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Note 3 - Relocation

3 Months Ended

Mar. 29, 2015

RELOCATION

During 2014, we were informed by local government authorities in Shenzhen, China that the lease for our facility there would not be extended, and we commenced a search for an alternate site to relocate our facility. In July 2014, our subsidiary in China entered into a lease for a replacement facility, also located in Shenzhen. During the fourth quarter of 2014, our subsidiary in China vacated its former facility premises and substantially completed a move and transition to this new facility.

The Company received compensation from the local government authorities for leasehold improvements and moving-related costs totaling $815, of which $596 was recognized as a reduction of expenses incurred during 2014, which were $841. It is the Company’s policy to recognize this compensation as a reduction of expenses as the expenses are recognized. An additional $61 of this government compensation was recognized during the first quarter of 2015 as a reduction of expenses which totaled $109. We estimate that approximately $158 of expenses remain to be incurred, primarily consisting of employee labor retention payments, and we have deferred the balance of government compensation to fully offset these expenses.