Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.20.2
Segment Information
6 Months Ended
Jun. 28, 2020
Segment Reporting [Abstract]  
Segmented Information

8.

Segmented information

General description

During the six months ended June 28, 2020, the Company operated and managed by geographic region in the United States, Mexico and China, which are our operating and reportable segments. Commencing in the three months ended June 28, 2020, China is no longer included as a reportable segment.  During the three months ended March 29, 2020, the Company completed final shipments for customers serviced in our Chinese manufacturing facility and the relocation of the equipment to our other North American sites. We utilize each reportable segment’s contribution (revenue minus operating expenses, excluding unrealized foreign exchange gain (loss) on unsettled forward foreign exchange contracts, corporate allocations and restructuring expenses) to monitor reportable segment performance. Contribution by country is utilized by the chief operating decision-maker (defined as the Chief Executive Officer) as the indicator of reportable segment performance, as it reflects costs which our operating segment management are 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

 

 

Six months ended

 

 

 

June 28,

2020

 

 

June 30,

2019

 

 

June 28,

2020

 

 

June 30,

2019

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

58,801

 

 

$

59,336

 

 

$

122,165

 

 

$

125,096

 

China

 

 

 

 

 

5,793

 

 

 

4,207

 

 

 

14,449

 

U.S.

 

 

32,136

 

 

 

29,211

 

 

 

65,517

 

 

 

59,022

 

Total

 

$

90,937

 

 

$

94,340

 

 

$

191,889

 

 

$

198,567

 

Intersegment revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

(147

)

 

$

(594

)

 

$

(2,569

)

 

$

(743

)

China

 

 

 

 

 

(2,681

)

 

 

(3,303

)

 

 

(4,107

)

U.S.

 

 

(384

)

 

 

(129

)

 

 

(473

)

 

 

(132

)

Total

 

$

(531

)

 

$

(3,404

)

 

$

(6,345

)

 

$

(4,982

)

Net external revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

58,654

 

 

$

58,742

 

 

$

119,596

 

 

$

124,353

 

China

 

$

 

 

 

3,112

 

 

$

904

 

 

 

10,342

 

U.S.

 

 

31,752

 

 

 

29,082

 

 

 

65,044

 

 

 

58,890

 

Total segment revenue (which also equals

   consolidated revenue)

 

$

90,406

 

 

$

90,936

 

 

$

185,544

 

 

$

193,585

 

Segment contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

$

5,088

 

 

$

5,835

 

 

$

10,963

 

 

$

10,641

 

China

 

$

 

 

 

844

 

 

 

(2

)

 

 

1,699

 

U.S.

 

 

2,270

 

 

 

1,764

 

 

 

5,231

 

 

 

3,187

 

Total

 

$

7,358

 

 

$

8,443

 

 

$

16,192

 

 

$

15,527

 

Corporate expenses

 

 

4,750

 

 

 

6,006

 

 

 

10,652

 

 

 

11,265

 

Restructuring charges (recovery)

 

 

(125

)

 

 

1,546

 

 

 

(346

)

 

 

2,170

 

Change in fair value of warrant liability

 

 

399

 

 

 

40

 

 

 

(118

)

 

 

(61

)

Change in fair value of contingent

   consideration

 

 

 

 

 

 

 

 

 

 

 

(3,050

)

Unrealized foreign exchange loss on unsettled

   forward exchange contracts

 

 

(971

)

 

 

 

 

 

(459

)

 

 

 

Interest expense

 

 

1,987

 

 

 

2,800

 

 

 

4,080

 

 

 

5,670

 

Income(loss) before income taxes

 

$

1,318

 

 

$

(1,949

)

 

$

2,383

 

 

$

(467

)

 

Three months ended June 28, 2020

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Test and Measurement

 

$

4,220

 

 

$

9,718

 

 

$

 

 

$

13,938

 

Retail and Payment Systems

 

 

6,750

 

 

 

 

 

 

 

 

 

6,750

 

Telecom, Networking and Communications

 

 

1,764

 

 

 

3,223

 

 

 

 

 

 

4,987

 

Medical and Safety

 

 

7,863

 

 

 

2,298

 

 

 

 

 

 

10,161

 

Industrial, Power and Clean Technology

 

 

30,952

 

 

 

7,339

 

 

 

 

 

 

38,291

 

Semiconductors

 

 

7,105

 

 

 

 

 

 

 

 

 

7,105

 

Avionics, Aerospace and Defense

 

 

 

 

 

9,174

 

 

 

 

 

 

9,174

 

Segment Revenue

 

 

58,654

 

 

 

31,752

 

 

 

 

 

 

90,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by category

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Point in time

 

$

551

 

 

$

1,353

 

 

 

 

 

 

1,904

 

Over time

 

 

58,103

 

 

 

30,399

 

 

 

 

 

 

88,502

 

Total Revenue

 

 

58,654

 

 

 

31,752

 

 

 

 

 

 

90,406

 

 

 

Three months ended June 30, 2019

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Test and Measurement

 

$

2,403

 

 

$

9,648

 

 

$

 

 

$

12,051

 

Retail and Payment Systems

 

 

12,149

 

 

 

 

 

 

 

 

 

12,149

 

Telecom, Networking and Communications

 

 

3,503

 

 

 

2,314

 

 

 

2,200

 

 

 

8,017

 

Medical and Safety

 

 

8,093

 

 

 

3,104

 

 

 

47

 

 

 

11,244

 

Industrial, Power and Clean Technology

 

 

26,845

 

 

 

9,178

 

 

 

865

 

 

 

36,888

 

Semiconductors

 

 

5,749

 

 

 

16

 

 

 

 

 

 

5,765

 

Avionics, Aerospace and Defense

 

 

 

 

 

4,822

 

 

 

 

 

 

4,822

 

Segment Revenue

 

 

58,742

 

 

 

29,082

 

 

 

3,112

 

 

 

90,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by category

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Point in time

 

$

781

 

 

$

1,386

 

 

$

73

 

 

 

2,240

 

Over time

 

 

57,961

 

 

 

27,696

 

 

 

3,039

 

 

 

88,696

 

Total Revenue

 

 

58,742

 

 

 

29,082

 

 

 

3,112

 

 

 

90,936

 

 

 

Six months ended June 28, 2020

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Test and Measurement

 

$

8,404

 

 

$

17,766

 

 

$

 

 

$

26,170

 

Retail and Payment Systems

 

 

19,073

 

 

 

 

 

 

 

 

 

19,073

 

Telecom, Networking and Communications

 

 

4,799

 

 

 

7,014

 

 

 

714

 

 

 

12,527

 

Medical and Safety

 

 

16,426

 

 

 

4,875

 

 

 

130

 

 

 

21,431

 

Industrial, Power and Clean Technology

 

 

58,473

 

 

 

15,830

 

 

 

60

 

 

 

74,363

 

Semiconductors

 

 

12,421

 

 

 

 

 

 

 

 

 

12,421

 

Avionics, Aerospace and Defense

 

 

 

 

 

19,559

 

 

 

 

 

 

19,559

 

Segment Revenue

 

 

119,596

 

 

 

65,044

 

 

 

904

 

 

 

185,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by category

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Point in time

 

$

1,050

 

 

$

2,420

 

 

$

452

 

 

 

3,922

 

Over time

 

 

118,546

 

 

 

62,624

 

 

 

452

 

 

 

181,622

 

Total Revenue

 

 

119,596

 

 

 

65,044

 

 

 

904

 

 

 

185,544

 

 

 

Six months ended June 30, 2019

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Test and Measurement

 

$

4,434

 

 

$

20,654

 

 

$

 

 

$

25,088

 

Retail and Payment Systems

 

 

25,078

 

 

 

 

 

 

 

 

 

25,078

 

Telecom, Networking and Communications

 

 

7,507

 

 

 

4,391

 

 

 

6,884

 

 

 

18,782

 

Medical and Safety

 

 

16,501

 

 

 

6,756

 

 

 

441

 

 

 

23,698

 

Industrial, Power and Clean Technology

 

 

57,779

 

 

 

15,271

 

 

 

3,017

 

 

 

76,067

 

Semiconductors

 

 

13,054

 

 

 

16

 

 

 

 

 

 

13,070

 

Avionics, Aerospace and Defense

 

 

 

 

 

11,802

 

 

 

 

 

 

11,802

 

Segment Revenue

 

 

124,353

 

 

 

58,890

 

 

 

10,342

 

 

 

193,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by category

 

Mexico

 

 

U.S.

 

 

China

 

 

Total

 

Point in time

 

$

1,216

 

 

$

3,098

 

 

$

76

 

 

 

4,390

 

Over time

 

 

123,137

 

 

 

55,792

 

 

 

10,266

 

 

 

189,195

 

Total Revenue

 

 

124,353

 

 

 

58,890

 

 

 

10,342

 

 

 

193,585

 

 

 

Certain customers were reclassified from the Test and Measurement sector to the Industrial IoT, Power and Clean Technology sector during the three months ended June 28, 2020.  The comparative periods have been adjusted to conform to this classification.

 

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 and six months ended:

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 28,

2020

 

 

June 30,

2019

 

 

June 28,

2020

 

 

June 30,

2019

 

U.S.

 

$

375

 

 

$

256

 

 

$

919

 

 

$

517

 

Mexico

 

 

326

 

 

 

965

 

 

 

486

 

 

 

1,353

 

China

 

 

 

 

 

23

 

 

 

2

 

 

 

54

 

Segment total

 

 

701

 

 

 

1,244

 

 

 

1,407

 

 

 

1,924

 

Corporate and other

 

 

3

 

 

 

24

 

 

 

3

 

 

 

24

 

Total

 

$

704

 

 

$

1,268

 

 

$

1,410

 

 

$

1,948

 

 

Property, plant and operating lease right of use assets (a)

 

 

 

June 28,

2020

 

 

December 29,

2019

 

U.S.

 

$

19,570

 

 

$

16,904

 

Mexico

 

 

10,221

 

 

 

10,970

 

China

 

 

 

 

 

670

 

Segment total

 

 

29,791

 

 

 

28,544

 

Corporate and other

 

 

123

 

 

 

96

 

Total

 

$

29,914

 

 

$

28,640

 

 

Other long term segment assets (b)

 

 

 

June 28,

2020

 

 

December 29,

2019

 

U.S.

 

$

8,564

 

 

$

9,273

 

Mexico

 

 

20,457

 

 

 

22,179

 

China

 

 

 

 

 

 

Segment total

 

 

29,021

 

 

 

31,452

 

Corporate and other

 

 

749

 

 

 

859

 

Total

 

$

29,770

 

 

$

32,311

 

 

Total segment assets (a)

 

 

 

June 28,

2020

 

 

December 29,

2019

 

U.S.

 

$

125,222

 

 

$

112,789

 

Mexico

 

 

95,153

 

 

 

93,349

 

China

 

 

 

 

 

6,694

 

Segment total

 

 

220,375

 

 

 

212,832

 

Corporate and other

 

 

895

 

 

 

547

 

Total

 

$

221,270

 

 

$

213,379

 

 

(a)

Property, plant and equipment information is based on the principal location of the asset.

(b)

Includes Goodwill, Intangible assets, deferred income taxes and deferred financing costs.

Geographic revenue

The following table contains geographic revenue based on our customer invoicing location, for the six months ended June 28, 2020 and June 30, 2019.

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 28,

2020

 

 

June 30,

2019

 

 

June 28,

2020

 

 

June 30,

2019

 

U.S.

 

$

85,413

 

 

$

82,593

 

 

$

174,922

 

 

$

176,934

 

Canada

 

 

4,646

 

 

 

4,860

 

 

 

9,668

 

 

 

9,770

 

China

 

 

347

 

 

 

3,483

 

 

 

954

 

 

 

6,881

 

Total

 

$

90,406

 

 

$

90,936

 

 

$

185,544

 

 

$

193,585

 

 

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 six months ended June 28, 2020, one customer exceeded 10% of total revenue, comprising of 14.3% of total revenue across all geographic segments. During the six months ended June 30, 2019, one customer exceeded 10% of total revenue, comprising of 13.1% of total revenue across all geographic segments.

As of June 28, 2020, no customers represented more than 10% of the trade accounts receivable.  At December 29, 2019, one customer comprised 10% of the Company’s trade accounts receivable. No other customers individually represented more than 10% of total revenue or trade accounts receivable.