Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Segmented Information

v2.4.0.8
Note 8 - Segmented Information
 3 Months Ended
Mar. 30, 2014
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, Mexico, Canada and China. 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

 
   

March 30, 2014

   

March 31, 2013

 

Revenues

               

Mexico

  $ 38,757     $ 48,868  

Asia

    15,530       11,782  

Canada

    -       5,980  

U.S.

    12,692       10,504  

Total

  $ 66,979     $ 77,134  

Intersegment revenue

               

Mexico

  $ (365 )   $ (4,861 )

Asia

    (3,266 )     (2,419 )

Canada

    -       (1,124 )

U.S.

    (5,325 )     (3,283 )

Total

  $ (8,956 )   $ (11,687 )

Net external revenue

               

Mexico

  $ 38,392     $ 44,007  

Asia

    12,264       9,363  

Canada

    -       4,856  

U.S.

    7,367       7,221  

Total

  $ 58,023     $ 65,447  

Adjusted EBITDA

               

Mexico

  $ (482 )   $ 2,530  

Asia

    1,426       535  

Canada

    (170 )     18  

U.S.

    496       256  

Total

  $ 1,270     $ 3,339  

Interest

    394       384  

Restructuring charges

    670       452  

Depreciation

    1,128       909  

Earnings (loss) before income taxes

  $ (922 )   $ 1,594  

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 March 30, 2014:


   

Three months ended

 
   

March 30, 2014

   

March 31, 2013

 

Mexico

  $ 177     $ 411  

Asia

    -       343  

Canada

    20       74  

U.S.

    55       66  

Total

  $ 252     $ 894  

           Long-lived assets (a)


   

March 30,

2014

   

December 29,

2013

 

Mexico

  $ 11,674     $ 12,236  

Asia

    3,375       3,534  

Canada

    341       399  

U.S.

    1,953       2,050  

Total

  $ 17,343     $ 18,219  

 

(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 months ended March 30, 2014 and March 31, 2013:  


   

Three months ended

 
   

March 30,

2014

   

March 31,

2013

 

U.S.

  $ 52,283     $ 50,066  

Canada

    4,375       11,686  

Europe

    284       1,427  

Asia

    1,077       2,247  

Mexico

    4       21  

Total

  $ 58,023     $ 65,447  

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 March 30, 2014, three customers exceeded 10% of total revenues, comprising 36.1%, 13.6% and 10.6%, respectively of total revenue across all geographic segments. For the three months ended March 31, 2013, two customers exceeded 10% of total revenues at 37.5% and 10.2%, respectively. As of March 30, 2014, these three customers represented 22.0%, 19.0% and 16.0%, respectively (December 29, 2013, 22.3%, 17.7% and 12.3% respectively) of the Company’s trade accounts receivable.