Commitments, Contingencies, and Concentrations

Leases

The Company uses various leased facilities and equipment in its operations. In the normal course of business, operating leases are generally renewed or replaced by other leases. Certain operating leases include escalation clauses.

Total rental expense under operating leases was $3.6 million, $3.6 million, and $3.6 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Future minimum lease payments for operating leases (excluding related party leases as described in Note 16) with initial or remaining noncancellable lease terms in excess of one year are as follows (in thousands):



2019	$	3,580
2020	2,126
2021	997
2022	725
2023	503
Thereafter	336

Litigation

The Company is subject to various legal proceedings that constitute ordinary, routine litigation incidental to its business. The Company is of the opinion that the disposition of these proceedings will not have a material adverse effect on its business or its financial condition, results of operations, and cash flows.

Executive Employment Agreements

The Company has employment agreements with its executive officers which outline base salary, incentive compensation, and equity-based compensation. The employment agreements with the Company's executive officers also provide for incremental compensation in the event of termination without cause or resignation for good reason.

On May 4, 2018, the Company amended the employment agreement of its general counsel to increase the cash bonus opportunity and annual equity award beginning with the 2018 fiscal year.

Sources of Supplies

Although most materials incorporated in the Company’s products are available from a number of sources, certain materials are available only from a relatively limited number of suppliers.

Some of the most highly specialized materials for the Company’s sensors are sourced from a single vendor. The Company maintains a safety stock inventory of certain critical materials at its facilities.

Certain metals used in the manufacture of the Company’s products are traded on active markets, and can be subject to significant price volatility.

Market Concentrations

No single customer comprises greater than 5% of net revenues.

The vast majority of the Company’s products are used in the broad industrial market, with selected uses in military and aerospace, medical, agriculture, and construction. Within the broad industrial segment, the Company’s products serve wide applications in the waste management, bulk hauling, logging, scale manufacturing, engineering systems, pharmaceutical, oil, chemical, steel, paper, and food industries.

Credit Risk Concentrations

Financial instruments with potential credit risk consist principally of cash and cash equivalents, accounts receivable, and notes receivable. The Company maintains cash and cash equivalents with various major financial institutions. Concentrations of credit risk with respect to receivables are generally limited due to the Company’s large number of customers and their dispersion across many countries and industries. At December 31, 2018 and 2017, the Company had no significant concentrations of credit risk.

Geographic Concentrations

At December 31, 2018 and 2017, a significant percentage of the Company’s cash and cash equivalents are held outside the United States. See the following table for the percentage of cash and cash equivalents by region at December 31, 2018 and December 31, 2017:



	December 31,
	2018		2017
Asia	28	%	28	%
United States	7	%	7	%
Israel	35	%	37	%
Europe	13	%	15	%
United Kingdom	12	%	5	%
Canada	5	%	8	%
Total	100	%	100	%