LEASES

12 Months Ended

Dec. 31, 2024

The Company leases real properties for use in manufacturing and as administrative and sales offices, and leases automobiles and office equipment. The Company determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Company is the lessee, leases are classified as either finance or operating. Right-of-use (“ROU”) assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the implicit rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term within the Consolidated Statements of Operations. Lease and non-lease components within the Company’s lease agreements are accounted for together. Variable lease payments are recognized in the period in which the obligation is incurred. The Company has no leases in which the Company is the lessor.

Nearly all of the Company’s leasing arrangements are classified as operating leases. ROU asset and lease liability balances were as follows for the periods presented:


	December 31, 2024		December 31, 2023
ROU asset	$	42,164	$	45,409

Current lease liability	8,297		7,652
Long-term lease liability	37,150		39,744
Total lease liability	$	45,447	$	47,396

The ROU asset is reported in “Other assets” while the current lease liability is reported in “Other current liabilities” and the long-term lease liability is reported in “Other long-term liabilities” in the Company’s Consolidated Balance Sheets. Cash paid for operating lease liabilities is recorded as operating cash outflows in the Company’s Consolidated Statements of Cash Flows.

Arcadia Products leases certain office, manufacturing, distribution and warehouse facilities from entities affiliated with the redeemable noncontrolling interest holder and president of Arcadia Products as of February 3, 2025. There were eight such leases in effect as of December 31, 2024, with expiration dates ranging from calendar years 2025 to 2031, inclusive of the assumed exercise of renewal options. As of December 31, 2024, the total ROU asset and related lease liability recognized for these leases was $21,788 and $22,880, respectively. During the years ended December 31, 2024 and 2023, associated lease expense was $4,625 in each period and is included in total operating lease expense.

Total operating lease expense included in the Company’s Consolidated Statements of Operations was $13,678, $12,822 and $11,883 for the years ended December 31, 2024, 2023, and 2022, respectively. Short term and variable lease costs were not significant for any period presented.

Certain of the Company’s leases contain renewal options and options to extend the lease term for up to five years, and a majority of these options are reflected in the calculation of the ROU assets and related lease liability due to the likelihood of renewal.

The following table summarizes the weighted average lease terms and discount rates for operating lease liabilities:


	December 31, 2024		December 31, 2023
Weighted average remaining lease term	8.7 years		7.0 years
Weighted average discount rate	5.4	%	4.5	%

The following table represents maturities of operating lease liabilities as of December 31, 2024:


Due within 1 year	$	10,302
Due after 1 year through 2 years	9,078
Due after 2 years through 3 years	8,207
Due after 3 years through 4 years	6,494
Due after 4 years through 5 years	4,280
Thereafter	22,613
Total future minimum lease payments	60,974
Less imputed interest	(15,527)
Total	$	45,447