Annual report pursuant to Section 13 and 15(d)

Note 3 - Consolidated Financial Statement Details

v3.7.0.1
Note 3 - Consolidated Financial Statement Details
12 Months Ended
Jan. 01, 2017
Notes to Financial Statements  
Condensed Financial Statements [Text Block]
3.
Consolidated financial statement details
 
The following consolidated financial statement details are presented as of the period end dates indicated for the consolidated balance sheets and for each of the periods indicated for the consolidated statements of operations and comprehensive loss.
 
Consolidated balance sheets
 
 
Restricted cash – guaranteed deposits
 
 
 
January
1
,
201
7
 
 
January 3,
2016
 
Restricted cash – guaranteed deposits
  $
    $
805
 
 
Effective
January
1,
2017,
no cash balance was restricted as expected imports of raw materials inventory related to
one
customer were reduced. Restricted cash as at
January
3,
2016
pertained to deposits which were restricted in the form of a guarantee to a government agency related to estimated value added taxes (VAT) on imported raw materials inventory for specific customers in Suzhou, China. Typically, the cash is restricted for a contractual term of
12
months or less and is released when the finished goods are exported or the expected imported raw materials are cancelled.
 
Accounts receivable—net:
 
 
 
January
1
,
2017
 
 
January 3,
2016
 
Trade accounts receivable
  $
22,284
    $
28,797
 
Other receivables
   
511
     
1,347
 
Allowance for doubtful accounts
   
(171
)
   
(259
)
Accounts receivable—net
  $
22,624
    $
29,885
 
 
Inventories:
 
 
 
January
1
,
201
7
 
 
January 3,
2016
 
Raw materials
  $
14,863
    $
19,385
 
Work in process
   
1,557
     
1,416
 
Finished goods
   
3,678
     
4,400
 
Parts and other
   
576
     
676
 
Inventories
  $
20,674
    $
25,877
 
 
Inventories are recorded net of a provision for obsolescence as at
January
1,
2017
and
January
3,
2016
of
$442
and
$673
respectively.
 
 
 
Property, plant and equipment—net:
 
 
 
January
1
,
201
7
 
 
January 3,
2016
 
Cost (a) (e):
               
Land
  $
1,648
    $
1,648
 
Buildings
   
9,852
     
9,852
 
Machinery and equipment (b) (d)
   
31,615
     
30,707
 
Office furniture and equipment
   
556
     
599
 
Computer hardware and software (c)
   
3,544
     
3,447
 
Leasehold improvements
   
2,129
     
3,232
 
     
49,344
     
49,485
 
                 
Less accumulated depreciation (a):
               
Land
   
     
 
Buildings
   
(8,174
)
   
(7,719
)
Machinery and equipment (b) (d)
   
(22,460
)
   
(20,347
)
Office furniture and equipment
   
(438
)
   
(496
)
Computer hardware and software (c)
   
(2,842
)
   
(2,284
)
Leasehold improvements
   
(993
)
   
(2,196
)
     
(34,907
)
   
(33,042
)
Property, plant and equipment—net
  $
14,437
    $
16,443
 
 
(a)
During
2016,
the Company wrote off fully depreciated assets that were no longer in use with a cost and accumulated depreciation of
$2,118.
 
(b)
At
January
1,
2017
and
January
3,
2016,
included within machinery and equipment were assets under capital leases with costs of
$2,193
and
$2,528,
respectively and associated accumulated depreciation of
$673
and
$865,
respectively. The related depreciation expense for the years ended
January
1,
2017,
January
3,
2016
and
December
28,
2014
was
$311,
$417
and
$694,
respectively.
 
(c) At
January
1,
2017
and
January
3,
2016,
included within computer hardware and software were assets under capital leases with costs of
$83
and
$119,
respectively and associated accumulated depreciation of
$80
and
$86
respectively. The related depreciation expense for the years ended
January
1,
2017,
January
3,
2016
and
December
28,
2014
was
$29,
$49
and
$151,
respectively.
   
(d) On
June
24,
2016
we sold certain equipment for
$509.
  Concurrent with the sale, we leased the equipment back for a period of
35
months. The monthly lease payments are
$15
and includes a purchase option at the end of the lease term equivalent to
one
month’s rent. The net book value of the leased equipment was
$487
million at
July
3,
2016
and is included within machinery and equipment.  Additionally, we have recorded the proceeds of
$509
 received from the transaction as a financing obligation at
July
3,
2016
net of initial deposits made. The capital lease obligation related to this sale leaseback is
$492
as at
July
3,
2016.
   
(e)
In accordance with ASC
360
-
10,
the Company is required to evaluate for impairment when events or changes in circumstances indicate that the carrying value of such assets
may
not be recoverable.  Upon the occurrence of a triggering event, the Company assesses whether the estimated undiscounted cash flows expected from the use of the asset and the residual value from the ultimate disposal of the asset exceeds the carrying value. In the
fourth
quarter of
2016,
the Company identified a triggering event related to its U.S. segment asset group, which has a carrying amount of
$2,339.
  The Company estimated undiscounted cash flows and determined recoverable amount was in excess of the carrying value, therefore
no
impairment loss has been recorded in
2016.
  However, the estimate of undiscounted cash flows is sensitive to certain key assumptions included in these cash flows, such as revenue and margins.  As such, the Company will continue to review for impairment triggers which
may
result in a need to write down those assets to fair value in the future.  
 
Accrued liabilities:
 
 
 
January
1
,
2017
 
 
January 3,
2016
 
Customer-related
  $
898
    $
1,852
 
Payroll
   
2,134
     
2,649
 
Professional services
   
281
     
367
 
Restructuring
   
27
     
 
Vendor related
   
613
     
383
 
Other
   
651
     
311
 
Accrued liabilities
  $
4,604
    $
5,562
 
 
Consolidated statements of operations and comprehensive loss
 
Interest expense, net:
 
 
 
Year ended
January
1
,
201
7
 
 
Year ended
January 3,
2016
 
 
Year ended
December 28,
2014
 
                         
Long-term debt
  $
222
    $
    $
 
Revolving credit facility
   
465
     
1,040
     
1,122
 
Amortization of deferred financing costs
   
69
     
32
     
385
 
Obligations under capital leases
   
67
     
116
     
212
 
Interest earned on cash deposits
   
(35
)    
(5
)    
(26
)
                         
Interest expense, net
  $
788
    $
1,183
    $
1,693