Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Interim Consolidated Financial Statement Details

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Note 3 - Interim Consolidated Financial Statement Details
 6 Months Ended
Jul. 03, 2016
Notes to Financial Statements  
Condensed Financial Statements [Text Block]
3
.
Interim Consolidated financial statement details
 
The following consolidated financial statement details are presented as of the period ended for the consolidated balance sheets and for the periods ended for each of the consolidated statements of operations and comprehensive income (loss).
 
Consolidated Balance Sheets
 
Restricted cash:
 
 
 
July 3, 2016
 
 
January 3, 2016
 
Restricted cash
  $ 531     $ 805  
 
Restricted cash pertains to deposits which have been guaranteed to a government agency pertaining to estimated value added taxes (VAT) on imported raw materials inventory in Suzhou, China. Cash is generally 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:
 
 
 
July 3, 2016
 
 
January 3, 2016
 
Trade accounts receivable
   $ 26,150     $ 28,797  
Other receivables
     586       1,347  
Allowance for doubtful accounts
     (237
)
     (259
)
Accounts receivable—net
   $ 26,499     $ 29,885  
 
Inventories:
 
 
 
July 3, 2016
 
 
January 3, 2016
 
Raw materials
   $ 17,711     $ 19,385  
Work in process
     3,919       1,416  
Finished goods
     2,547       4,400  
Parts
     576       676  
Inventories
   $ 24,752     $ 25,877  
 
Inventories are recorded net of a provision for obsolescence as at July 3, 2016 and January 3, 2016 of $363 and $673 respectively. The decrease in the provision for obsolescence was due primarily to the write down of inventory for two customers that was previously provided for.
 
 
Property, plant and equipment – net:
 
 
 
July 3, 2016
 
 
January 3, 2016
 
Cost:
                
Land
   $ 1,648     $ 1,648  
Buildings
     9,852       9,852  
Machinery and equipment (a) (c)
     31,444       30,707  
Office furniture and equipment
     643       599  
Computer hardware and software (b)
     3,582       3,447  
Leasehold improvements
    3,435       3,232  
      50,604       49,485  
Less accumulated depreciation:
               
Land
     —       —  
Buildings
     (7,949
)
     (7,719
)
Machinery and equipment (a) (c)
     (21,502
)
     (20,347
)
Office furniture and equipment
     (520
)
     (496
)
Computer hardware and software (b)
     (2,624
)
     (2,284
)
Leasehold improvements
    (2,375
)
     (2,196
)
      (34,970
)
     (33,042
)
Property, plant and equipment—net
   $ 15,634     $ 16,443  
 
(a)
Included within machinery and equipment were assets under capital leases with costs of $2,193 and $2,528 and associated accumulated depreciation of $516 and $865 as of July 3, 2016 and January 3, 2016, respectively. The related depreciation expense for the three months ended July 3, 2016 and June 28, 2015 was $74 and $124, respectively. The related depreciation expense for the six months ended July 3, 2016 and June 28, 2015 was $154 and $237, respectively. 
 
(b)
Included within computer hardware and software are assets under capital leases with costs of $119 as at July 3, 2016 and January 3, 2016 and associated accumulated depreciation of $106 and $86 as at July 3, 2016 and January 3, 2016, respectively. The related depreciation expense for the three months ended July 3, 2016 and June 28, 2015 was $10 and $19, respectively. The related depreciation expense for the six months ended July 3, 2016 and June 28, 2015 was $20 and $29, respectively.
 
(c)
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.
 
 
Accrued liabilities:
 
 
 
July 3, 2016
 
 
January 3, 2016
 
Customer related
   $ 977     $ 1,852  
Payroll
     2,228       2,649  
Professional services
     300       367  
Restructuring (note 10)
     113       —  
Vendor related
     547       383  
Other
     279       311  
Accrued liabilities
   $ 4,444     $ 5,562  
 
 
 
Interim consolidated statements of operations and comprehensive income (loss)
 
Interest expense:
 
 
 
Three months ended
 
 
Six months ended
 
 
 
July 3,
2016
 
 
June 28,
2015
 
 
July 3,
2016
 
 
June 28,
2015
 
Revolving credit facility
   $ 124     $ 270     $ 290     $ 530  
Long-term debt
     54       —       93       —  
Amortization of deferred financing fees
     8       7       17       15  
Obligations under capital leases
     17       27       34       69  
Interest expense
   $ 203     $ 304     $ 434     $ 614