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LEASES

6 Months Ended

Jun. 30, 2020

7. LEASES

In the United States, the Company owns its two main operating facilities located in Exton, PA, which provide manufacturing, warehousing and distribution space. In addition to the owned facilities, the Company also has operations in other locations that are leased, as well as other leased assets.

With regards to leased facilities within the United States, the Company leases its corporate office space in Middletown, CT, with the lease term expiring in 2022. Additionally, the Company leases a warehousing and distribution center in Houston, Texas, which currently provides manufacturing, stocking and sales operations, with a 5-year lease term running through October 2024.

In the United Kingdom, the Company leases a facility in Banbury, England, which serves sales, warehousing and operational functions. The lease in Banbury has a 15-year term ending in June 2021.

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

In the June 30, 2020 condensed consolidated balance sheet, the Company has recorded right-of-use assets of $589,000, and a lease liability of $602,000, of which $311,000 is reported as a current liability. The respective weighted average remaining lease term and discount rate are approximately 2.52 years and 3.31%.

Future minimum lease payments under non-cancellable leases as of June 30, 2020, are as follows:

Twelve Months Ending June 30,	Operating Leases
	(in thousands)

2021	$	311
2022		163
2023		62
2024		47
2025		18
Thereafter		1

Total Minimum Lease Payments	$	602

A similar description of the lease obligations for the previous year is disclosed in the Company’s December 31, 2019 Form 10-K.

Lease expense for the operating leases was approximately $74,000 and $149,000 for the three and six months ended June 30, 2020 and $75,000 and $150,000 for the three and six months ended June 30, 2019. 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.