Annual report pursuant to Section 13 and 15(d)

Note 12 - Segmented Information

v2.4.0.6
Note 12 - Segmented Information
 12 Months Ended
Dec. 30, 2012
Segment Reporting Disclosure [Text Block]
 12.           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 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:

   
Period ended
December 30,
2012
   
Period ended
January 1,
2012
   
Period ended
January 2,
2011
 
Revenues
                 
Mexico
  $ 187,154     $ 129.677     $ 127,318  
Canada
    35,804       36,582       56,492  
US
    58,358       24,248       21,784  
Asia
    45,477       37,988       62,417  
Total
  $ 326,793     $ 228,495     $ 268,011  
                         
Intersegment revenue
                       
Mexico
  $ (3,974 )   $ (2,862 )   $ (2,182 )
Canada
    (5,983 )     (4,998 )     (3,182 )
US
    (17,799 )     (95 )     (67 )
Asia
    (2,732 )     (189 )     —  
Total
  $ (30,488 )   $ (8,144 )   $ (5,431 )
                         
Net external revenue
                       
Mexico
  $ 183,179     $ 126,815     $ 125,136  
Canada
    29,821       31,584       53,310  
US
    40,559       24,153       21,717  
Asia
    42,745       37,799       62,417  
Total
  $ 296,305     $ 220,351     $ 262,580  
                         
Adjusted EBITDA
                       
Mexico
  $ 12,566     $ 11,169     $ 11,191  
Canada
    (4,393 )     (3,880 )     338  
US
    3,321       286       1,565  
Asia
    1,529       1,707       1,013  
Total
  $ 13,023     $ 9,282     $ 14,107  

A reconciliation of adjusted EBITDA to earnings before income taxes is as follows:

Adjusted EBITDA
  $ 13,023     $ 9,282     $ 14,107  
Interest
    1,957       1,468       1,697  
Depreciation
    3,158       2,794       2,549  
Restructuring charges
    2,180       2,678       —  
Loss on extinguishment of debt
    —       300       —  
Acquisition expenses
    —       87       —  
Earnings before income taxes
  $ 5,728     $ 1,955     $ 9,861  

Capital expenditures:

The following table contains capital expenditures for:

   
Period ended
December 30,
2012
   
Period ended
January 1,
2012
   
Period ended
January 2,
2011
 
Mexico
  $ 2,530     $ 2,289     $ 215  
Canada
    652       1,576       166  
US
    781       166       1,045  
Asia
    3,250       9       784  
Total
  $ 7,213     $ 4,040     $ 2,210  

Assets:

   
December 30,
2012
   
January 1,
2012
 
Long-lived assets (a)
           
Mexico
  $ 10,725     $ 10,170  
Canada                                                                                                 
    2,730       2,686  
US                                                                                                 
    2,265       1,868  
Asia                                                                                                 
    3,690       631  
Total
  $ 19,410     $ 15,355  
                 
Total assets
               
Mexico
  $ 77,208     $ 65,828  
Canada
    12,821       18,018  
US
    18,994       24,984  
Asia
    12,684       5,466  
Total
  $ 121,707     $ 114,296  

(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:

   
Period ended
December 30,
2012
   
Period ended
January 1,
2012
   
Period ended
January 2,
2011
 
US
  $ 214,385     $ 131,738     $ 157,746  
Canada
    68,463       70,846       69,770  
Europe
    11,722       14,249       21,182  
Asia
    1,635       3,486       13,869  
Mexico
    100       32       13  
Total
  $ 296,305     $ 220,351     $ 262,580  

Significant customers and concentration of credit risk

Sales of the Company’s products are concentrated among specific customers in the same industry. The Company requires collateral only from new customers with insufficient credit until such time as credit insurance can be obtained. The Company is subject to concentrations of credit risk in trade receivables and mitigates this risk through ongoing credit evaluation of customers and the carriage of credit insurance. 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 largest customers or any product line manufactured for one of its largest customers, it could experience a significant reduction in revenue. Also, the insolvency of one or more of its largest customers or the inability of one or more of its largest customers to pay for its orders could decrease future revenue. As many costs and operating expenses are relatively fixed, a reduction in net revenue can decrease profit margins and adversely affect business, financial condition and results of operations.

During the period ended December 30, 2012, two customers individually comprised 36%, and 12% of revenue from across all geographic segments. At December 30, 2012, these customers represented 30%, and 10% of the Company’s trade accounts receivable.

During the period ended January 1, 2012, three customers individually comprised 22%, 11% and 10% of revenue from continuing operations across all geographic segments. At January 1, 2012, these customers represented 22%, 4% and 11% of the Company’s trade accounts receivable.

During the period ended January 2, 2011, four customers individually comprised 16%, 15%, 13% and 13% of revenue from continuing operations across all geographic segments. At January 2, 2011 these customers represented 8%, 4%, 10% and 5% of the Company’s trade accounts receivable.