Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Segmented information

 v2.3.0.11
Note 8 - Segmented information
 6 Months Ended
Jul. 03, 2011
Segment Reporting Disclosure [Text Block]
8.
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, Canada, Mexico and Asia. The Company monitors the performance of its geographic operating segments based on adjusted EBITA (earnings before restructuring charges, interest, taxes 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:

   
Three months ended
   
Six months ended
 
   
July 3,
2011
   
July 4,
2010
   
July 3,
2011
   
July 4,
2010
 
Revenues from continuing operations
                       
Mexico
  $ 27,713     $ 35,115     $ 61,892     $ 61,240  
Asia
    10,622       15,900       18,956       32,760  
Canada
    9,392       15,000       20,910       29,496  
U.S.
    2,842       7,028       6,836       11,850  
Total
  $ 50,569     $ 73,043     $ 135,346     $ 135,346  
Intersegment revenue
                               
Mexico
  $ (301 )   $ (789 )   $ (644 )   $ (1,253 )
Asia
    (189 )     —       (189 )     —  
Canada
    (1,232 )     (1,037 )     (2,546 )     (1,461 )
U.S.
    (9 )     (2 )     (17 )     (63 )
Total
  $ (1,731 )   $ (1,828 )   $ (3,396 )   $ (2,777 )
Net external revenue from continuing operations
                               
Mexico
  $ 27,412     $ 34,326     $ 61,248     $ 59,987  
Asia
    10,433       15,900       18,730       32,760  
Canada
    8,160       13,963       18,364       28,035  
U.S.
    2,833       7,026       6,819       11,787  
Total
  $ 48,838     $ 71,215     $ 105,161     $ 132,569  
EBITA
                               
Mexico
  $ 2,047     $ 4,426     $ 4,366     $ 7,544  
Asia
    281       606       291       834  
Canada
    (759 )     (2,215 )     (1,399 )     (3,310 )
U.S.
    (324 )     896       (412 )     1,281  
Total
  $ 1,248     $ 3,713     $ 2,846     $ 6,349  
Interest
    369       451       655       940  
Restructuring charges
    1,743       —       2,107       —  
Earnings (loss) before income taxes
  $ (867 )   $ 3,262     $ 84     $ 5,409  

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 July 3, 2011 and July 4, 2010:

   
Three months ended
   
Six months ended
 
   
July 3,
2011
   
July 4,
2010
   
July 3,
2011
   
July 4,
2010
 
Mexico
  $ 52     $ 62     $ 547     $ 131  
Asia
    —       31       —       635  
Canada
    62       40       1,108       44  
U.S.
    76       11       120       26  
Total
  $ 190     $ 144     $ 1,775     $ 836  

Long-lived assets (a)

   
July 3,
 2011
   
January 2,
2011
 
Mexico
  $ 9,452     $ 9,793  
Asia
    671       718  
Canada
    2,571       1,614  
U.S.
    1,599       1,766  
Total
  $ 14,293     $ 13,891  

 
(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, for the three and six months ended July 3, 2011 and July 4, 2010:

   
Three months ended
   
Six months ended
 
   
July 3,
2011
   
July 4,
2010
   
July 4,
2010
   
July 4,
2010
 
U.S.
  $ 27,522     $ 44,216     $ 62,698     $ 77,633  
Canada
    16,991       16,773       31,964       32,206  
Europe
    3,004       9,798       7,387       9,829  
Asia
    1,301       422       3,089       12,892  
Mexico
    20       6       23       9  
Total
  $ 48,838     $ 71,215     $ 105,161     $ 132,569  

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 three months ended July 3, 2011, three customers individually comprised 16.1%, 15.3% and 10.1% (July 4, 2010– four customers 17.4%, 14.7%, 14.0% and 11.9%) of total revenue from continuing operations across all geographic segments. During the six months ended July 3, 2011 four customers individually comprised 15.7%, 12.5%, 12.5% and 10.0% (July 4, 2010 – 17.6%, 16.8%, 13.1% and 11.7%)  of total revenue from continuing operations across all geographic segments.  As of July 3, 2011, these customers represented 12%, 9%, 16% and 4%, respectively, (January 2, 2011, 8%, 4%, 10% and 5%, respectively) of the Company’s trade accounts receivable.