year ending December 31, 2024 (remaining)	$	441	$	167
Year ending December 31, 2025	1,716		676
Year ending December 31, 2026	1,075		666
Year ending December 31, 2027	655		311
Year ending December 31, 2028	57		—
Total	3,944		1,820
Less Present Value Discount	(292)		(148)
Operating and Finance Lease Liabilities	$	3,652	$	1,672