Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

7. LEASES

In the United States, the Company owns its two main operating facilities located in Exton, PA. In addition to the owned facilities, the Company also has operations in other locations that are leased, as well as other leased assets. In conjunction with the new guidance for leases, as defined by the FASB with ASU 2016-02, Leases (Topic 842), the Company has described the existing leases, which are all classified as operating leases, pursuant to the below.

Facility leases within the United States include a warehousing and distribution center in Houston, Texas, which currently provides manufacturing, stocking and sales operations, with the original lease term running through October 2019. In April 2019, the Company entered into a new operating lease agreement extending the lease term through October 2024. Additionally, the Company leases its corporate office space in Middletown, CT, with the lease term expiring in 2022.

In the United Kingdom, the Company leases a facility in Banbury, England, which serves sales, warehousing and operational functions with the lease term ending in March 2021.

In addition to the above property leases, the Company also has lease agreements in place for various fleet vehicles and equipment with various lease terms.

In the June 30, 2019 condensed consolidated balance sheet, the Company has recorded right-of-use assets of $770,000, and a lease liability of $789,000, of which $317,000 is reported as a current liability. The respective weighted average remaining lease term and discount rate are approximately 3.11 years and 3.73%.

As of June 30, 2019, payment of the lease liability over the next five years, which includes the related interest, is as follows:

Twelve Months Ending June 30,	Lease Liability Payments
	(in thousands)
2020	$	317
2021		262
2022		108
2023		42
2024		44
Thereafter		16
Total Lease Payments	$	789

A similar description of the lease obligations for the previous year is disclosed in the Company’s December 31, 2018 Form 10-K.

Lease expense for the operating leases was approximately $75,000 and $150,000 for the three and six months ended June 30, 2019, respectively. Lease expense is allocated to each portion of the business generally based upon use, with the majority absorbed by manufacturing (cost of goods sold), and the remainder apportioned to selling, administrative and engineering.