Leases - Madison Industries IAQ Solutions Corporation

3 Months Ended

Mar. 31, 2026

Lessee, Lease, Description [Line Items]

Leases

Leases

The Company leases manufacturing, warehouse and office facilities as well as manufacturing and office equipment under leases that expire at various dates through 2038. The facility leases generally provide that the Company is responsible for taxes, utilities, maintenance, and insurance.

The weighted-average remaining lease term for operating leases was 6.1 and 6.1 years and the weighted-average discount rate was 6.1% and 6.3% at March 31, 2026 and December 31, 2025, respectively. The weighted-average remaining lease term for finance leases was 3.1 and 3.1 years and the weighted-average discount rate was 5.4% and 5.4% at March 31, 2026 and December 31, 2025, respectively.

Supplemental balance sheet information related to leases is as follows:

Operating Leases	Financial Statement Line Item on the Condensed Consolidated Balance Sheets (Unaudited)	March 31, 2026		December 31, 2025
ROU assets, net	Other long-term assets	$	135.7	$	106.8
Current lease liabilities	Accrued expenses and other current liabilities	22.1		19.9
Long-term lease liabilities	Other long-term liabilities	120.2		92.2
Total operating lease liabilities		$	142.3	$	112.1

Finance Leases	Financial Statement Line Item on the Condensed Consolidated Balance Sheets (Unaudited)	March 31, 2026		December 31, 2025
ROU assets, net	Property, plant and equipment, net	$	6.1	$	5.6
Current lease liabilities	Current maturities of long-term debt	2.3		2.1
Long-term lease liabilities	Long-term debt	3.9		3.6
Total finance lease liabilities		$	6.2	$	5.7

The Company recorded lease expense as either cost of goods sold or selling, general, and administrative expenses within its consolidated statements of income (loss), depending upon the nature and use of the ROU assets. The Company records finance lease expense as depreciation expense within cost of goods sold or selling, general, and administrative expenses, depending upon the nature and use of the ROU assets, and as interest expense in its consolidated statements of income (loss).

The components of lease expense were as follows:

	Three months ended March 31,
	2026		2025
Operating lease expense	$	8.1	$	6.4
Finance lease expense
Depreciation of ROU assets	0.6		0.5
Interest on lease liabilities	0.1		—
Total lease expense	$	8.8	$	6.9

The following table presents supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities:

	Three months ended March 31,
	2026		2025
Operating cash flow from operating leases	$	7.2	$	6.3
ROU assets obtained in exchange for new operating lease liabilities	35.9		1.3
Operating cash flows from finance leases	0.1		0.1
Financing cash flows for finance leases	0.6		0.5
ROU assets obtained in exchange for new finance lease liabilities	1.2		0.3

In March 2026, the Company entered into a lease agreement for a production facility. The lease has an initial term of 7 years, commencing on March 20, 2026, with options to extend for two additional periods of 5 years each. Total minimum lease payments over the noncancelable term are approximately $37.7. The lease is classified as an operating lease under ASC 842. In connection with the lease, the Company recognized a right of use asset of $30.1 and a corresponding lease liability of $30.1 on its condensed consolidated balance sheet.

Leases

Leases

The Company leases manufacturing, warehouse and office facilities as well as manufacturing and office equipment under leases that expire at various dates through 2038. The facility leases generally provide that the Company is responsible for taxes, utilities, maintenance, and insurance.

The weighted-average remaining lease term for operating leases was 6.1 and 6.1 years and the weighted-average discount rate was 6.1% and 6.3% at March 31, 2026 and December 31, 2025, respectively. The weighted-average remaining lease term for finance leases was 3.1 and 3.1 years and the weighted-average discount rate was 5.4% and 5.4% at March 31, 2026 and December 31, 2025, respectively.

Supplemental balance sheet information related to leases is as follows:

Operating Leases	Financial Statement Line Item on the Condensed Consolidated Balance Sheets (Unaudited)	March 31, 2026		December 31, 2025
ROU assets, net	Other long-term assets	$	135.7	$	106.8
Current lease liabilities	Accrued expenses and other current liabilities	22.1		19.9
Long-term lease liabilities	Other long-term liabilities	120.2		92.2
Total operating lease liabilities		$	142.3	$	112.1

Finance Leases	Financial Statement Line Item on the Condensed Consolidated Balance Sheets (Unaudited)	March 31, 2026		December 31, 2025
ROU assets, net	Property, plant and equipment, net	$	6.1	$	5.6
Current lease liabilities	Current maturities of long-term debt	2.3		2.1
Long-term lease liabilities	Long-term debt	3.9		3.6
Total finance lease liabilities		$	6.2	$	5.7

The Company recorded lease expense as either cost of goods sold or selling, general, and administrative expenses within its consolidated statements of income (loss), depending upon the nature and use of the ROU assets. The Company records finance lease expense as depreciation expense within cost of goods sold or selling, general, and administrative expenses, depending upon the nature and use of the ROU assets, and as interest expense in its consolidated statements of income (loss).

The components of lease expense were as follows:

	Three months ended March 31,
	2026		2025
Operating lease expense	$	8.1	$	6.4
Finance lease expense
Depreciation of ROU assets	0.6		0.5
Interest on lease liabilities	0.1		—
Total lease expense	$	8.8	$	6.9

The following table presents supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities:

	Three months ended March 31,
	2026		2025
Operating cash flow from operating leases	$	7.2	$	6.3
ROU assets obtained in exchange for new operating lease liabilities	35.9		1.3
Operating cash flows from finance leases	0.1		0.1
Financing cash flows for finance leases	0.6		0.5
ROU assets obtained in exchange for new finance lease liabilities	1.2		0.3

In March 2026, the Company entered into a lease agreement for a production facility. The lease has an initial term of 7 years, commencing on March 20, 2026, with options to extend for two additional periods of 5 years each. Total minimum lease payments over the noncancelable term are approximately $37.7. The lease is classified as an operating lease under ASC 842. In connection with the lease, the Company recognized a right of use asset of $30.1 and a corresponding lease liability of $30.1 on its condensed consolidated balance sheet.