15.	Sale-leaseback Transactions

Denton Facility

On June 2, 2016, the Company entered into an agreement to sell its manufacturing facility in Denton, Texas for gross proceeds of $5.0 million, less costs associated with the transaction of $0.3 million, or net proceeds of $4.7 million. As a part of the transaction, the Company entered into a lease for the property from the purchaser for a period of 13 years.

Prior to the consummation of the above transaction, the Company entered into a sublease agreement with a supplier of the Company at this facility for a period of five years. Due to the Company’s continuing involvement through the sublease agreement, the Company has accounted for the sale-leaseback as a financing liability. Payments made by the Company are allocated between interest expense and a reduction to the sale-leaseback financing liability. The weighted-average effective interest rate of the sale-leaseback financing liability was 2.22%.

As of June 30, 2016, future payments on the sale-leaseback financing liability are as follows (in thousands):

Fiscal Years	Payments
Remainder of 2016	$	229
2017		399
2018		407
2019		415
2020		423
2021		431
Thereafter		3,480
Total payments		5,784
Less amount representing interest		(784	)
Total sale-leaseback financing liability		5,000
Less current portion of sale-leaseback financing liability included in accounts payable and accrued expenses		(287	)
Long-term portion of sale-leaseback financing liability included in other liabilities	$	4,713

As of June 30, 2016 and December 31, 2015, the net carrying value of the Denton facility assets that are included in property, plant, and equipment on our condensed consolidated balance sheets amounted to $12.9 million and $13.1 million, respectively. The useful life of the asset was modified to the remainder of the lease’s duration. The Company concluded there was a triggering event that required an impairment test to be performed to support the assets’ carrying value as a result of the carrying value of the long-lived assets being in excess of the gross proceeds received as a result of the sale-leaseback transaction. An undiscounted cash flow analysis was performed and the sum of the undiscounted cash flows exceeded the long-lived assets’ carrying value. As a result of this analysis, no impairment was recorded during the second quarter of 2016.

Telford Facility

On June 2, 2016, the Company entered into an agreement to sell its manufacturing facility in Telford, Pennsylvania for gross proceeds of $6.0 million, less costs associated with the transaction of $0.4 million, or net proceeds of $5.6 million. As a part of the transaction, the Company entered into a lease for the property from the purchaser for a period of 13 years.

The Company recorded a deferred gain on the sale of this facility in the amount of $2.4 million recorded in the Condensed Consolidated Balance Sheets as an offset to property, plant, and equipment, which will be recognized over the 13-year lease term. As a result of this transaction, the Company initially recorded a capital lease obligation of $5.7 million for the facilities leased. The weighted-average effective interest rate of the capital lease was 3.43%.

The future minimum payments for the capital lease as of June 30, 2016, are as follows (in thousands):

Fiscal Years	Payments
Remainder of 2016	$	241
2017		487
2018		497
2019		507
2020		517
2021		527
Thereafter		4,253
Total payments		7,029
Less amount representing interest		(1,392	)
Present value of future minimum lease payments		5,637
Less current portion of capital lease obligation included in accounts payable and accrued expenses		(293	)
Long-term portion of capital lease obligation included in other liabilities	$	5,344

Prior to the execution of this transaction, the Company did not have any assets held under capital leases. Capital lease assets included in the Condensed Consolidated Balance Sheets as part of property, plant, and equipment as of June 30, 2016, are as follows (in thousands):

	June 30, 2016			Depreciable Life (Years)

Building and improvements, net of deferred gain	$	3,296			13
Less: Accumulated depreciation		(36	)
Total	$	3,260