The Company leases certain manufacturing facilities, warehouses, office space, land, and equipment. The Company determines if a contract is a lease or contains an embedded lease at the inception of the agreement. Leases with an initial term of 12 months or less are not recorded on the unaudited interim condensed consolidated balance sheets. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. The Company's lease liabilities do not include future lease payments related to options to extend or terminate lease agreements as it is not reasonably certain those options will be exercised. However, certain European production facility leases acquired through our purchase of Saxdor are set to expire within the next 1-2 years and the Company has determined that extension options on those facilities are reasonably certain to be exercised for one extension period of 1-3 years, depending on the facility. Accordingly, the lease liabilities related to those production facilities include future lease payments related to options to extend the current lease agreements.

Other information concerning the Company's operating leases accounted for under ASC Topic 842, Leases is as follows:


Classification		As of September 30, 2026		As of June 30, 2026
Assets
Right-of-use assets	Other assets	$	10,121	$	11,696

Liabilities
Current operating lease liabilities	Accrued expenses	$	4,909	$	4,899
Long-term operating lease liabilities	Other liabilities	5,601		6,852
Total lease liabilities		$	10,510	$	11,751


Classification		Three Months Ended September 30, 2026		Three Months Ended September 30, 2025
Operating lease costs 1	Cost of sales	$	1,181	$	622
	Selling and marketing, and general and administrative	348		184

Sublease income	Other expense (income), net	—		(10)

Cash paid for amounts included in the measurement of operating lease liabilities	Cash flows from operating activities	1,097		673

The lease liability for operating leases that contain variable escalating rental payments with scheduled increases that are based on the lesser of a stated percentage increase or the cumulative increase in an index, is determined using the stated percentage increase.

The weighted-average remaining lease term as of September 30, 2026 and 2025 was 2.34 years and 2.78 years, respectively. As of September 30, 2026 and 2025, the weighted-average discount rate determined based on the Company's incremental borrowing rate is 7.51% and 4.68%, respectively.

Future annual minimum lease payments for the following fiscal years as of September 30, 2026 are as follows:


Fiscal years ending December 31 1:	Amount
Remainder of 2026 (fiscal year change transition period 1)	$	1,408
2027	5,399
2028	3,196
2029	1,319
2030	234
2031 and thereafter	—
Total	11,556
Less: imputed interest	(1,046)
Present value of lease liabilities	$	10,510