v3.25.4
Leases
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Leases
NOTE 16 – LEASES
Under ASC 842, leases are separated into two classifications: operating leases and financial leases. Lease classification under ASC 842 is relatively similar to ASC 840. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria: (1) transference of title/ownership to the lessee, (2) reasonably certain to exercise a purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset and (5) asset specialization. Any lease that does not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Specifically, for operating leases, the Company recognizes a right-of-use asset and a corresponding lease liability upon lease commitment.
Company as a lessee
The Company is the lessee in a lease contract when the Company obtains the right to use the asset. The right-of-use asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company has also elected the short-term lease exception whereby leases with a term of 12 months or less at inception are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis over the lease term in our Consolidated Statements of Operations. The Company determines the lease term by agreement with the lessor. Options to renew are considered in lease terms if reasonably expected to be exercised.
ASC 842 requires a lessee to use the rate implicit in the lease whenever that rate is readily determinable, otherwise the incremental borrowing rate (“IBR”) should be used. Given the nature of the Company’s lease portfolio, which consists of leases of hangar spaces, aircraft, vehicles, copiers, buildings, aircraft equipment, the implicit rate is often unavailable. In such cases, the Company uses its incremental borrowing rate as the discount rate. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The determination of the IBR requires judgment and is determined based on the Company’s credit rating and term of the lease adjusted for the effects of collateral.
Sale-Leaseback Transaction
The Company completed a sale-leaseback transaction on October 28, 2025. As such, we assessed the sale-leaseback arrangement to determine whether a sale has occurred under Accounting Standards Codification (“ASC”) Topic 606: Revenue from Contracts with Customers (“ASC 606”), as well as assess whether the classification of the lease and/or the terms preclude sale accounting under ASC 842, Leases (“ASC 842”). These assessments involve a determination of whether or not control of the underlying property has been transferred to the buyer. If we determine control of the underlying property has been transferred to the buyer, we account for the arrangement as a sale and leaseback transaction. If we determine control of the underlying property has not been transferred to the buyer, we account for the arrangement as a financing transaction.
The determination of the fair values of the properties related to our sale-leaseback arrangement requires subjectivity and estimates, including the use of valuation techniques and uncertain inputs, such as market price per square foot, where applicable. The valuation method used was the depreciated cost method. Where real estate valuation expertise is required, we obtain independent third-party appraisals to determine the fair value of the underlying asset. While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable.
On October 28, 2025, the Company closed on a sale-leaseback transaction with an unrelated third party. Under this transaction the Company terminated and ultimately reassigned its previous ground leases with the Gallatin Airport Authority and sold three properties with a combined net book value of $30.0 million for gross proceeds of $49.3 million, which was reduced by transaction costs of $2.5 million for net cash proceeds of approximately $46.8 million. The properties in the sale-leaseback transaction are comprised of three hangars located in Bozeman, MT, totaling approximately 120,000 square feet of hangar and office space. The lease agreement has a stated ten-year term. The lease includes an option to terminate after seven years without penalty and a five-year renewal option at the end of the initial term. In determining the lease term for accounting purposes, the Company concluded it is reasonably certain not to exercise the termination option and therefore included the full ten-year stated term in the lease term. The Company is not reasonably certain to exercise the renewal option, and accordingly, the renewal period is excluded from the lease term. We recognized a gain of $16.9 million on this transaction, which is included in Gain on sale-leaseback transaction in Other income in the Consolidated Statements of Operations. Right-of-use assets and lease liabilities recognized related to this sale-leaseback transaction were $28.0 million, respectively.
Components of the Company’s operating and finance lease assets and liabilities as of December 31, 2025 and 2024 are as follows:
As of December 31,
dollars in thousands
Financial Statement Line Item20252024
Assets
Operating lease right-of-use assetOther noncurrent assets$31,416 $7,951 
Finance lease right-of-use asset, netProperty, plant and equipment, net92 36 
Liabilities
Operating lease right-of-use liabilities (current)Operating right-of-use liability (current)$2,384 $1,835 
Finance lease right-of-use liabilities (current)Accrued expenses and other current liabilities23 11 
Operating lease right-of-use liabilities (non-current)Operating right-of-use liability (noncurrent)29,163 6,083 
Finance lease right-of-use liabilities (non-current)Accrued expenses and other noncurrent liabilities73 26 
The Company leases various property and premises on a short-term basis and leases some of its premises under non-cancelable operating leases that expire on various dates through October 2035.
The Company recorded $3.5 million and $2.1 million of expenses associated with these operating leases in Cost of Revenues and Selling, general and administrative expense in the Consolidated Statements of Operations for the years ended December 31, 2025 and 2024. The Company recorded expenses associated with finance leases in Cost of revenues and Selling, general and administrative expense in the Consolidated Statements of Operations.
Supplemental cash flow information related to leases is as follows:
Year Ended December 31,
dollars in thousands
20252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$3,486 $2,222 
Operating cash flows from finance leases10 18 
Financing cash flows from finance leases10 3 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases$30,582 $1,262 
Operating lease from purchase consideration of FMS acquisition— 1,016 
Finance leases69 — 
As of December 31, 2025, future minimum lease payments are as follows:
dollars in thousands
Operating LeasesFinance Leases
Year Ending December 31:
2026$4,723 $32 
20274,713 31 
20284,545 31 
20294,662 22 
20304,243 — 
Thereafter22,086 — 
Total lease payments44,972 116 
Less: interest(13,425)(20)
Total lease liabilities$31,547 $96 
Weighted average remaining lease term:9.4 years3.9 years
Weighted average discount rate:8.0 %10.6 %
Leases
NOTE 16 – LEASES
Under ASC 842, leases are separated into two classifications: operating leases and financial leases. Lease classification under ASC 842 is relatively similar to ASC 840. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria: (1) transference of title/ownership to the lessee, (2) reasonably certain to exercise a purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset and (5) asset specialization. Any lease that does not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Specifically, for operating leases, the Company recognizes a right-of-use asset and a corresponding lease liability upon lease commitment.
Company as a lessee
The Company is the lessee in a lease contract when the Company obtains the right to use the asset. The right-of-use asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company has also elected the short-term lease exception whereby leases with a term of 12 months or less at inception are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis over the lease term in our Consolidated Statements of Operations. The Company determines the lease term by agreement with the lessor. Options to renew are considered in lease terms if reasonably expected to be exercised.
ASC 842 requires a lessee to use the rate implicit in the lease whenever that rate is readily determinable, otherwise the incremental borrowing rate (“IBR”) should be used. Given the nature of the Company’s lease portfolio, which consists of leases of hangar spaces, aircraft, vehicles, copiers, buildings, aircraft equipment, the implicit rate is often unavailable. In such cases, the Company uses its incremental borrowing rate as the discount rate. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The determination of the IBR requires judgment and is determined based on the Company’s credit rating and term of the lease adjusted for the effects of collateral.
Sale-Leaseback Transaction
The Company completed a sale-leaseback transaction on October 28, 2025. As such, we assessed the sale-leaseback arrangement to determine whether a sale has occurred under Accounting Standards Codification (“ASC”) Topic 606: Revenue from Contracts with Customers (“ASC 606”), as well as assess whether the classification of the lease and/or the terms preclude sale accounting under ASC 842, Leases (“ASC 842”). These assessments involve a determination of whether or not control of the underlying property has been transferred to the buyer. If we determine control of the underlying property has been transferred to the buyer, we account for the arrangement as a sale and leaseback transaction. If we determine control of the underlying property has not been transferred to the buyer, we account for the arrangement as a financing transaction.
The determination of the fair values of the properties related to our sale-leaseback arrangement requires subjectivity and estimates, including the use of valuation techniques and uncertain inputs, such as market price per square foot, where applicable. The valuation method used was the depreciated cost method. Where real estate valuation expertise is required, we obtain independent third-party appraisals to determine the fair value of the underlying asset. While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable.
On October 28, 2025, the Company closed on a sale-leaseback transaction with an unrelated third party. Under this transaction the Company terminated and ultimately reassigned its previous ground leases with the Gallatin Airport Authority and sold three properties with a combined net book value of $30.0 million for gross proceeds of $49.3 million, which was reduced by transaction costs of $2.5 million for net cash proceeds of approximately $46.8 million. The properties in the sale-leaseback transaction are comprised of three hangars located in Bozeman, MT, totaling approximately 120,000 square feet of hangar and office space. The lease agreement has a stated ten-year term. The lease includes an option to terminate after seven years without penalty and a five-year renewal option at the end of the initial term. In determining the lease term for accounting purposes, the Company concluded it is reasonably certain not to exercise the termination option and therefore included the full ten-year stated term in the lease term. The Company is not reasonably certain to exercise the renewal option, and accordingly, the renewal period is excluded from the lease term. We recognized a gain of $16.9 million on this transaction, which is included in Gain on sale-leaseback transaction in Other income in the Consolidated Statements of Operations. Right-of-use assets and lease liabilities recognized related to this sale-leaseback transaction were $28.0 million, respectively.
Components of the Company’s operating and finance lease assets and liabilities as of December 31, 2025 and 2024 are as follows:
As of December 31,
dollars in thousands
Financial Statement Line Item20252024
Assets
Operating lease right-of-use assetOther noncurrent assets$31,416 $7,951 
Finance lease right-of-use asset, netProperty, plant and equipment, net92 36 
Liabilities
Operating lease right-of-use liabilities (current)Operating right-of-use liability (current)$2,384 $1,835 
Finance lease right-of-use liabilities (current)Accrued expenses and other current liabilities23 11 
Operating lease right-of-use liabilities (non-current)Operating right-of-use liability (noncurrent)29,163 6,083 
Finance lease right-of-use liabilities (non-current)Accrued expenses and other noncurrent liabilities73 26 
The Company leases various property and premises on a short-term basis and leases some of its premises under non-cancelable operating leases that expire on various dates through October 2035.
The Company recorded $3.5 million and $2.1 million of expenses associated with these operating leases in Cost of Revenues and Selling, general and administrative expense in the Consolidated Statements of Operations for the years ended December 31, 2025 and 2024. The Company recorded expenses associated with finance leases in Cost of revenues and Selling, general and administrative expense in the Consolidated Statements of Operations.
Supplemental cash flow information related to leases is as follows:
Year Ended December 31,
dollars in thousands
20252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$3,486 $2,222 
Operating cash flows from finance leases10 18 
Financing cash flows from finance leases10 3 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases$30,582 $1,262 
Operating lease from purchase consideration of FMS acquisition— 1,016 
Finance leases69 — 
As of December 31, 2025, future minimum lease payments are as follows:
dollars in thousands
Operating LeasesFinance Leases
Year Ending December 31:
2026$4,723 $32 
20274,713 31 
20284,545 31 
20294,662 22 
20304,243 — 
Thereafter22,086 — 
Total lease payments44,972 116 
Less: interest(13,425)(20)
Total lease liabilities$31,547 $96 
Weighted average remaining lease term:9.4 years3.9 years
Weighted average discount rate:8.0 %10.6 %