NOTE 8 - OPERATING LEASE COMMITMENTS

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 8 - OPERATING LEASE COMMITMENTS

We have commitments under non-cancelable operating leases and other agreements, primarily for factory and office space, with initial or remaining terms of one year or more as follows:

For the years ending December 31:

	Operating Leases
(in thousands)
2013	$	1,017
2014		892
2015		840
2016		513
Total	$	3,262

Lease and rental expense was $1,166,000 and $1,149,000 in 2012 and 2011, respectively.  Rent expense is recorded on a straight line basis, over the term of the lease, for leases that contain fixed escalation clauses.  We amended our lease agreement for the Redmond, Washington headquarters facility effective February 1, 2011, extending the term to August 2016, lowering the square footage to 32,646 and lowering the rental rate.  The lease base annual rental payments during 2012 and 2011 were approximately $487,000 and $326,000, respectively. The lease square footage increases to 33,676 effective February 1, 2014.

In addition to the Redmond facility, approximately 13,000 square feet is leased at three foreign locations, including our German sales, service and engineering operations located in Munich, Germany, under a five-year lease starting in 2010, a sales, service and engineering office located in Shanghai, China under a two-year lease starting in 2011 and a logistics office located in Hong Kong under a one-year lease starting in 2012.