Leases

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
	(in thousands)
Operating lease expense	$	3,519	$	3,470	$	10,261	$	10,056
Short-term lease expense	538		442		1,430		1,585
Variable lease expense	471		384		1,345		1,134
Total lease expense	$	4,528	$	4,296	$	13,036	$	12,775

For the three months ended September 30, 2026 and 2025, rent expense included in operating expenses was $3,719,000 and $3,580,000, respectively, and rent expense included in cost of goods sold was $809,000 and $716,000, respectively. For the nine months ended September 30, 2026 and 2025, rent expense included in operating expenses was $10,638,000 and $10,525,000, respectively, and rent expense included in cost of goods sold was $2,398,000 and $2,250,000, respectively.

The following table presents supplemental information related to operating leases:


	September 30, 2026		December 31, 2025
Weighted average remaining lease term	2.88 years		3.47 years
Weighted average discount rate	7.0	%	6.9	%


	Nine Months Ended September 30,
	2026		2025
	(in thousands)
Right-of-use assets obtained in exchange for operating lease liabilities	$	1,832	$	10,457
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases	$	10,831	$	9,960

As of September 30, 2026, future lease payments under operating leases were as follows:


	(in thousands)
2026 (remainder)	$	3,807
2027	14,024
2028	13,454
2029	8,122
2030	1,187
Thereafter	53
Total lease payments	40,647
Less: imputed interest	(3,794)
Total lease liability balance	$	36,853

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 $282,000 for the remaining three 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.