Annual report pursuant to Section 13 and 15(d)

Leases

v3.24.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of December 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.6 million, or 94% of the total lease liabilities on the consolidated balance sheet.
During the year ended December 31, 2023, the Company entered into new operating lease agreements resulting in an additional $0.5 million of right-of-use assets and lease liabilities.

Balance Sheet Presentation
Operating and finance lease amounts from continuing operations are as follows (in thousands):
Year Ended December 31,
Classification Financial Statement Line Item 2023 2022
Operating lease assets Right-of-use assets, operating leases $ 27,784  $ 29,142 
Finance lease assets Property, plant and equipment, net 1,543  1,494 
Current liabilities Current portion of lease liabilities, operating leases 1,140  1,015 
Current liabilities Current portion of lease liabilities, finance leases 292  280 
Non-current liabilities Non-current portion of lease liabilities, operating leases 29,729  30,869 
Non-current liabilities Non-current portion of lease liabilities, finance leases $ 1,307  $ 1,242 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Year Ended December 31,
(in thousands) 2023 2022
Operating lease cost1
$ 3,945  $ 4,108 
Finance lease cost:
Reduction in carrying amount of right-of-use assets 334  273 
Interest on finance lease liabilities 85  36 
Sublease income (394) (187)
Total lease cost $ 3,970  $ 4,230 
1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the consolidated statements of income (loss).

Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases as of December 31, 2023 are as follows:
(in thousands) Operating Finance
2024 $ 3,651  $ 367 
2025 3,671  361 
2026 3,691  361 
2027 3,765  361 
2028 3,840  303 
Thereafter 32,312  85 
Total undiscounted minimum future lease payments 50,930  1,838 
Imputed Interest (20,061) (239)
Total lease liabilities $ 30,869  $ 1,599 

Lease Term and Discount Rate
Year Ended December 31,
2023 2022
Weighted-average discount rate
Operating leases 8.33  % 8.27  %
Finance leases 5.92  % 2.32  %
Weighted-average remaining lease term
Operating leases 12.67 years 13.59 years
Finance leases 5.07 years 6.06 years
Leases Leases
The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of December 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.6 million, or 94% of the total lease liabilities on the consolidated balance sheet.
During the year ended December 31, 2023, the Company entered into new operating lease agreements resulting in an additional $0.5 million of right-of-use assets and lease liabilities.

Balance Sheet Presentation
Operating and finance lease amounts from continuing operations are as follows (in thousands):
Year Ended December 31,
Classification Financial Statement Line Item 2023 2022
Operating lease assets Right-of-use assets, operating leases $ 27,784  $ 29,142 
Finance lease assets Property, plant and equipment, net 1,543  1,494 
Current liabilities Current portion of lease liabilities, operating leases 1,140  1,015 
Current liabilities Current portion of lease liabilities, finance leases 292  280 
Non-current liabilities Non-current portion of lease liabilities, operating leases 29,729  30,869 
Non-current liabilities Non-current portion of lease liabilities, finance leases $ 1,307  $ 1,242 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Year Ended December 31,
(in thousands) 2023 2022
Operating lease cost1
$ 3,945  $ 4,108 
Finance lease cost:
Reduction in carrying amount of right-of-use assets 334  273 
Interest on finance lease liabilities 85  36 
Sublease income (394) (187)
Total lease cost $ 3,970  $ 4,230 
1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the consolidated statements of income (loss).

Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases as of December 31, 2023 are as follows:
(in thousands) Operating Finance
2024 $ 3,651  $ 367 
2025 3,671  361 
2026 3,691  361 
2027 3,765  361 
2028 3,840  303 
Thereafter 32,312  85 
Total undiscounted minimum future lease payments 50,930  1,838 
Imputed Interest (20,061) (239)
Total lease liabilities $ 30,869  $ 1,599 

Lease Term and Discount Rate
Year Ended December 31,
2023 2022
Weighted-average discount rate
Operating leases 8.33  % 8.27  %
Finance leases 5.92  % 2.32  %
Weighted-average remaining lease term
Operating leases 12.67 years 13.59 years
Finance leases 5.07 years 6.06 years
Leases Leases
The Company's portfolio of leases contains both finance and operating leases that relate to real estate and manufacturing equipment. Substantially all of the value of the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of Store Capital Corporation ("Store Capital") that was entered into in 2016 and amended with the American Stainless acquisition in 2019 as well as the sale of land at the Munhall facility in 2020. As of December 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.6 million, or 94% of the total lease liabilities on the consolidated balance sheet.
During the year ended December 31, 2023, the Company entered into new operating lease agreements resulting in an additional $0.5 million of right-of-use assets and lease liabilities.

Balance Sheet Presentation
Operating and finance lease amounts from continuing operations are as follows (in thousands):
Year Ended December 31,
Classification Financial Statement Line Item 2023 2022
Operating lease assets Right-of-use assets, operating leases $ 27,784  $ 29,142 
Finance lease assets Property, plant and equipment, net 1,543  1,494 
Current liabilities Current portion of lease liabilities, operating leases 1,140  1,015 
Current liabilities Current portion of lease liabilities, finance leases 292  280 
Non-current liabilities Non-current portion of lease liabilities, operating leases 29,729  30,869 
Non-current liabilities Non-current portion of lease liabilities, finance leases $ 1,307  $ 1,242 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Year Ended December 31,
(in thousands) 2023 2022
Operating lease cost1
$ 3,945  $ 4,108 
Finance lease cost:
Reduction in carrying amount of right-of-use assets 334  273 
Interest on finance lease liabilities 85  36 
Sublease income (394) (187)
Total lease cost $ 3,970  $ 4,230 
1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the consolidated statements of income (loss).

Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases as of December 31, 2023 are as follows:
(in thousands) Operating Finance
2024 $ 3,651  $ 367 
2025 3,671  361 
2026 3,691  361 
2027 3,765  361 
2028 3,840  303 
Thereafter 32,312  85 
Total undiscounted minimum future lease payments 50,930  1,838 
Imputed Interest (20,061) (239)
Total lease liabilities $ 30,869  $ 1,599 

Lease Term and Discount Rate
Year Ended December 31,
2023 2022
Weighted-average discount rate
Operating leases 8.33  % 8.27  %
Finance leases 5.92  % 2.32  %
Weighted-average remaining lease term
Operating leases 12.67 years 13.59 years
Finance leases 5.07 years 6.06 years