Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Segmented information

v2.4.0.8
Note 8 - Segmented information
 9 Months Ended
Sep. 29, 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

   

Nine months ended

 
   

September 29, 

2013

   

September 30,

2012

   

September 29,

2013

   

September 30,

2012

 

Revenues

                               

Mexico

  $ 48,701     $ 49,284     $ 140,375     $ 134,052  

Asia

    19,816       10,680       43,499       37,921  

Canada

    396       10,322       13,099       29,377  

U.S.

    13,327       16,078       35,553       41,690  

Total

  $ 82,240     $ 86,364     $ 232,526     $ 243,040  

Intersegment revenue

                               

Mexico

  $ (170 )   $ (235 )   $ (5,225 )   $ (2,483 )

Asia

    (1,745 )     (380 )     (5,230 )     (2,295 )

Canada

    —       (2,211 )     (2,539 )     (5,014 )

U.S.

    (7,432 )     (7,964 )     (16,296 )     (10,101 )

Total

  $ (9,347 )   $ (10,789 )   $ (29,290 )   $ (19,892 )

Net external revenue

                               

Mexico

  $ 48,531     $ 49,049     $ 135,150     $ 131,570  

Asia

    18,071       10,300       38,269       35,626  

Canada

    396       8,111       10,560       24,363  

U.S.

    5,895       8,114       19,257       31,589  

Total

  $ 72,893     $ 75,575     $ 203,236     $ 223,149  

Adjusted EBITDA

                               

Mexico

  $ 574     $ 3,214     $ 1,368     $ 10,154  

Asia

    1,632       101       2,502       1,522  

Canada

    (71 )     (1,560 )     (2,202 )     (3,222 )

U.S.

    71       801       432       2,721  

Total

  $ 2,206     $ 2,556     $ 2,100     $ 11,175  

Interest

    432       526       1,261       1,531  

Restructuring charges

    289       —       1,443       451  

Depreciation

    901       786       2,818       2,310  

Earnings (loss) before income taxes

  $ 584     $ 1,244     $ (3,422 )   $ 6,883  

Additions and Disposals to Property, Plant and Equipment


The following table contains additions and disposals to property, plant and equipment for the three and nine months ended September 29, 2013 and September 30, 2012:


   

Three months ended

   

Nine months ended

 
   

September

29, 2013

   

September

30, 2012

   

September

29, 2013

   

September

30, 2012

 

Mexico

  $ 892     $ 187     $ 1,813     $ 1,891  

Asia

    5       143       426       1,819  

Canada

    (21,021 )     43       (22,234 )     634  

U.S.

    51       140       242       558  
                                 

Total

  $ (20,073 )   $ 513     $ (19,753 )   $ 4,902  

Long-lived assets (a)


   

September

29, 2013

   

December

30, 2012

 

Mexico

  $ 12,545     $ 10,725  

Asia

    3,654       3,690  

Canada

    419       2,730  

U.S.

    2,222       2,265  

Total

  $ 18,840     $ 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 nine months ended September 29, 2013 and September 30, 2012:


   

Three months ended

   

Nine months ended

 
   

September 29,

2013

   

September 30,
2012

   

September 29,

2013

   

September 30,
2012

 

U.S.

  $ 61,336     $ 53,341     $ 165,758     $ 158,542  

Canada

    8,981       20,539       27,759       53,546  

Europe

    47       1,576       2,852       10,560  

Asia

    2,524       115       6,832       449  

Mexico

    5       4       35       52  

Total

  $ 72,893     $ 75,575     $ 203,236     $ 223,149  

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 September 29, 2013, two customers individually comprised 40.1% and 12.2% (September 30, 2012 – two customers individually comprised 36.6% and 11.1%) of total revenue across all geographic segments. During the nine months ended September 29, 2013 two customers individually comprised 38.4% and 10.8% (September 30, 2012 – two customers individually comprised 34.3% and 13.4%) of total revenue across all geographic segments. As of September 29, 2013, these customers represented 24.9%, and 13.6%, respectively, (as of December 30, 2012, these customers represented 29.4% and 9.9%, respectively) of the Company’s accounts receivable.