Annual report pursuant to Section 13 and 15(d)

Note 10 - Segmented Information

v3.3.1.900
Note 10 - Segmented Information
 12 Months Ended
Jan. 03, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
10.
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 on unsettled forward foreign exchange contracts, 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. 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:
 
 
 
 
Year
ended
January 3,
2016
 
 
Year
ended
December 28,
2014
 
 
Year
ended
December 29,
2013
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Mexico
   $ 142,738     $ 154,064     $ 189,825  
Canada
     —       —       13,098  
US
     33,088       46,652       47,303  
China
     55,155       57,909       58,543  
Total
   $ 230,981     $ 258,625     $ 308,769  
Intersegment revenue
 
 
 
 
 
 
 
 
 
 
 
 
Mexico
   $ (488
)
   $ (730
)
   $ (5,283
)
Canada
     —       —       (2,539
)
US
     (286
)
     (16,775
)
     (20,344
)
China
     (9,591
)
     (12,543
)
     (9,919
)
                         
Total
   $ (10,365
)
   $ (30,048
)
   $ (38,085
)
Net external revenue
 
 
 
 
 
 
 
 
 
 
 
 
Mexico
   $ 142,250     $ 153,334     $ 184,542  
Canada
     —       —       10,559  
US
     32,802       29,877       26,959  
China
     45,564       45,366       48,624  
Total segment revenue (which also equals consolidated revenue)
   $ 220,616     $ 228,577     $ 270,684  
                         
Site Contribution
 
 
 
 
 
 
 
 
 
 
 
 
Mexico
   $ 9,784     $ 8,860     $ 3,908  
Canada
     —       —       (779
)
US
     913       2,583       1,954  
China
     3,099       4,613       5,014  
Total
   $ 13,796     $ 16,056     $ 10,097  
                         
                         
                         
Corporate allocations
     12,560       13,231       13,172  
Unrealized foreign exchange (gain) loss on forward contracts
     (616 )     1,822       1,107  
Restructuring charges
    —       1,366       1,989  
Interest expense
     1,183       1,693       1,724  
Earnings (loss) before income taxes
   $ 669     $ (2,056
)
   $ (7,895
)
 
Capital expenditures:
 
The following table contains additions including those acquired through capital leases, to property, plant and equipment for 2015, 2014 and 2013:
 
 
 
Year
ended
January 3,
2016
 
 
Year
ended
December 28,
2014
 
 
Year
ended
December 29,
2013
 
Mexico
   $ 735     $ 2,962     $ 2,038  
China
     1,048       140       450  
US
     857       361       204  
Segment total
     2,640       3,463       2,692  
Corporate and other
     188       169       203  
Total
   $ 2,828     $ 3,632     $ 2,895  
 
Segment assets:
 
 
 
January 3,
2016
 
 
December 28,
2014
 
Property, plant and equipment (a)
 
 
 
 
 
 
 
 
Mexico
   $ 10,674     $ 12,556  
US
     2,217       1,776  
China
     3,255       3,001  
Corporate and other
     297       257  
Segment assets
   $ 16,443     $ 17,590  
                 
Total segment assets
 
 
 
 
 
 
 
 
Mexico
   $ 45,637     $ 56,350  
US
     11,069       10,367  
China
     23,523       19,905  
Corporate and other
     1,744       2,041  
Total
   $ 81,973     $ 88,663  
 
(a)
Property, plant and equipment information is based on the principal location of the asset.
 
 
 
76
 
 
10.
Segmented information cont’d
 
Geographic revenues:
 
The following table contains geographic revenues based on our customer invoicing location:
 
 
 
Year
ended
January 3,
2016
 
 
Year
ended
December 28,
2014
 
 
Year
ended
December 29,
2013
 
US
   $ 167,229     $ 195,465     $ 225,462  
Canada
     31,275       25,066       34,558  
Europe
     4,481       2,067       719  
Asia
     3,336       5,922       9,945  
Africa
     14,295       57       —  
Total
   $ 220,616     $ 228,577     $ 270,684  
 
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 January 3, 2016, two customers individually comprised 13% and 11% of revenue from across all geographic segments. At January 3, 2016, these customers represented 8% and 4% of the Company’s trade accounts receivable.
 
During the period ended December 28, 2014 three customers individually comprised 31%, 12% and 10% of revenue from across all geographic segments. At December 28, 2014, these customers represented 21%, 12% and 3% of the Company’s trade accounts receivable.
 
During the period ended December 29, 2013 two customers individually comprised 36%, and 12% of revenue from across all geographic segments. At December 29, 2013, these customers represented 22%, and 18% of the Company’s trade accounts receivable.