| Segmented Information |
General description
During the six months ended June 28, 2020, the Company operated and managed by geographic region in the United States, Mexico and China, which are our operating and reportable segments. Commencing in the three months ended June 28, 2020, China is no longer included as a reportable segment. During the three months ended March 29, 2020, the Company completed final shipments for customers serviced in our Chinese manufacturing facility and the relocation of the equipment to our other North American sites. We utilize each reportable segment’s contribution (revenue minus operating expenses, excluding unrealized foreign exchange gain (loss) on unsettled forward foreign exchange contracts, corporate allocations and restructuring expenses) to monitor reportable segment performance. Contribution by country is utilized by the chief operating decision-maker (defined as the Chief Executive Officer) as the indicator of reportable segment performance, as it reflects costs which our operating segment management are directly responsible for. Intersegment adjustments reflect intersegment sales that are generally recorded at prices that approximate arm’s-length transactions.
In assessing the performance of the reportable segments, management attributes site revenue to the reportable segment that ships the product to the customer, irrespective of the product’s destination. Information about the reportable segments is as follows:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico
|
|
$
|
58,801
|
|
|
$
|
59,336
|
|
|
$
|
122,165
|
|
|
$
|
125,096
|
|
|
China
|
|
|
—
|
|
|
|
5,793
|
|
|
|
4,207
|
|
|
|
14,449
|
|
|
U.S.
|
|
|
32,136
|
|
|
|
29,211
|
|
|
|
65,517
|
|
|
|
59,022
|
|
|
Total
|
|
$
|
90,937
|
|
|
$
|
94,340
|
|
|
$
|
191,889
|
|
|
$
|
198,567
|
|
|
Intersegment revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico
|
|
$
|
(147
|
)
|
|
$
|
(594
|
)
|
|
$
|
(2,569
|
)
|
|
$
|
(743
|
)
|
|
China
|
|
|
—
|
|
|
|
(2,681
|
)
|
|
|
(3,303
|
)
|
|
|
(4,107
|
)
|
|
U.S.
|
|
|
(384
|
)
|
|
|
(129
|
)
|
|
|
(473
|
)
|
|
|
(132
|
)
|
|
Total
|
|
$
|
(531
|
)
|
|
$
|
(3,404
|
)
|
|
$
|
(6,345
|
)
|
|
$
|
(4,982
|
)
|
|
Net external revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico
|
|
$
|
58,654
|
|
|
$
|
58,742
|
|
|
$
|
119,596
|
|
|
$
|
124,353
|
|
|
China
|
|
$
|
—
|
|
|
|
3,112
|
|
|
$
|
904
|
|
|
|
10,342
|
|
|
U.S.
|
|
|
31,752
|
|
|
|
29,082
|
|
|
|
65,044
|
|
|
|
58,890
|
|
|
Total segment revenue (which also equals
consolidated revenue)
|
|
$
|
90,406
|
|
|
$
|
90,936
|
|
|
$
|
185,544
|
|
|
$
|
193,585
|
|
|
Segment contribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico
|
|
$
|
5,088
|
|
|
$
|
5,835
|
|
|
$
|
10,963
|
|
|
$
|
10,641
|
|
|
China
|
|
$
|
—
|
|
|
|
844
|
|
|
|
(2
|
)
|
|
|
1,699
|
|
|
U.S.
|
|
|
2,270
|
|
|
|
1,764
|
|
|
|
5,231
|
|
|
|
3,187
|
|
|
Total
|
|
$
|
7,358
|
|
|
$
|
8,443
|
|
|
$
|
16,192
|
|
|
$
|
15,527
|
|
|
Corporate expenses
|
|
|
4,750
|
|
|
|
6,006
|
|
|
|
10,652
|
|
|
|
11,265
|
|
|
Restructuring charges (recovery)
|
|
|
(125
|
)
|
|
|
1,546
|
|
|
|
(346
|
)
|
|
|
2,170
|
|
|
Change in fair value of warrant liability
|
|
|
399
|
|
|
|
40
|
|
|
|
(118
|
)
|
|
|
(61
|
)
|
|
Change in fair value of contingent
consideration
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,050
|
)
|
|
Unrealized foreign exchange loss on unsettled
forward exchange contracts
|
|
|
(971
|
)
|
|
|
—
|
|
|
|
(459
|
)
|
|
|
—
|
|
|
Interest expense
|
|
|
1,987
|
|
|
|
2,800
|
|
|
|
4,080
|
|
|
|
5,670
|
|
|
Income(loss) before income taxes
|
|
$
|
1,318
|
|
|
$
|
(1,949
|
)
|
|
$
|
2,383
|
|
|
$
|
(467
|
)
|
|
Three months ended June 28, 2020
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Market Sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Test and Measurement
|
|
$
|
4,220
|
|
|
$
|
9,718
|
|
|
$
|
—
|
|
|
$
|
13,938
|
|
|
Retail and Payment Systems
|
|
|
6,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,750
|
|
|
Telecom, Networking and Communications
|
|
|
1,764
|
|
|
|
3,223
|
|
|
|
—
|
|
|
|
4,987
|
|
|
Medical and Safety
|
|
|
7,863
|
|
|
|
2,298
|
|
|
|
—
|
|
|
|
10,161
|
|
|
Industrial, Power and Clean Technology
|
|
|
30,952
|
|
|
|
7,339
|
|
|
|
—
|
|
|
|
38,291
|
|
|
Semiconductors
|
|
|
7,105
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,105
|
|
|
Avionics, Aerospace and Defense
|
|
|
—
|
|
|
|
9,174
|
|
|
|
—
|
|
|
|
9,174
|
|
|
Segment Revenue
|
|
|
58,654
|
|
|
|
31,752
|
|
|
|
—
|
|
|
|
90,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by category
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Point in time
|
|
$
|
551
|
|
|
$
|
1,353
|
|
|
|
—
|
|
|
|
1,904
|
|
|
Over time
|
|
|
58,103
|
|
|
|
30,399
|
|
|
|
—
|
|
|
|
88,502
|
|
|
Total Revenue
|
|
|
58,654
|
|
|
|
31,752
|
|
|
|
—
|
|
|
|
90,406
|
|
|
Three months ended June 30, 2019
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Market Sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Test and Measurement
|
|
$
|
2,403
|
|
|
$
|
9,648
|
|
|
$
|
—
|
|
|
$
|
12,051
|
|
|
Retail and Payment Systems
|
|
|
12,149
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,149
|
|
|
Telecom, Networking and Communications
|
|
|
3,503
|
|
|
|
2,314
|
|
|
|
2,200
|
|
|
|
8,017
|
|
|
Medical and Safety
|
|
|
8,093
|
|
|
|
3,104
|
|
|
|
47
|
|
|
|
11,244
|
|
|
Industrial, Power and Clean Technology
|
|
|
26,845
|
|
|
|
9,178
|
|
|
|
865
|
|
|
|
36,888
|
|
|
Semiconductors
|
|
|
5,749
|
|
|
|
16
|
|
|
|
—
|
|
|
|
5,765
|
|
|
Avionics, Aerospace and Defense
|
|
|
—
|
|
|
|
4,822
|
|
|
|
—
|
|
|
|
4,822
|
|
|
Segment Revenue
|
|
|
58,742
|
|
|
|
29,082
|
|
|
|
3,112
|
|
|
|
90,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by category
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Point in time
|
|
$
|
781
|
|
|
$
|
1,386
|
|
|
$
|
73
|
|
|
|
2,240
|
|
|
Over time
|
|
|
57,961
|
|
|
|
27,696
|
|
|
|
3,039
|
|
|
|
88,696
|
|
|
Total Revenue
|
|
|
58,742
|
|
|
|
29,082
|
|
|
|
3,112
|
|
|
|
90,936
|
|
|
Six months ended June 28, 2020
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Market Sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Test and Measurement
|
|
$
|
8,404
|
|
|
$
|
17,766
|
|
|
$
|
—
|
|
|
$
|
26,170
|
|
|
Retail and Payment Systems
|
|
|
19,073
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,073
|
|
|
Telecom, Networking and Communications
|
|
|
4,799
|
|
|
|
7,014
|
|
|
|
714
|
|
|
|
12,527
|
|
|
Medical and Safety
|
|
|
16,426
|
|
|
|
4,875
|
|
|
|
130
|
|
|
|
21,431
|
|
|
Industrial, Power and Clean Technology
|
|
|
58,473
|
|
|
|
15,830
|
|
|
|
60
|
|
|
|
74,363
|
|
|
Semiconductors
|
|
|
12,421
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,421
|
|
|
Avionics, Aerospace and Defense
|
|
|
—
|
|
|
|
19,559
|
|
|
|
—
|
|
|
|
19,559
|
|
|
Segment Revenue
|
|
|
119,596
|
|
|
|
65,044
|
|
|
|
904
|
|
|
|
185,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by category
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Point in time
|
|
$
|
1,050
|
|
|
$
|
2,420
|
|
|
$
|
452
|
|
|
|
3,922
|
|
|
Over time
|
|
|
118,546
|
|
|
|
62,624
|
|
|
|
452
|
|
|
|
181,622
|
|
|
Total Revenue
|
|
|
119,596
|
|
|
|
65,044
|
|
|
|
904
|
|
|
|
185,544
|
|
|
Six months ended June 30, 2019
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Market Sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Test and Measurement
|
|
$
|
4,434
|
|
|
$
|
20,654
|
|
|
$
|
—
|
|
|
$
|
25,088
|
|
|
Retail and Payment Systems
|
|
|
25,078
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,078
|
|
|
Telecom, Networking and Communications
|
|
|
7,507
|
|
|
|
4,391
|
|
|
|
6,884
|
|
|
|
18,782
|
|
|
Medical and Safety
|
|
|
16,501
|
|
|
|
6,756
|
|
|
|
441
|
|
|
|
23,698
|
|
|
Industrial, Power and Clean Technology
|
|
|
57,779
|
|
|
|
15,271
|
|
|
|
3,017
|
|
|
|
76,067
|
|
|
Semiconductors
|
|
|
13,054
|
|
|
|
16
|
|
|
|
—
|
|
|
|
13,070
|
|
|
Avionics, Aerospace and Defense
|
|
|
—
|
|
|
|
11,802
|
|
|
|
—
|
|
|
|
11,802
|
|
|
Segment Revenue
|
|
|
124,353
|
|
|
|
58,890
|
|
|
|
10,342
|
|
|
|
193,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by category
|
|
Mexico
|
|
|
U.S.
|
|
|
China
|
|
|
Total
|
|
|
Point in time
|
|
$
|
1,216
|
|
|
$
|
3,098
|
|
|
$
|
76
|
|
|
|
4,390
|
|
|
Over time
|
|
|
123,137
|
|
|
|
55,792
|
|
|
|
10,266
|
|
|
|
189,195
|
|
|
Total Revenue
|
|
|
124,353
|
|
|
|
58,890
|
|
|
|
10,342
|
|
|
|
193,585
|
|
Certain customers were reclassified from the Test and Measurement sector to the Industrial IoT, Power and Clean Technology sector during the three months ended June 28, 2020. The comparative periods have been adjusted to conform to this classification.
Additions to property, plant and equipment
The following table contains additions, including those acquired through capital leases, to property, plant and equipment for the three and six months ended:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
U.S.
|
|
$
|
375
|
|
|
$
|
256
|
|
|
$
|
919
|
|
|
$
|
517
|
|
|
Mexico
|
|
|
326
|
|
|
|
965
|
|
|
|
486
|
|
|
|
1,353
|
|
|
China
|
|
|
—
|
|
|
|
23
|
|
|
|
2
|
|
|
|
54
|
|
|
Segment total
|
|
|
701
|
|
|
|
1,244
|
|
|
|
1,407
|
|
|
|
1,924
|
|
|
Corporate and other
|
|
|
3
|
|
|
|
24
|
|
|
|
3
|
|
|
|
24
|
|
|
Total
|
|
$
|
704
|
|
|
$
|
1,268
|
|
|
$
|
1,410
|
|
|
$
|
1,948
|
|
Property, plant and operating lease right of use assets (a)
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
U.S.
|
|
$
|
19,570
|
|
|
$
|
16,904
|
|
|
Mexico
|
|
|
10,221
|
|
|
|
10,970
|
|
|
China
|
|
|
—
|
|
|
|
670
|
|
|
Segment total
|
|
|
29,791
|
|
|
|
28,544
|
|
|
Corporate and other
|
|
|
123
|
|
|
|
96
|
|
|
Total
|
|
$
|
29,914
|
|
|
$
|
28,640
|
|
Other long term segment assets (b)
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
U.S.
|
|
$
|
8,564
|
|
|
$
|
9,273
|
|
|
Mexico
|
|
|
20,457
|
|
|
|
22,179
|
|
|
China
|
|
|
—
|
|
|
|
—
|
|
|
Segment total
|
|
|
29,021
|
|
|
|
31,452
|
|
|
Corporate and other
|
|
|
749
|
|
|
|
859
|
|
|
Total
|
|
$
|
29,770
|
|
|
$
|
32,311
|
|
Total segment assets (a)
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
U.S.
|
|
$
|
125,222
|
|
|
$
|
112,789
|
|
|
Mexico
|
|
|
95,153
|
|
|
|
93,349
|
|
|
China
|
|
|
—
|
|
|
|
6,694
|
|
|
Segment total
|
|
|
220,375
|
|
|
|
212,832
|
|
|
Corporate and other
|
|
|
895
|
|
|
|
547
|
|
|
Total
|
|
$
|
221,270
|
|
|
$
|
213,379
|
|
|
(a)
|
Property, plant and equipment information is based on the principal location of the asset.
|
|
(b)
|
Includes Goodwill, Intangible assets, deferred income taxes and deferred financing costs.
|
Geographic revenue
The following table contains geographic revenue based on our customer invoicing location, for the six months ended June 28, 2020 and June 30, 2019.
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
U.S.
|
|
$
|
85,413
|
|
|
$
|
82,593
|
|
|
$
|
174,922
|
|
|
$
|
176,934
|
|
|
Canada
|
|
|
4,646
|
|
|
|
4,860
|
|
|
|
9,668
|
|
|
|
9,770
|
|
|
China
|
|
|
347
|
|
|
|
3,483
|
|
|
|
954
|
|
|
|
6,881
|
|
|
Total
|
|
$
|
90,406
|
|
|
$
|
90,936
|
|
|
$
|
185,544
|
|
|
$
|
193,585
|
|
Significant customers and concentration of credit risk
Sales of the Company’s products are concentrated in certain cases among specific customers in the same industry. The Company is subject to concentrations of credit risk in trade receivables. The Company considers concentrations of credit risk in establishing the allowance for doubtful accounts and believes the recorded allowances are adequate.
The Company expects to continue to depend upon a relatively small number of customers for a significant percentage of its revenue. In addition to having a limited number of customers, the Company manufactures a limited number of products for each customer. If the Company loses any of its larger customers or any product line manufactured for one of its larger customers, it could experience a significant reduction in revenue. Also, the insolvency of one or more of its larger customers or the inability of one or more of its larger customers to pay for its orders could decrease revenue. As many costs and operating expenses are relatively fixed, a reduction in net revenue can decrease profit margins and adversely affect the business, financial condition and results of operations.
During the six months ended June 28, 2020, one customer exceeded 10% of total revenue, comprising of 14.3% of total revenue across all geographic segments. During the six months ended June 30, 2019, one customer exceeded 10% of total revenue, comprising of 13.1% of total revenue across all geographic segments.
As of June 28, 2020, no customers represented more than 10% of the trade accounts receivable. At December 29, 2019, one customer comprised 10% of the Company’s trade accounts receivable. No other customers individually represented more than 10% of total revenue or trade accounts receivable.
|