v3.25.1
Leases (Tables)
 3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Schedule of Supplemental Balance Sheets Information
The following table summarizes the lease amounts included in the Company's condensed consolidated balance sheets:
(in thousands)Classification on the Condensed Consolidated Balance SheetsMarch 31, 2025December 31, 2024
Assets
Operating
Operating lease right-of-use assets(1)(2)
$20,516 $21,539 
Finance
Property and equipment, net(3)(4)
14,119 13,966 
Total lease assets$34,635 $35,505 
Liabilities
Current
   OperatingCurrent operating lease liabilities$4,192 $4,093 
   FinanceCurrent portion of long-term debt3,419 3,314 
Noncurrent
   OperatingLong-term operating lease liabilities16,682 17,766 
   Finance
Long-term debt(5)
14,058 13,925 
Total lease liabilities$38,351 $39,098 
(1)     Operating lease assets are recorded net of accumulated amortization of $14.8 million at March 31, 2025 and $14.1 million at December 31, 2024.
(2)    Includes approximately $0.9 million at both March 31, 2025 and December 31, 2024, respectively, related to a below-market lease recognized as a result of the Industrial Air Transaction, which was recorded as an increase to the Company’s operating lease right-of-use assets on its condensed consolidated balance sheet. The below-market lease will be amortized to amortization expense over the remaining lease term.
(3)    Finance lease vehicle assets are recorded net of accumulated amortization of $5.7 million at March 31, 2025 and $5.0 million at December 31, 2024.
(4)    Includes approximately $2.4 million of net property assets associated with the Company's Pontiac Facility at both March 31, 2025 and December 31, 2024, respectively.
(5)    Includes approximately $5.4 million associated with the Company's sale and leaseback financing transaction at both March 31, 2025 and December 31, 2024. See Note 6 for further detail.
Schedule of Lease Costs, Lease Terms and Discount Rates
The following table summarizes the lease costs included in the Company's condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:
Three Months Ended
March 31,
(in thousands)Classification on the Condensed Consolidated Statement of Operations20252024
Operating lease cost
Cost of revenue(1)
$858 $588 
Operating lease cost
Selling, general and administrative(1)
447 726 
Finance lease cost
   Amortization
Cost of revenue(2)
929 740 
   Interest
Interest expense, net(2)
176 119 
Total lease cost$2,410 $2,173 
(1)    Operating lease costs recorded in cost of revenue included $0.1 million of variable lease costs for both the three months ended March 31, 2025 and 2024. In addition, $0.1 million of variable lease costs are included in selling, general and administrative for both the three months ended March 31, 2025 and 2024, respectively. These variable costs consist of the Company's proportionate share of operating expenses, real estate taxes and utilities.
(2)     Finance lease costs recorded in cost of revenue include variable lease costs of $1.1 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively. These variable lease costs consist of fuel, maintenance, and sales tax charges.
The following is a summary of the lease terms and discount rates as of:
March 31, 2025December 31, 2024
Weighted average lease term (in years):
   Operating5.735.90
   Finance (1)
3.793.84
Weighted average discount rate:
   Operating6.02 %6.02 %
   Finance (1)
5.99 %6.06 %
(1)     Excludes the weighted average lease term and weighted average discount rate associated with the aforementioned sale-leaseback financing transaction, which has a Primary Term of 25 years and utilized an implicit rate of 11.11%. See Note 6 for further detail.
Schedule of Future Minimum Commitment for Finance Leases
The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s condensed consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of March 31, 2025 were as follows (in thousands):
Finance Lease ObligationsOperating Lease Obligations
Year ending:VehiclesPontiac FacilityTotal FinanceNon-Related Party
Related Party(1)
Total Operating
Sublease Receipts(2)
Remainder of 2025$3,045 $397 $3,442 $3,395 $574 $3,969 $818 
20263,562 542 4,104 4,609 770 5,379 1,132 
20272,670 555 3,225 3,451 871 4,322 495 
20281,974 569 2,543 2,498 871 3,369 14 
20292,154 583 2,737 1,799 876 2,675 — 
Thereafter191 13,149 13,340 753 4,121 4,874 — 
Total minimum lease payments13,596 15,795 29,391 16,505 8,083 24,588 $2,459 
Financing Component (3)
(1,470)(10,444)(11,914)(1,986)(1,728)(3,714)
Net present value of minimum lease payments12,126 5,351 17,477 14,519 6,355 20,874 
Less: current portion of finance and operating lease obligations(3,419)— (3,419)(3,752)(440)(4,192)
Long-term finance and operating lease obligations$8,707 $5,351 $14,058 $10,767 $5,915 $16,682 
(1)    Associated with the aforementioned related party leases entered into with former members of JMLLC and Industrial Air.
(2)    Associated with the aforementioned third party sublease agreement.
(3)     The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.
Schedule of Future Minimum Commitment for Operating Leases
The future undiscounted minimum finance lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s condensed consolidated balance sheets within current and long-term debt, less interest, and under current and long-term operating leases, less imputed interest, as of March 31, 2025 were as follows (in thousands):
Finance Lease ObligationsOperating Lease Obligations
Year ending:VehiclesPontiac FacilityTotal FinanceNon-Related Party
Related Party(1)
Total Operating
Sublease Receipts(2)
Remainder of 2025$3,045 $397 $3,442 $3,395 $574 $3,969 $818 
20263,562 542 4,104 4,609 770 5,379 1,132 
20272,670 555 3,225 3,451 871 4,322 495 
20281,974 569 2,543 2,498 871 3,369 14 
20292,154 583 2,737 1,799 876 2,675 — 
Thereafter191 13,149 13,340 753 4,121 4,874 — 
Total minimum lease payments13,596 15,795 29,391 16,505 8,083 24,588 $2,459 
Financing Component (3)
(1,470)(10,444)(11,914)(1,986)(1,728)(3,714)
Net present value of minimum lease payments12,126 5,351 17,477 14,519 6,355 20,874 
Less: current portion of finance and operating lease obligations(3,419)— (3,419)(3,752)(440)(4,192)
Long-term finance and operating lease obligations$8,707 $5,351 $14,058 $10,767 $5,915 $16,682 
(1)    Associated with the aforementioned related party leases entered into with former members of JMLLC and Industrial Air.
(2)    Associated with the aforementioned third party sublease agreement.
(3)     The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.
Schedule of Leases Supplemental Cash Flow Information
The following is a summary of other information and supplemental cash flow information related to finance and operating leases:
Three months ended March 31,
(in thousands)20252024
Cash paid for amounts included in the measurement of lease liabilities:
   Operating cash flows from operating leases$1,296 $1,250 
   Operating cash flows from finance leases163 121 
   Financing cash flows from finance leases851 695 
Right-of-use assets exchanged for lease liabilities:
   Operating leases— 2,097 
   Finance leases1,318 308 
Right-of-use assets disposed or adjusted modifying finance leases liabilities— (41)