Annual report pursuant to Section 13 and 15(d)

Note 12 - Segmented Information

v2.4.0.8
Note 12 - Segmented Information
 12 Months Ended
Dec. 29, 2013
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

12.     Segmented information


General description   


The Company derives its revenue from one dominant industry segment, the electronics manufacturing services industry. The Company is operated and managed geographically and has facilities in the United States, Mexico and China. The Markham production facility ceased operations at the end of the second quarter of 2013. The Company monitors the performance of its geographic operating segments based on adjusted EBITDA (earnings before restructuring charges, loss on extinguishment of debt, acquisition costs, interest, taxes, depreciation and amortization). Intersegment adjustments reflect intersegment sales that are generally recorded at prices that approximate arm’s-length transactions. In assessing the performance of the operating segments management attributes revenue to the operating segment which ships the product to the customer. Information about the operating segments is as follows:


   

Period ended

December 29,
2013

   

Period ended

December 30,
2012

   

Period ended

January 1,
2012

 

Revenues

                       

Mexico

  $ 186,464     $ 187,154     $ 129,677  

Canada

    13,098       35,804       36,582  

US

    47,303       58,358       24,248  

Asia

    58,543       45,477       37,988  

Total

  $ 305,408     $ 326,793     $ 228,495  

Intersegment revenue

                       

Mexico

  $ (5,283 )   $ (3,974 )   $ (2,862 )

Canada

    (2,539 )     (5,983 )     (4,998 )

US

    (20,344 )     (17,799 )     (95 )

Asia

    (6,558 )     (2,732 )     (189 )

Total

  $ (34,724 )   $ (30,488 )   $ (8,144 )

Net external revenue

                       

Mexico

  $ 181,181     $ 183,180     $ 126,815  

Canada

    10,559       29,821       31,584  

US

    26,959       40,559       24,153  

Asia

    51,985       42,745       37,799  

Total

  $ 270,684     $ 296,305     $ 220,351  

Adjusted EBITDA

                       

Mexico

  $ (2,068 )   $ 12,566     $ 11,169  

Canada

    (2,753 )     (4,393 )     (3,880 )

US

    761       3,321       286  

Asia

    3,877       1,529       1,707  

Total

  $ (183 )   $ 13,023     $ 9,282  

A reconciliation of adjusted EBITDA to earnings (loss) before income taxes is as follows:


   

Period ended
December 29,
2013

    Period ended
December 29,
2012 		    Period ended
January 1,
2012 		 
                   

Adjusted EBITDA (loss)

  $ (183 )   $ 13,023     $ 9,282  

Interest

    1,724       1,957       1,468  

Depreciation

    3,781       3,158       2,794  

Restructuring charges

    1,989       2,180       2,678  

Loss on extinguishment of debt

    —       —       300  

Acquisition expenses

    —       —       87  

Earnings (loss) before income taxes

  $ (7,677 )   $ 5,728     $ 1,955  

Capital expenditures:   


The following table contains additions and disposals to property, plant and equipment for:


   

Period ended

December 29,
2013

   

Period ended

December 30,
2012

   

Period ended

January 1,
2012

 

Mexico

  $ 2,035     $ 2,530     $ 2,289  

Canada

    (22,178 )     652       1,576  

US

    242       781       166  

Asia

    496       3,250       9  

Total

  $ (19,405 )   $ 7,213     $ 4,040  

Assets: 


   

December 29,

2013

   

December 30,

2012

 

Long-lived assets (a)

               

Mexico

  $ 12,236     $ 10,725  

Canada

    399       2,730  

US

    2,050       2,265  

Asia

    3,534       3,690  

Total

  $ 18,219     $ 19,410  

Total assets

               

Mexico

  $ 44,415     $ 77,208  

Canada

    2,119       12,821  

US

    21,134       18,994  

Asia

    26,126       12,684  

Total

  $ 93,794     $ 121,707  

(a)

Long-lived assets information is based on the principal location of the asset.


Geographic revenues: 


The following table contains geographic revenues based on the product shipment destination:


   

Period ended

December 29,
2013

   

Period ended

December 30,
2012

   

Period ended

January 1,
2012

 

US

  $ 226,402     $ 214,385     $ 131,738  

Canada

    32,910       68,463       70,846  

Europe

    2,852       11,722       14,249  

Asia

    8,436       1,635       3,486  

Mexico

    84       100       32  

Total

  $ 270,684     $ 296,305     $ 220,351  

Significant customers and concentration of credit risk


Sales of the Company’s products are concentrated among specific customers in the same industry. The Company requires collateral only from new customers with insufficient credit until such time as credit insurance can be obtained. The Company is subject to concentrations of credit risk in trade receivables and mitigates this risk through ongoing credit evaluation of customers and the carriage of credit insurance. 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 largest customers or any product line manufactured for one of its largest customers, it could experience a significant reduction in revenue. Also, the insolvency of one or more of its largest customers or the inability of one or more of its largest customers to pay for its orders could decrease future revenue. As many costs and operating expenses are relatively fixed, a reduction in net revenue can decrease profit margins and adversely affect business, financial condition and results of operations.


During the period ended December 29, 2013, two customers individually comprised 38%, and 12% of revenue from across all geographic segments. At December 29, 2013, these customers represented 22%, and 18% of the Company’s trade accounts receivable.


During the period ended December 30, 2012, two customers individually comprised 36%, and 12% of revenue from across all geographic segments. At December 30, 2012, these customers represented 30%, and 10% of the Company’s trade accounts receivable.


During the period ended January 1, 2012, three customers individually comprised 22%, 11%, and 10% of revenue from continuing operations across all geographic segments. At January 1, 2012 these customers represented 22%, 4% and 11% of the Company’s trade accounts receivable.