Note 6 - CSS Sale

6 Months Ended

Jul. 02, 2017

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

(

)

CSS Sale

August 16, 2016,

the Company completed the sale of certain assets, intellectual property, contracts and other assets of Sypris Electronics (the “CSS Sale”) comprised principally of the CSS product lines. The assets were sold for

$42,000,000

in cash consideration,

$1,500,000

of which is held in escrow for up to

months from the sale date in connection with certain customary representations, warranties, covenants and indemnifications of the Company. The total net book value of the related business assets included in the sale was

$8,137,000,

and consisted of

$6,613,000

in inventories,

$1,050,000

in fixed assets,

$624,000

in other current assets and

$150,000

in accrued liabilities. The Company incurred transaction related expenses of

$2,674,000,

and the Company recognized a net gain of

$31,189,000

on the sale, which was reported in other income, net in the consolidated statement of operations for the year ended

December

31,

2016.

A portion of the proceeds from the CSS Sale was used to pay off the Company’s most senior, secured debt consisting of a “Term Loan” and a “Revolving Credit Facility.” The retained portion of the Sypris Electronics segment will continue to provide circuit card and full “box build” electronic manufacturing to customers in the aerospace, defense, medical and severe environment markets, among others.

Revenue from the CSS product lines for the

six

months ended

July

2016

was

$9,310,000.

While the Company is able to distinguish revenue and contribution margin information related to the CSS product lines, the Company is

not

able to present meaningful information about the results of operations and cash flows of the CSS product lines. Therefore, the sale was

not

classified as a discontinued operation.