Leases

12 Months Ended

Dec. 31, 2024

NOTE 11. LEASES

The Company leases vehicles, office space, warehouse space, and manufacturing equipment under operating and finance leases expiring in various years. In addition, the Company has generated sublease income for when the Company acts as lessor. Total lease expense was $18.1 million, $14.9 million and $10.6 million for the years ended December 31, 2024, 2023 and 2022 respectively.

The Company’s components of net lease cost for the years ended December 31, 2024, 2023 and 2022 is as follows:


	For the Twelve Months Ended December 31,
(in thousands)	2024		2023			2022
Finance lease – amortization of right of use assets	$	6,072	$	4,116		$	2,110
Finance lease – interest on lease liabilities		678		453			170
Operating lease cost		10,464		9,003			7,333
Variable lease cost		806		1,781			1,778
Short-term lease cost		120		100			52
Sublease income		—		(529	)		(874	)
Total	$	18,140	$	14,924		$	10,569

Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 is as follows:


	December 31, 2024			December 31, 2023
Weighted average remaining lease term:
Operating leases	6.50 years			6.27 years
Finance leases	2.12 years			2.24 years
Weighted average discount rate:
Operating leases		6.59	%		5.27	%
Finance leases		7.23	%		6.20	%

Supplemental cash flow information related to leases for the years ended December 31, 2024, 2023 and 2022 is as follows:


	For the Twelve Months Ended December 31,
(in thousands)	2024		2023		2022
Lease liabilities arising from obtaining right-of-use assets
Operating leases	$	31,563	$	13,138	$	6,431
Finance leases		6,373		6,369		6,003
Cash payments on leases
Operating cash flows from operating leases	$	10,615	$	8,251	$	8,088
Operating cash flows from finance leases		489		413		160
Financing cash flows from finance leases		5,698		3,865		2,272

Future minimum non-cancelable operating and finance leases mature as follows:


	Leases
(in thousands)	Finance			Operating			Total
2025	$	5,998		$	13,660		$	19,658
2026		3,706			11,885			15,591
2027		1,143			10,266			11,409
2028		330			8,615			8,945
2029		9			7,176			7,185
Thereafter		—			18,184			18,184
Subtotal		11,186			69,786			80,972
Less: amounts representing interest*		(841	)		(14,086	)		(14,927	)
Present value of payments	$	10,345		$	55,700		$	66,045

* Interest rates range from 2.08% - 13.09%.

The Company acts as a lessor where it leases rental tools to customers on a short-term basis. Rental tools are included within Property and equipment, net on the Consolidated Balance Sheets. Refer to Note 6. Property and Equipment for additional details. We recognize revenue from rental payments. Refer to Note 2. Summary of Significant Accounting Policies and Note 4. Revenue for additional details.