PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following (in thousands):

	June 30,			December 31,
	2018			2017
Land	$	377		$	377
Building	2,978			2,868
Machinery and equipment	39,131			38,432
Leasehold and building improvements	9,866			8,156
Construction in progress	1,201			3,531
	53,553			53,364
Less accumulated depreciation	(36,966		)	(36,033		)
Total property and equipment, net	$	16,587		$	17,331

The Company has subscription agreements whereby its instruments in inventory may be placed at a customer's location on a rental basis. The cost of these instruments is transferred to machinery and equipment and depreciated, typically over a five-to-seven year period depending on the circumstance under which the instrument is placed with the customer.

Depreciation expense was $1.0 million for both of the three months ended June 30, 2018 and 2017. Depreciation expense was $2.1 million and $2.0 million for the the six months ended June 30, 2018 and 2017, respectively.

Our cost of instruments under operating leases as of June 30, 2018 and December 31, 2017, was $10.5 million and $10.8 million, respectively, before accumulated depreciation of $5.6 million and $5.0 million, respectively, and the net book value was $4.9 million and $5.8 million, respectively.