The Company primarily leases manufacturing facilities, distribution centers, and office spaces with lease terms expiring through 2031. The Company recognized the following lease costs in the accompanying condensed consolidated statement of income:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Operating lease expense	$	3,540	$	2,122	$	6,586	$	3,942
Short-term lease expense	495		11		1,143		20
Variable lease expense	434		394		750		767
Total lease expense	$	4,469	$	2,527	$	8,479	$	4,729

For the three months ended June 30, 2025 and 2024, rent expense included in operating expenses was $3,755,000 and $2,253,000, respectively, and rent expense included in cost of goods sold was $714,000 and $274,000, respectively. For the six months ended June 30, 2025 and 2024, rent expense included in operating expenses was $6,945,000 and $4,184,000, respectively, and rent expense included in cost of goods sold was $1,534,000 and $545,000, respectively.


	June 30, 2025		December 31, 2024
Weighted average remaining lease term	3.92 years		4.33 years
Weighted average discount rate	6.9	%	7.0	%


	Six Months Ended June 30,
	2025		2024
	(in thousands)
Right-of-use assets obtained in exchange for operating lease liabilities	$	10,457	$	28,118
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases	$	6,336	$	3,573


	(in thousands)
2025 (remainder)	$	7,340
2026	14,885
2027	13,961
2028	12,915
2029	7,567
Thereafter	769
Total lease payments	57,437
Less: imputed interest	(7,214)
Total lease liability balance	$	50,223

During the six months ended June 30, 2024, the Company recorded a non-cash impairment of a ROU asset of $1,993,000 resulting from the sublease of its City of Industry warehouse in California.

Global Wells has been the landlord under an operating lease agreement with an unrelated party since September 2020. On February 28, 2025, the lease agreement between Global Wells and the tenant was terminated and effective March 1, 2025, Global Wells entered into a new six-year operating lease agreement ending on February 28, 2031 with a different unrelated party that generates monthly rental payments from $87,000 to $101,000. The expected rental income is $564,000 for the remaining six months of the year ending December 31, 2025 and $1,128,000 per annum over the next five years.