| Interim Consolidated Financial Statement Details |
|
3.
|
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:
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
Trade accounts receivable
|
|
$
|
75,000
|
|
|
$
|
71,113
|
|
|
Other receivables
|
|
|
731
|
|
|
|
1,098
|
|
|
Allowance for doubtful accounts
|
|
|
(2,325
|
)
|
|
|
(2,292
|
)
|
|
Total
|
|
$
|
73,406
|
|
|
$
|
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 of the restructuring. To date, there has been no material impact of the COVID-19 pandemic on the allowance for doubtful accounts.
Unbilled contract assets
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
Opening
|
|
$
|
26,271
|
|
|
$
|
20,405
|
|
|
Contract assets additions
|
|
|
276,330
|
|
|
|
350,709
|
|
|
Contract assets invoiced
|
|
|
(259,865
|
)
|
|
|
(344,843
|
)
|
|
Ending
|
|
$
|
42,736
|
|
|
$
|
26,271
|
|
Inventories:
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
Raw materials
|
|
$
|
51,783
|
|
|
$
|
48,067
|
|
|
Parts and other
|
|
|
292
|
|
|
|
586
|
|
|
Provision for obsolescence
|
|
|
(538
|
)
|
|
|
(827
|
)
|
|
Total
|
|
$
|
51,537
|
|
|
$
|
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 of the restructuring.
Property, plant and equipment – net:
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
1,648
|
|
|
$
|
1,648
|
|
|
Buildings (b)
|
|
|
18,985
|
|
|
|
18,985
|
|
|
Machinery and equipment (a) (e)
|
|
|
44,116
|
|
|
|
42,732
|
|
|
Office furniture and equipment (c) (e)
|
|
|
869
|
|
|
|
1,005
|
|
|
Computer hardware and software (d) (e)
|
|
|
3,940
|
|
|
|
3,979
|
|
|
Leasehold improvements (e)
|
|
|
4,447
|
|
|
|
4,265
|
|
|
|
|
|
74,005
|
|
|
|
72,614
|
|
|
Less accumulated depreciation:
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
—
|
|
|
|
—
|
|
|
Buildings (b)
|
|
|
(11,220
|
)
|
|
|
(10,392
|
)
|
|
Machinery and equipment (a) (e)
|
|
|
(33,727
|
)
|
|
|
(31,192
|
)
|
|
Office furniture and equipment (c) (e)
|
|
|
(423
|
)
|
|
|
(546
|
)
|
|
Computer hardware and software (d) (e)
|
|
|
(3,162
|
)
|
|
|
(3,289
|
)
|
|
Leasehold improvements (e)
|
|
|
(2,076
|
)
|
|
|
(1,885
|
)
|
|
|
|
|
(50,608
|
)
|
|
|
(47,304
|
)
|
|
Property, plant and equipment—net
|
|
$
|
23,397
|
|
|
$
|
25,310
|
|
|
(a)
|
Included within machinery and equipment were assets under finance leases with costs of $4,193 and $2,275 and associated accumulated depreciation of $1,539 and $974 as of September 27, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended September 27, 2020 and September 29, 2019 was $134 and $142, respectively. The related depreciation expense for the nine months ended September 27, 2020 and September 29, 2019 was $356 and $426, 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 $1,504 and $900 as of September 27, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended September 27, 2020 and September 29, 2019 was $201 and $201, respectively. The related depreciation expense for nine months ended September 27, 2020 and September 29, 2019 was $604 and $603, 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 $307 and associated accumulated depreciation of $101 and $52 as of September 27, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended September 27, 2020 and September 29, 2019 was $16 and $9, respectively. The related depreciation expense for the nine months ended September 27, 2020 and September 29, 2019 was $49 and $29, respectively.
|
|
(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 $73 and $51 as of September 27, 2020 and December 29, 2019, respectively. The related depreciation expense for the three months ended September 27, 2020 and September 29, 2019 was $7 and $8, respectively. The related depreciation expense for the nine months ended September 27, 2020 and September 29, 2019 was $22 and $23, respectively.
|
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(e)
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Fully depreciated property, plant and equipment with cost of $1,466 and accumulated amortization of $1,463 was written off in the nine months ended September 27, 2020.
|
Intangible assets:
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
|
(2,340
|
)
|
|
|
(1,414
|
)
|
|
Order backlog
|
|
|
(6,990
|
)
|
|
|
(5,333
|
)
|
|
Trade name
|
|
|
(1,300
|
)
|
|
|
(1,300
|
)
|
|
Non-compete agreements
|
|
|
(341
|
)
|
|
|
(206
|
)
|
|
|
|
|
(10,971
|
)
|
|
|
(8,253
|
)
|
|
Intangible assets—net
|
|
$
|
10,029
|
|
|
$
|
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:
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
U.S.
|
|
$
|
3,009
|
|
|
$
|
3,824
|
|
|
Mexico
|
|
|
7,020
|
|
|
|
8,923
|
|
|
Total
|
|
$
|
10,029
|
|
|
$
|
12,747
|
|
Amortization expense of $2,718 was recorded in cost of sales in the consolidated statement of operations and comprehensive income(loss) for the nine months ended September 27, 2020, and $5,532 for the nine months ended September 29, 2019. Amortization expense for the next five years and thereafter is as follows:
|
2020
|
|
$
|
328
|
|
|
2021
|
|
|
1,235
|
|
|
2022
|
|
|
1,235
|
|
|
2023
|
|
|
1,235
|
|
|
2024
|
|
|
1,235
|
|
|
2025 and thereafter
|
|
|
4,761
|
|
|
Total amortization
|
|
$
|
10,029
|
|
Goodwill:
The carrying value of goodwill as at September 27, 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:
|
|
|
September 27,
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 nine months of 2020. While the COVID-19 pandemic creates significant uncertainty, in the near term, the Company did not identify any triggering events as at September 27, 2020.
Accrued liabilities:
|
|
|
September 27,
2020
|
|
|
December 29,
2019
|
|
|
Payroll
|
|
$
|
7,515
|
|
|
$
|
5,504
|
|
|
Customer related
|
|
|
6,347
|
|
|
|
2,185
|
|
|
Deferred revenue
|
|
|
5,915
|
|
|
|
—
|
|
|
Vendor related
|
|
|
1,436
|
|
|
|
1,742
|
|
|
Professional services
|
|
|
644
|
|
|
|
612
|
|
|
Interest
|
|
|
330
|
|
|
|
860
|
|
|
Other
|
|
|
938
|
|
|
|
261
|
|
|
Total
|
|
$
|
23,125
|
|
|
$
|
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 September 27, 2020 and December 29, 2019, the balance of deferred revenue was $5,915 and Nil, respectively. Revenue of $899 was recognized during the nine months ended September 27, 2020. The accounts receivable balances associated with the deferred revenue invoicing was $5,915 as at September 27, 2020 with no corresponding deferred revenue invoices in accounts receivable as at December 29, 2019. 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
|
|
|
Nine months ended
|
|
|
|
|
September 27,
2020
|
|
|
September 29,
2019
|
|
|
September 27,
2020
|
|
|
September 29,
2019
|
|
|
Long-term debt
|
|
$
|
1,012
|
|
|
$
|
1,135
|
|
|
$
|
3,080
|
|
|
$
|
4,596
|
|
|
Revolving credit facility
|
|
|
415
|
|
|
|
597
|
|
|
|
1,449
|
|
|
|
1,813
|
|
|
Amortization of deferred financing fees
|
|
|
59
|
|
|
|
50
|
|
|
|
169
|
|
|
|
122
|
|
|
Amortization of debt issuance costs
|
|
|
245
|
|
|
|
705
|
|
|
|
723
|
|
|
|
1,178
|
|
|
Obligations under finance leases
|
|
|
195
|
|
|
|
192
|
|
|
|
575
|
|
|
|
640
|
|
|
Other interest
|
|
|
15
|
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
Total
|
|
$
|
1,941
|
|
|
$
|
2,679
|
|
|
$
|
6,021
|
|
|
$
|
8,349
|
|
|