Leases

3 Months Ended

Mar. 31, 2026

The Company primarily leases manufacturing facilities, distribution centers, and office spaces with lease terms expiring through 2031. The Company recognized the following lease costs in the accompanying condensed consolidated statement of income:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Operating lease expense	$	3,492	$	3,046
Short-term lease expense	456		648
Variable lease expense	459		316
Total lease expense	$	4,407	$	4,010

For the three months ended March 31, 2026 and 2025, rent expense included in operating expenses was $3,590,000 and $3,190,000, respectively, and rent expense included in cost of goods sold was $817,000 and $820,000, respectively.

The following table presents supplemental information related to operating leases:


	March 31, 2026		December 31, 2025
Weighted average remaining lease term	3.24 years		3.47 years
Weighted average discount rate	7.0	%	6.9	%


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Right-of-use assets obtained in exchange for operating lease liabilities	$	—	$	10,457
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases	$	3,636	$	3,145

As of March 31, 2026, future lease payments under operating leases were as follows:


	(in thousands)
2026 (remainder)	$	10,959
2027	13,767
2028	12,915
2029	7,567
2030	715
Thereafter	53
Total lease payments	45,976
Less: imputed interest	(4,826)
Total lease liability balance	$	41,150

Global Wells has been the landlord under an operating lease agreement with an unrelated party since September 2020. On February 28, 2025, the lease agreement between Global Wells and the tenant was terminated and effective March 1, 2025, Global Wells entered into a new six-year operating lease agreement ending on February 28, 2031 with a different unrelated party that generates monthly rental payments from $87,000 to $101,000. The expected rental income is $846,000 for the remaining nine months of the year ending December 31, 2026, $1,128,000 per annum over the next four years, and $188,000 for the year ending December 31, 2031.