Note 13 - Sale-leaseback of Poway Facility

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Sale Leaseback Transaction Disclosure [Text Block]

13. Sale-leaseback of Poway Facility

On

December

4,

2015,

we completed the sale of our headquarters facility located in Poway, California (the “Poway Facility”) for

$34.1

million. After payment of commissions and other fees associated with the sale we realized net cash proceeds of approximately

$33.3

 million which resulted in a total gain of

$18.5

 million. Concurrent with the closing of the sale, we entered into a lease, with a

ten

-year term through

2025,

that provides for base rent of approximately

$1.6

 million per annum, with

3%

annual adjustments for inflation and a pro rata share of property operating costs. The lease covers approximately

43%

of the Poway Facility. This lease also contains

two

five

-year renewal options.

We accounted for this transaction in accordance with ASC subtopic

840

-

40,

Sale-leaseback transactions

, and recognized a gain on the sale-leaseback totaling

$3.2

 million for the year ended

December

26,

2015.

The remaining

$15.3

 million portion of the gain not recognized at the time of sale was deferred and is being recognized on a straight-line basis over the

10

-year lease term in line with the recognition of rental expense related to the lease. During the year ended

December

31,

2016

we amortized

$2.0

 million of the deferred gain to income.