Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

The Company determines if an arrangement is a lease at its inception. Operating leases are included in “Operating lease right-of-use assets,” “Other current liabilities,” and “Long-term operating lease liabilities” within the Consolidated Balance Sheets. Finance leases are included in “Property, plant, and equipment - net,” “Current maturities of long-term debt,” and “Long-term debt” in the Consolidated Balance Sheets.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases

do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit rate when readily determinable. The operating lease right-of-use asset also includes indirect costs incurred and lease payments made prior to the commencement date, less any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components that it accounts for as a single lease component. Also, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities.

The Company has operating and finance leases for manufacturing facilities, corporate offices, sales offices, vehicles, and certain equipment. As of December 31, 2023, its leases had remaining lease terms of 2 to 12 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year.

The balance sheet components of the leases were as follows as of December 31, 2023 and 2022:

	December 31, 2023		December 31, 2022
Operating leases
Operating lease right-of-use assets	$	14,905	$	17,291
Other current liabilities	$	3,040	$	3,128
Long-term operating lease liabilities	11,865		14,163
Total operating lease liabilities	$	14,905	$	17,291
Finance leases
Property, plant, and equipment	$	1,317	$	1,442
Accumulated amortization	(1,104)		(1,130)
Property, plant, and equipment - net	$	213	$	312
Current maturities of long-term debt	$	102	$	127
Long-term debt	111		185
Total finance lease liabilities	$	213	$	312

The components of lease expense within the Consolidated Statements of Operations were as follows for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
Finance lease cost:
Amortization of finance leases	$	186	$	177
Interest on lease liabilities	58		34
Operating lease cost	3,448		2,891
Sublease income	(200)		(200)
Total lease cost	$	3,492	$	2,902

The cash flow components of the leases were as follows for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(4,113)	$	(3,440)
Financing cash flows from finance leases	(214)		(164)
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	404	$	5,257

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows for the periods presented:

	December 31,
	2023		2022
Operating lease weighted-average remaining lease term	6		7
Operating lease weighted-average discount rate	5.2	%	5.2	%
Finance lease weighted-average remaining lease term	2		2
Finance lease weighted-average discount rate	3.6	%	3.7	%

As of December 31, 2023, estimated annual maturities of lease liabilities for the year ending December 31, 2024 and thereafter were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2024	$	4,082	$	37
2025	3,719		136
2026	3,175		76
2027	2,949		5
2028	2,145		—
2029 and thereafter	5,345		—
	21,415		254
Interest	(6,510)		(41)
Total	$	14,905	$	213

Leases

Leases

The Company determines if an arrangement is a lease at its inception. Operating leases are included in “Operating lease right-of-use assets,” “Other current liabilities,” and “Long-term operating lease liabilities” within the Consolidated Balance Sheets. Finance leases are included in “Property, plant, and equipment - net,” “Current maturities of long-term debt,” and “Long-term debt” in the Consolidated Balance Sheets.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases

do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit rate when readily determinable. The operating lease right-of-use asset also includes indirect costs incurred and lease payments made prior to the commencement date, less any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and will be recognized when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components that it accounts for as a single lease component. Also, for certain equipment leases, the Company applies a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities.

The Company has operating and finance leases for manufacturing facilities, corporate offices, sales offices, vehicles, and certain equipment. As of December 31, 2023, its leases had remaining lease terms of 2 to 12 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 year.

The balance sheet components of the leases were as follows as of December 31, 2023 and 2022:

	December 31, 2023		December 31, 2022
Operating leases
Operating lease right-of-use assets	$	14,905	$	17,291
Other current liabilities	$	3,040	$	3,128
Long-term operating lease liabilities	11,865		14,163
Total operating lease liabilities	$	14,905	$	17,291
Finance leases
Property, plant, and equipment	$	1,317	$	1,442
Accumulated amortization	(1,104)		(1,130)
Property, plant, and equipment - net	$	213	$	312
Current maturities of long-term debt	$	102	$	127
Long-term debt	111		185
Total finance lease liabilities	$	213	$	312

The components of lease expense within the Consolidated Statements of Operations were as follows for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
Finance lease cost:
Amortization of finance leases	$	186	$	177
Interest on lease liabilities	58		34
Operating lease cost	3,448		2,891
Sublease income	(200)		(200)
Total lease cost	$	3,492	$	2,902

The cash flow components of the leases were as follows for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(4,113)	$	(3,440)
Financing cash flows from finance leases	(214)		(164)
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	404	$	5,257

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows for the periods presented:

	December 31,
	2023		2022
Operating lease weighted-average remaining lease term	6		7
Operating lease weighted-average discount rate	5.2	%	5.2	%
Finance lease weighted-average remaining lease term	2		2
Finance lease weighted-average discount rate	3.6	%	3.7	%

As of December 31, 2023, estimated annual maturities of lease liabilities for the year ending December 31, 2024 and thereafter were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2024	$	4,082	$	37
2025	3,719		136
2026	3,175		76
2027	2,949		5
2028	2,145		—
2029 and thereafter	5,345		—
	21,415		254
Interest	(6,510)		(41)
Total	$	14,905	$	213