Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Segmented Information

v3.8.0.1
Note 9 - Segmented Information
3 Months Ended
Apr. 01, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
9.
Segmented information
 
 
General description
 
The Company is operated and managed geographically and has production facilities in the United States, Mexico and China. The Company utilizes reportable segment’s site contribution (site revenues minus operating expenses, excluding unrealized foreign exchange, corporate allocations and restructuring expenses) to monitor reportable segment performance. Site contribution is utilized by the chief operating decision-maker as the indicator of reportable segment performance, as it reflects costs which our operating site management is directly responsible for. Intersegment adjustments reflect intersegment sales that are generally recorded at prices that approximate arm’s-length transactions. In assessing the performance of the reportable segments, management attributes site revenue to the reportable segment that ships the product to the customer, irrespective of the product’s destination. Information about the reportable segments is as follows:
 
   
Three months ended
 
   
April
1
, 201
8
   
April
2
, 201
7
 
Revenues
 
 
 
 
 
 
 
 
Mexico
  $
29,073
    $
22,491
 
China
   
5,233
     
8,322
 
U.S.
   
5,255
     
4,982
 
Total
  $
39,561
    $
35,795
 
Intersegment revenue
 
 
 
 
 
 
 
 
Mexico
  $
(120
)   $
(12
)
China
   
(2,227
)    
(2,511
)
U.S.
   
(94
)    
(94
)
Total
  $
(2,441
)   $
(2,617
)
Net external revenue
 
 
 
 
 
 
 
 
Mexico
  $
28,953
    $
22,479
 
China
   
3,006
     
5,811
 
U.S.
   
5,161
     
4,888
 
Total segment revenue (which also equals consolidated revenue)
  $
37,120
    $
33,178
 
Site Contribution
 
 
 
 
 
 
 
 
Mexico
  $
2,506
    $
1,347
 
China
   
128
     
425
 
U.S.
   
23
     
(435
)
Total
  $
2,657
    $
1,337
 
Corporate allocations
   
2,635
     
2,814
 
Unrealized foreign exchange gain on unsettled forward exchange contracts
   
(319
)    
(1,272
)
Interest
   
307
     
179
 
Income (loss) before income taxes
  $
34
    $
(384
)
 
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
months ended:
 
   
Three months ended
 
   
April
1
, 201
8
   
April
2
, 201
7
 
Mexico
  $
88
    $
155
 
China
   
     
66
 
U.S.
   
6
     
75
 
Segment total
   
94
     
296
 
Corporate and other
   
3
     
5
 
Total
  $
97
    $
301
 
    
Property, plant and equipment
(a)
 
   
April
1
, 201
8
   
December
3
1, 2017
 
Mexico
  $
7,058
    $
7,518
 
China
   
1,262
     
1,380
 
U.S
   
1,110
     
1,188
 
Segment total
   
9,430
     
10,086
 
Corporate and other
   
162
     
183
 
Segment assets
  $
9,592
    $
10,269
 
 
 
(a)
Property, plant and equipment 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
months ended
April 1, 2018
and
April 2, 2017:
 
   
Three months ended
 
   
April
1
, 201
8
   
April
2
, 201
7
 
U.S.
  $
30,130
    $
25,938
 
Canada
   
5,161
     
5,422
 
China
   
1,829
     
1,311
 
Africa
   
     
507
 
Total
  $
37,120
    $
33,178
 
 
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
April 1, 2018,
four
customers exceeded
10%
of total revenues, comprising of
45.8%
of total revenue across all geographic segments. During the
three
months ended
April 2, 2017,
one
customer exceeded
10%
of total revenues, comprising of
10.7%
of total revenue across all geographic segments.
 
As of
April 1, 2018,
two
customers represented
20%
and
14%
(
December 31, 2017,
three
customers represented
14%,
14%
and
12%,
respectively of the Company’s trade accounts receivable.
No
other customers exceeded
10%
of the Company’s trade accounts receivable.