| Interim Consolidated Financial Statement Details |
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3.
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Interim Consolidated financial statement details
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The following consolidated financial statement details are presented as of the period ended for the consolidated balance sheets and for the periods ended for each of the consolidated statements of operations and comprehensive income (loss).
Consolidated Balance Sheets
Accounts receivable – net:
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
Trade accounts receivable
|
|
$
|
67,192
|
|
|
$
|
71,113
|
|
|
Other receivables
|
|
|
188
|
|
|
|
1,098
|
|
|
Allowance for doubtful accounts
|
|
|
(2,309
|
)
|
|
|
(2,292
|
)
|
|
Total
|
|
$
|
65,071
|
|
|
$
|
69,919
|
|
The allowance for doubtful accounts pertains primarily to one customer previously serviced out of Dongguan China. This was provisioned and included with the restructuring charges for the closure of the facility in 2019. Refer to note 10 for further details. To date, there has been no material impact of the COVID-19 pandemic on the allowance for doubtful accounts.
Unbilled contract assets
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
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Opening
|
|
$
|
26,271
|
|
|
$
|
20,405
|
|
|
Contract assets additions
|
|
|
172,217
|
|
|
|
350,709
|
|
|
Contract assets invoiced
|
|
|
(159,841
|
)
|
|
|
(344,843
|
)
|
|
Ending
|
|
$
|
38,647
|
|
|
$
|
26,271
|
|
Inventories:
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
Raw materials
|
|
$
|
50,251
|
|
|
$
|
48,067
|
|
|
Parts and other
|
|
|
383
|
|
|
|
586
|
|
|
Provision for obsolescence
|
|
|
(509
|
)
|
|
|
(827
|
)
|
|
Total
|
|
$
|
50,125
|
|
|
$
|
47,826
|
|
The provision for obsolescence primarily pertains to customers previously serviced out of the Dongguan facility. These have been provisioned and included with the restructuring charges for the closure of the facility in 2019. Refer to note 10 for further details.
Property, plant and equipment – net:
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|
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June 28,
2020
|
|
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December 29,
2019
|
|
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Cost:
|
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
1,648
|
|
|
$
|
1,648
|
|
|
Buildings (b)
|
|
|
18,985
|
|
|
|
18,985
|
|
|
Machinery and equipment (a) (e)
|
|
|
43,192
|
|
|
|
42,732
|
|
|
Office furniture and equipment (c) (e)
|
|
|
836
|
|
|
|
1,005
|
|
|
Computer hardware and software (d) (e)
|
|
|
3,679
|
|
|
|
3,979
|
|
|
Leasehold improvements (e)
|
|
|
4,240
|
|
|
|
4,265
|
|
|
|
|
|
72,580
|
|
|
|
72,614
|
|
|
Less accumulated depreciation:
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|
|
|
|
|
|
|
|
|
Land
|
|
|
—
|
|
|
|
—
|
|
|
Buildings (b)
|
|
|
(10,944
|
)
|
|
|
(10,392
|
)
|
|
Machinery and equipment (a) (e)
|
|
|
(32,700
|
)
|
|
|
(31,192
|
)
|
|
Office furniture and equipment (c) (e)
|
|
|
(393
|
)
|
|
|
(546
|
)
|
|
Computer hardware and software (d) (e)
|
|
|
(3,082
|
)
|
|
|
(3,289
|
)
|
|
Leasehold improvements (e)
|
|
|
(1,966
|
)
|
|
|
(1,885
|
)
|
|
|
|
|
(49,085
|
)
|
|
|
(47,304
|
)
|
|
Property, plant and equipment—net
|
|
$
|
23,495
|
|
|
$
|
25,310
|
|
|
(a)
|
Included within machinery and equipment were assets under finance leases with costs of $2,275 and $2,275 and associated accumulated depreciation of $1,196 and $974 as of June 28, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended June 28, 2020 and June 30, 2019 was $109 and $142, respectively. The related depreciation expense for the six months ended March 29, 2020 and June 30, 2019 was $222 and $284, respectively.
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(b)
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Included within buildings are costs associated with Melbourne facility under finance leases of $9,082 and associated accumulated depreciation of $1,303 and $900 as of June 28, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended June 28, 2020 and June 30, 2019 was $201 and $201, respectively. The related depreciation expense for six months ended June 28, 2020 and June 30 29, 2019 was $403 and $402, respectively.
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(c)
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Included within office furniture and equipment were assets under finance leases with costs of $307 and associated accumulated depreciation of $85 and $52 as of June 28, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended June 28, 2020 and June 30, 2019 was $16 and $10, respectively. The related depreciation expense for the six months ended June 28, 2020 and June 30 29, 2019 was $33 and $20, respectively.
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(d)
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Included within computer hardware and software were assets under finance leases with costs of $91 and associated accumulated depreciation of $66 and $51 as of June 28, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended June 28, 2020 and June 30, 2019 was $8 and $8, respectively. The related depreciation expense for the six months ended June 28, 2020 and June 30, 2019 was $15 and $15, respectively.
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(e)
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Fully depreciated machinery and equipment with cost of $636 and accumulated amortization of $636 was written off in the six months ended June 28, 2020. Fully depreciated office furniture and fixtures with cost of $209 and accumulated amortization of $209 was written off. Fully depreciated computer hardware and software with cost of $414 and accumulated amortization of $414 was written off. Write off charges of $3 were incurred on leasehold improvements with cost of $185 and accumulated amortization of $182. These write off charges were incurred related to the closure of the Dongguan facility for those items not otherwise transferred to other manufacturing facilities.
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Intangible assets:
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
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Customer relationships
|
|
$
|
12,350
|
|
|
$
|
12,350
|
|
|
Order backlog
|
|
|
6,990
|
|
|
|
6,990
|
|
|
Trade name
|
|
|
1,300
|
|
|
|
1,300
|
|
|
Non-compete agreements
|
|
|
360
|
|
|
|
360
|
|
|
|
|
|
21,000
|
|
|
|
21,000
|
|
|
Less accumulated amortization:
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|
|
|
|
|
|
|
|
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Customer relationships
|
|
|
(2,031
|
)
|
|
|
(1,414
|
)
|
|
Order backlog
|
|
|
(6,990
|
)
|
|
|
(5,333
|
)
|
|
Trade name
|
|
|
(1,300
|
)
|
|
|
(1,300
|
)
|
|
Non-compete agreements
|
|
|
(296
|
)
|
|
|
(206
|
)
|
|
|
|
|
(10,617
|
)
|
|
|
(8,253
|
)
|
|
Intangible assets—net
|
|
$
|
10,383
|
|
|
$
|
12,747
|
|
These intangible assets arose from the acquisition of MC Assembly Holdings Inc. (“MC Assembly”) in November 2018 and were allocated to the following operating segments:
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
U.S.
|
|
$
|
3,115
|
|
|
$
|
3,824
|
|
|
Mexico
|
|
|
7,268
|
|
|
|
8,923
|
|
|
Total
|
|
$
|
10,383
|
|
|
$
|
12,747
|
|
Amortization expense of $2,364 is recorded in cost of sales in the consolidated statement of income and comprehensive income for the six months ended June 28, 2020, and $3,688 for the six months ended June 30, 2019. Amortization expense for the next five years and thereafter is as follows:
|
2020
|
|
$
|
682
|
|
|
2021
|
|
|
1,235
|
|
|
2022
|
|
|
1,235
|
|
|
2023
|
|
|
1,235
|
|
|
2024
|
|
|
1,235
|
|
|
2025 and thereafter
|
|
|
4,761
|
|
|
Total amortization
|
|
$
|
10,383
|
|
Goodwill:
The carrying value of goodwill as at June 28, 2020 was $18,165 (December 29, 2019 – $18,165). This goodwill arose from the acquisition of MC Assembly in November 2018 and was allocated to the following operating segments that are expected to benefit from the synergies of this business combination and has not changed since the acquisition:
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|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
U.S.
|
|
$
|
5,449
|
|
|
$
|
5,449
|
|
|
Mexico
|
|
|
12,716
|
|
|
|
12,716
|
|
|
Total
|
|
$
|
18,165
|
|
|
$
|
18,165
|
|
The carrying value of goodwill is assessed annually at year-end and at each reporting period for impairment triggers to determine whether there exists any indicators of impairment. The assessment is done at the operating segment level as the group of components (production facilities) within each operating segment all have similar economic characteristics. Our business operations have generally performed as expected during the first half of 2020. While the COVID-19 pandemic creates significant uncertainty, in the near term, the Company did not identify any triggering events as at June 28, 2020.
Accrued liabilities:
|
|
|
June 28,
2020
|
|
|
December 29,
2019
|
|
|
Payroll
|
|
$
|
6,029
|
|
|
$
|
5,504
|
|
|
Customer related
|
|
|
5,527
|
|
|
|
2,185
|
|
|
Deferred revenue
|
|
|
3,734
|
|
|
|
—
|
|
|
Vendor related
|
|
|
2,941
|
|
|
|
1,742
|
|
|
Professional services
|
|
|
760
|
|
|
|
612
|
|
|
Interest
|
|
|
402
|
|
|
|
860
|
|
|
Other
|
|
|
646
|
|
|
|
261
|
|
|
Total
|
|
$
|
20,039
|
|
|
$
|
11,164
|
|
Deferred Revenue is recorded when the Company invoices and becomes eligible to receive payment for goods or services prior to the transferring of goods or services to the customer under the terms of the contract (i.e., all revenue recognition criteria are not yet met), which is included within accrued liabilities. As of June 28, 2020 and December 29, 2019, the balance of deferred revenue was $3,734 and Nil, respectively. No revenue was recognized during the six months ended June 28, 2020. The accounts receivable balances associated with the deferred revenue invoicing was $3,734 as at June 28, 2020. Deferred revenue is recognized into revenue when all revenue recognition criteria are met.
Consolidated Statements of Operations and Comprehensive Income (Loss)
Interest expense:
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
June 28,
2020
|
|
|
June 30,
2019
|
|
|
Long-term debt
|
|
$
|
1,020
|
|
|
$
|
1,709
|
|
|
$
|
2,068
|
|
|
$
|
3,461
|
|
|
Revolving credit facility
|
|
|
482
|
|
|
|
597
|
|
|
|
1,034
|
|
|
|
1,216
|
|
|
Amortization of deferred financing fees
|
|
|
55
|
|
|
|
38
|
|
|
|
110
|
|
|
|
72
|
|
|
Amortization of debt issuance costs
|
|
|
239
|
|
|
|
236
|
|
|
|
478
|
|
|
|
473
|
|
|
Obligations under finance leases
|
|
|
188
|
|
|
|
220
|
|
|
|
380
|
|
|
|
448
|
|
|
Other interest
|
|
|
3
|
|
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
|
Total
|
|
$
|
1,987
|
|
|
$
|
2,800
|
|
|
$
|
4,080
|
|
|
$
|
5,670
|
|
|