LEASES

12 Months Ended

Dec. 31, 2025

We lease certain retail stores, warehouses, distribution centers, office spaces and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We account for lease components including rent, real estate taxes and insurance costs separately from non-lease components, like common-area maintenance fees. Most of our leases include one or more options to renew, with renewal terms that can extend the lease term for one or more years. The exercise of the lease option to renew is solely at our discretion.

Operating lease costs were approximately $5.3 million and $5.4 million for the years ended December 31, 2025 and 2024, respectively. Short-term lease costs were approximately $0.4 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively. Operating lease costs were offset by sublease income of $0.3 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively. Short-term lease costs represent our costs with respect to leases with a duration of 12 months or less and are not reflected on our Consolidated Balance Sheets.

Information related to the Company’s operating right-of-use assets and related operating lease liabilities were as follows (dollar amounts in thousands, except lease term and discount rate):


As of December 31,	2025		2024
Assets:
Operating lease right-of-use assets	$	17,600	$	12,799

Liabilities:
Current	3,270		3,927
Long-term	15,630		10,277
Total operating lease liabilities	$	18,900	$	14,204


Weighted-average remaining lease term	6.7		3.7
Weighted-average discount rate	5.85	%	5.01	%


Year Ended December 31,	2025		2024
Cash paid for operating lease liabilities	$	5,382	$	5,671
Right-of-use assets obtained in exchange for new operating lease obligations	9,365		5,181
Cancellations or adjustments of leases that resulted in the reduction of lease assets in exchange for lease liabilities	$	(166)	$	(103)

There were no material operating leases that we have entered into and that were yet to commence as of December 31, 2025.

The approximate aggregate commitments under non-cancelable operating leases in effect at December 31, 2025, were as follows (dollar amounts in thousands):


Year Ending December 31,
2026	$	3,963
2027	4,307
2028	3,229
2029	2,149
2030	1,395
Thereafter	8,196
Total lease payments	$	23,239
Less: Imputed interest (1)	4,339
Present value of lease liabilities	$	18,900

(1) Calculated using our corporate borrowing rate based on the term of each lease ranging from 3.00 percent to 6.96 percent.