Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
 3 Months Ended
Mar. 31, 2024
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 March 31, 2024, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.4 million, or 95% of the total lease liabilities on the consolidated balance sheet.
During the three months ended March 31, 2024, the Company did not enter into any new finance lease agreements.
Operating and finance lease amounts from continuing operations included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification Financial Statement Line Item March 31, 2024 December 31, 2023
Long-term Assets Right-of-use assets, operating leases $ 27,431  $ 27,784 
Long-term Assets Property, plant and equipment 1,457  1,543 
Current liabilities Current portion of lease liabilities, operating leases 1,170  1,140 
Current liabilities Current portion of lease liabilities, finance leases 288  292 
Non-current liabilities Non-current portion of lease liabilities, operating leases 29,419  29,729 
Non-current liabilities Non-current portion of lease liabilities, finance leases 1,236  1,307 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Three Months Ended March 31,
(in thousands) 2024 2023
Operating lease cost1
$ 989  $ 989 
Finance lease cost:
Amortization of right-of-use assets 83  78 
Interest on finance lease liabilities 23  13 
Sublease income (92) (91)
Total lease cost $ 1,003  $ 989 
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 unaudited condensed consolidated statements of income (loss).
The Company currently subleases the former Palmer facility and records cash receipts related to the sublease in other expense (income) on the unaudited condensed consolidated statements of income (loss). Future expected cash receipts from the Company's sublease as of March 31, 2024 are as follows:
(in thousands) Sublease Receipts
Remainder of 2024 $ 278 
2025 377 
2026 385 
2027 392 
2028 400 
Thereafter 3,386 
Total sublease receipts $ 5,218 
Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases in continuing operations as of March 31, 2024 are as follows:
(in thousands) Operating Finance
Remainder of 2024 $ 2,738  $ 275 
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 50,017  1,746 
Imputed interest (19,428) (222)
Present value of lease liabilities $ 30,589  $ 1,524 
Lease Term and Discount Rate
Weighted-average remaining lease term March 31, 2024 December 31, 2023
Operating leases 12.43 years 12.67 years
Finance leases 4.84 years 5.07 years
Weighted-average discount rate
Operating leases 8.33  % 8.33  %
Finance leases 5.92  % 5.92  %
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 March 31, 2024, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.4 million, or 95% of the total lease liabilities on the consolidated balance sheet.
During the three months ended March 31, 2024, the Company did not enter into any new finance lease agreements.
Operating and finance lease amounts from continuing operations included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification Financial Statement Line Item March 31, 2024 December 31, 2023
Long-term Assets Right-of-use assets, operating leases $ 27,431  $ 27,784 
Long-term Assets Property, plant and equipment 1,457  1,543 
Current liabilities Current portion of lease liabilities, operating leases 1,170  1,140 
Current liabilities Current portion of lease liabilities, finance leases 288  292 
Non-current liabilities Non-current portion of lease liabilities, operating leases 29,419  29,729 
Non-current liabilities Non-current portion of lease liabilities, finance leases 1,236  1,307 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Three Months Ended March 31,
(in thousands) 2024 2023
Operating lease cost1
$ 989  $ 989 
Finance lease cost:
Amortization of right-of-use assets 83  78 
Interest on finance lease liabilities 23  13 
Sublease income (92) (91)
Total lease cost $ 1,003  $ 989 
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 unaudited condensed consolidated statements of income (loss).
The Company currently subleases the former Palmer facility and records cash receipts related to the sublease in other expense (income) on the unaudited condensed consolidated statements of income (loss). Future expected cash receipts from the Company's sublease as of March 31, 2024 are as follows:
(in thousands) Sublease Receipts
Remainder of 2024 $ 278 
2025 377 
2026 385 
2027 392 
2028 400 
Thereafter 3,386 
Total sublease receipts $ 5,218 
Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases in continuing operations as of March 31, 2024 are as follows:
(in thousands) Operating Finance
Remainder of 2024 $ 2,738  $ 275 
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 50,017  1,746 
Imputed interest (19,428) (222)
Present value of lease liabilities $ 30,589  $ 1,524 
Lease Term and Discount Rate
Weighted-average remaining lease term March 31, 2024 December 31, 2023
Operating leases 12.43 years 12.67 years
Finance leases 4.84 years 5.07 years
Weighted-average discount rate
Operating leases 8.33  % 8.33  %
Finance leases 5.92  % 5.92  %
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 March 31, 2024, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.4 million, or 95% of the total lease liabilities on the consolidated balance sheet.
During the three months ended March 31, 2024, the Company did not enter into any new finance lease agreements.
Operating and finance lease amounts from continuing operations included in the unaudited condensed consolidated balance sheet are as follows (in thousands):
Classification Financial Statement Line Item March 31, 2024 December 31, 2023
Long-term Assets Right-of-use assets, operating leases $ 27,431  $ 27,784 
Long-term Assets Property, plant and equipment 1,457  1,543 
Current liabilities Current portion of lease liabilities, operating leases 1,170  1,140 
Current liabilities Current portion of lease liabilities, finance leases 288  292 
Non-current liabilities Non-current portion of lease liabilities, operating leases 29,419  29,729 
Non-current liabilities Non-current portion of lease liabilities, finance leases 1,236  1,307 
Total Lease Cost
Individual components of the total lease cost incurred by the Company are as follows:
Three Months Ended March 31,
(in thousands) 2024 2023
Operating lease cost1
$ 989  $ 989 
Finance lease cost:
Amortization of right-of-use assets 83  78 
Interest on finance lease liabilities 23  13 
Sublease income (92) (91)
Total lease cost $ 1,003  $ 989 
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 unaudited condensed consolidated statements of income (loss).
The Company currently subleases the former Palmer facility and records cash receipts related to the sublease in other expense (income) on the unaudited condensed consolidated statements of income (loss). Future expected cash receipts from the Company's sublease as of March 31, 2024 are as follows:
(in thousands) Sublease Receipts
Remainder of 2024 $ 278 
2025 377 
2026 385 
2027 392 
2028 400 
Thereafter 3,386 
Total sublease receipts $ 5,218 
Maturity of Leases
The amounts of undiscounted future minimum lease payments under leases in continuing operations as of March 31, 2024 are as follows:
(in thousands) Operating Finance
Remainder of 2024 $ 2,738  $ 275 
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 50,017  1,746 
Imputed interest (19,428) (222)
Present value of lease liabilities $ 30,589  $ 1,524 
Lease Term and Discount Rate
Weighted-average remaining lease term March 31, 2024 December 31, 2023
Operating leases 12.43 years 12.67 years
Finance leases 4.84 years 5.07 years
Weighted-average discount rate
Operating leases 8.33  % 8.33  %
Finance leases 5.92  % 5.92  %