Leases

6 Months Ended

Jun. 30, 2025

Note 4. Leases

The Company has real property operating leases for office and manufacturing space. Operating leases for the Company’s personal property consist of leases for office equipment, vehicles, forklifts and storage tanks for bulk gases. The Company recognizes a right-of-use (ROU) asset and a lease liability for operating leases based on the net present value of future minimum lease payments.

Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease term, including renewal periods that are considered reasonably certain. The Company has not elected to recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less.

The Company has finance leases for equipment used throughout its office and manufacturing facilities. The Company recognizes an ROU asset and a lease liability for finance leases based on the net present value of future minimum lease payments. Lease expense for the Company’s finance leases is comprised of the amortization of the ROU asset and interest expense recognized based on the effective interest method.

Variable lease expense is related to certain of the Company’s real property leases and personal property leases, and it generally consists of property tax and insurance components that are for the benefit of the lessor (real property leases) and variable overage fees (personal property leases) that are remitted as part of the Company’s lease payments.

The components of lease expense were as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Finance lease cost:
Amortization of finance lease assets	$	181	$	119	$	314	$	223
Interest on finance lease liabilities		18		12		27		20
Total finance lease expense		199		131		341		243
Operating lease expense		1,321		1,353		2,647		2,693
Short-term lease expense		326		159		477		311
Variable lease expense		49		60		164		112
Lease income ⁽¹⁾		(547)		(537)		(1,094)		(1,069)
Total lease expense	$	1,348	$	1,166	$	2,535	$	2,290

(1)	The Company subleased a portion of its Hazel Park, MI facility starting in June 2022. Lease income for the three months ended June 30, 2025 and 2024 was $547 and $537, respectively, and $1,094 and $1,069 for the six months ended June 30, 2025 and 2024, respectively.

The lease related supplemental cash flow information is as follows:


	Six Months Ended
	June 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities for finance leases:
Operating cash flows	$	21	$	20
Financing cash flows	$	725	$	343

Cash paid for amounts included in the measurement of lease liabilities for operating leases:
Operating cash flows	$	3,074	$	2,980

Right-of-use assets obtained in exchange for recorded lease obligations:
Operating leases	$	2,798	$	337
Finance leases	$	911	$	383