Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Segmented information

v2.4.0.8
Note 8 - Segmented information
 6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
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 China. The Company ceased production at the Canadian facility 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:


   

Three months ended  

   

Six months ended

 
   

June 30,

2013 

   

July 1,
2012

   

June 30,

2013 

   

July 1,
2012

 

Revenues

                               

Mexico

  $ 42,806     $ 42,667     $ 91,674     $ 84,769  

Asia

    11,901       15,854       23,683       27,241  

Canada

    6,723       10,563       12,703       19,055  

U.S.

    11,722       12,236       22,226       25,612  

Total

  $ 73,152     $ 81,320     $ 150,286     $ 156,677  
                                 

Intersegment revenue

                               

Mexico

  $ (194 )   $ (1,279 )   $ (5,055 )   $ (2,248 )

Asia

    (1,064 )     (1,160 )     (3,483 )     (1,915 )

Canada

    (1,417 )     (2,058 )     (2,541 )     (2,803 )

U.S.

    (5,581 )     (1,706 )     (8,864 )     (2,137 )

Total

  $ (8,256 )   $ (6,203 )   $ (19,943 )   $ (9,103 )
                                 

Net external revenue

                               

Mexico

  $ 42,612     $ 41,388     $ 86,619     $ 82,521  

Asia

    10,837       14,694       20,200       25,326  

Canada

    5,306       8,505       10,162       16,252  

U.S.

    6,141       10,530       13,362       23,475  

Total

  $ 64,896     $ 75,117     $ 130,343     $ 147,574  
                                 

Adjusted EBITDA

                               

Mexico

  $ (1,736 )   $ 2,905     $ 794     $ 6,940  

Asia

    335       735       870       1,421  

Canada

    (2,149 )     (650 )     (2,131 )     (1,662 )

U.S.

    105       1,321       361       1,920  

Total

  $ (3,445 )   $ 4,311     $ (106 )   $ 8,619  
                                 

Interest

    445       542       829       1,005  

Restructuring charges

    702       —       1,154       451  

Depreciation

    1,008       772       1,917       1,524  

Earnings (loss) before income taxes

  $ (5,600 )   $ 2,997     $ (4,006 )   $ 5,639  

Additions and Disposals to Property, Plant and Equipment


The following table contains additions and disposals to property, plant and equipment for the three and six months ended June 30, 2013 and July 1, 2012:


   

Three months ended

   

Six months ended

 
   

June 30,

2013 

   

July 1,
2012

   

June 30,

2013

   

July 1,
2012  

 

Mexico

  $ 510     $ 435     $ 921     $ 1,704  

Asia

    79       1,673       422       1,676  

Canada

    (1,288 )     90       (1,214 )     591  

U.S.

    125       92       191       418  
                                 

Total

  $ (574 )   $ 2,290     $ 320     $ 4,389  

Long-lived assets (a)


   

June 30,

2013 

   

December 30,

2012 

 

Mexico

  $ 10,767     $ 10,725  

Asia

    3,770       3,690  

Canada

    2,089       2,730  

U.S.

    2,141       2,265  

Total

  $ 18,767     $ 19,410  

 

(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 June 30, 2013 and July 1, 2012:


   

Three months ended  

   

Six months ended

 
   

June 30,

2013 

   

July 1,
2012  

   

June 30,

2013 

   

July 1,
2012

 

U.S.

  $ 54,356     $ 54,989     $ 104,422     $ 105,201  

Canada

    7,092       15,520       18,778       33,007  

Europe

    1,378       4,474       2,805       8,984  

Asia

    2,061       127       4,308       334  

Mexico

    9       7       30       48  

Total

  $ 64,896     $ 75,117     $ 130,343     $ 147,574  

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 June 30, 2013, one customer individually comprised 37.5% (July 1, 2012 – two customers individually comprised 31.8% and 16.4%) of total revenue across all geographic segments. During the six months ended June 30, 2013 two customers individually comprised 37.5% and 10.1% (July 1, 2012 – two customers individually comprised 33.0% and 14.6%) of total revenue across all geographic segments. As of June 30, 2013, these customers represented 28.6%, and 14.2%, respectively, (As of December 30, 2012, these customers represented 29.4% and 9.9%, respectively) of the Company’s accounts receivable.