Note 7 - Leases

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

7. Leases

The Company has operating leases for manufacturing and upfit facilities, land and parking lots, warehousing space and certain equipment. The leases have remaining lease terms of less than one year to 14 years, some of which include options to extend the leases for up to 20 years. Such renewal options were not included in the determination of the lease term unless deemed reasonably certain of exercise. The discount rate used in measuring the lease liabilities is based on the Company’s interest rate on the term loan facility under its secured Agreement. Certain of the Company’s leases contain escalating rental payments based on an index. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In September 2024, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold seven properties with a combined net book value of $21,852 for gross proceeds of $64,150, which was reduced by transaction costs of $5,494 for net cash proceeds of approximately $58,656. The properties in the sale leaseback transaction are comprised of three facilities located in Milwaukee, Wisconsin and four additional facilities located in each of Huntley, Illinois; Manchester, Iowa; Rockland, Maine; and Madison Heights, Michigan, totaling approximately 780,000 square feet of manufacturing and upfitting space. The lease agreement has an initial term of 15 years, with two optional 10-year renewal options. The Company recognized a gain of $42,298 on this transaction, which is included in Gain on sale leaseback transaction in the Consolidated Statements of Operations and Comprehensive Income in the three and nine months ended  September 30, 2024. Right-of-use assets and lease liabilities recognized related to this sale leaseback transaction were $51,879 and $51,879, respectively. 

Lease Expense

The components of lease expense, which are included in Cost of sales and Selling, general and administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income, were as follows:

	Three Months Ended September 30, 2025		Nine Months Ended September 30, 2025		Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
Operating lease expense	$	3,252	$	9,795	$	2,126	$	5,303
Short term lease cost	$	190	$	469	$	341	$	494
Total lease cost	$	3,442	$	10,264	$	2,467	$	5,797

Cash Flow

Supplemental cash flow information related to leases is as follows:

	Nine Months Ended September 30, 2025		Nine Months Ended September 30, 2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	9,102	$	5,243
Non-cash lease expense - right-of-use assets	$	6,228	$	4,264
Right-of-use assets obtained in exchange for operating lease obligations	$	522	$	55,551

Balance Sheet

Supplemental balance sheet information related to leases is as follows:  

	September 30, 2025			December 31, 2024
Operating Leases
Operating lease right-of-use assets	$	68,529		$	70,801
Other current liabilities		7,023			7,394
Operating lease liabilities		59,480			64,785
Total operating lease liabilities	$	66,503		$	72,179
Weighted Average Remaining Lease Term
Operating leases (in months)		148			151
Weighted Average Discount Rate
Operating leases		7.12	%		7.05	%

Lease Maturities

Maturities of leases were as follows:

Year ending December 31,	Operating Leases
2025 (excluding the nine months ended September 30, 2025)	$	3,021
2026		10,804
2027		8,937
2028		7,823
2029		7,103
Thereafter		63,864
Total Lease Payments		101,552
Less: imputed interest		(35,049	)
Total	$	66,503