v3.25.1
LEASES
 3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
LEASES LEASES
The Company leases its distribution centers and manufacturing facilities from third parties under various non-cancelable lease agreements expiring at various dates through 2038. Also, the Company leases some property, plant and equipment under finance leases. Certain leases contain escalation provisions and/or renewal options, giving the Company the right to extend the leases by up to 20 years. However, these options are generally not reflected in the calculation of the right-of-use assets and lease liabilities due to uncertainty surrounding the likelihood of renewal. The Company recognizes operating lease costs over the respective lease periods, including short-term and month-to-month leases. The Company incurred operating lease costs of $2,384 and $2,750 during the three months ended March 31, 2025 and 2024, respectively. These costs are included primarily within SG&A in the condensed consolidated statements of operations and do not include lease termination costs associated with the Asset Sale. Refer to Note 3 – Restructuring and Asset Sales for further details.
The Company has operating subleases and logistics agreements which have been accounted for by reference to the underlying asset subject to the lease, primarily as an offset to rent expense, primarily within SG&A. For the three months ended March 31, 2025 and 2024, the Company recorded sublease and logistics income of $1,188 and $738, respectively.
Total right-of-use ("ROU") assets, finance lease assets, and lease liabilities were as follows:
Balance Sheet ClassificationMarch 31,
2025		December 31,
2024
Lease assets
Operating lease assetsOperating lease right-of-use assets$40,863 $42,869 
Finance lease assetsProperty, plant and equipment, net7,091 7,279 
Total lease assets$47,954 $50,148 
Lease liabilities
Current:
 Operating leasesCurrent portion of operating lease liabilities$7,785 $7,731 
 Finance leasesCurrent portion of finance lease liabilities467 459 
Noncurrent:
 Operating leasesLong-term operating lease liabilities35,629 37,553 
 Finance leasesLong-term finance lease liabilities7,711 7,830 
Total lease liabilities$51,592 $53,573 
The aggregate future minimum lease payments under long-term non-cancelable operating and finance leases with remaining terms greater than one year as of March 31, 2025 are as follows:
OperatingFinance
For the period of April 1, 2025 to December 31, 2025$7,137 $661 
Year ending December 31,
20268,693 847 
20278,781 850 
20288,243 805 
20295,374 822 
20304,240 838 
Thereafter6,643 6,379 
Total lease payments49,111 11,202 
Less portion representing interest(5,697)(3,024)
Total principal43,414 8,178 
Less current portion(7,785)(467)
Long-term portion$35,629 $7,711 
Subsequent event - Lease Renewal
In April 2025, Hydrofarm renewed the lease at its Edmonton, Canada peat moss harvesting facility. The lease has been extended by a term of seven years, through April 2033, with annual rent of $347 at the beginning of the renewal period, with annual fixed increases until the final year when annual rent is $419. The Company accounts for the lease as an operating lease.
LEASES LEASES
The Company leases its distribution centers and manufacturing facilities from third parties under various non-cancelable lease agreements expiring at various dates through 2038. Also, the Company leases some property, plant and equipment under finance leases. Certain leases contain escalation provisions and/or renewal options, giving the Company the right to extend the leases by up to 20 years. However, these options are generally not reflected in the calculation of the right-of-use assets and lease liabilities due to uncertainty surrounding the likelihood of renewal. The Company recognizes operating lease costs over the respective lease periods, including short-term and month-to-month leases. The Company incurred operating lease costs of $2,384 and $2,750 during the three months ended March 31, 2025 and 2024, respectively. These costs are included primarily within SG&A in the condensed consolidated statements of operations and do not include lease termination costs associated with the Asset Sale. Refer to Note 3 – Restructuring and Asset Sales for further details.
The Company has operating subleases and logistics agreements which have been accounted for by reference to the underlying asset subject to the lease, primarily as an offset to rent expense, primarily within SG&A. For the three months ended March 31, 2025 and 2024, the Company recorded sublease and logistics income of $1,188 and $738, respectively.
Total right-of-use ("ROU") assets, finance lease assets, and lease liabilities were as follows:
Balance Sheet ClassificationMarch 31,
2025		December 31,
2024
Lease assets
Operating lease assetsOperating lease right-of-use assets$40,863 $42,869 
Finance lease assetsProperty, plant and equipment, net7,091 7,279 
Total lease assets$47,954 $50,148 
Lease liabilities
Current:
 Operating leasesCurrent portion of operating lease liabilities$7,785 $7,731 
 Finance leasesCurrent portion of finance lease liabilities467 459 
Noncurrent:
 Operating leasesLong-term operating lease liabilities35,629 37,553 
 Finance leasesLong-term finance lease liabilities7,711 7,830 
Total lease liabilities$51,592 $53,573 
The aggregate future minimum lease payments under long-term non-cancelable operating and finance leases with remaining terms greater than one year as of March 31, 2025 are as follows:
OperatingFinance
For the period of April 1, 2025 to December 31, 2025$7,137 $661 
Year ending December 31,
20268,693 847 
20278,781 850 
20288,243 805 
20295,374 822 
20304,240 838 
Thereafter6,643 6,379 
Total lease payments49,111 11,202 
Less portion representing interest(5,697)(3,024)
Total principal43,414 8,178 
Less current portion(7,785)(467)
Long-term portion$35,629 $7,711 
Subsequent event - Lease Renewal
In April 2025, Hydrofarm renewed the lease at its Edmonton, Canada peat moss harvesting facility. The lease has been extended by a term of seven years, through April 2033, with annual rent of $347 at the beginning of the renewal period, with annual fixed increases until the final year when annual rent is $419. The Company accounts for the lease as an operating lease.