Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Segmented Information

v2.4.0.6
Note 8 - Segmented Information
 3 Months Ended
Mar. 31, 2013
Segment Reporting Disclosure [Text Block]
8.        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 Asia. 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:

   
Three months ended
 
   
March 31, 2013
   
April 1, 2012
 
Revenues
           
Mexico
  $ 48,868     $ 42,102  
Asia
    11,782       11,387  
Canada
    5,980       8,492  
U.S.
    10,504       13,376  
Total
  $ 77,134     $ 75,357  
                 
Intersegment revenue
               
Mexico
  $ (4,861 )   $ (969 )
Asia
    (2,419 )     (755 )
Canada
    (1,124 )     (745 )
U.S.
    (3,283 )     (431 )
Total
  $ (11,687 )   $ (2,900 )
                 
Net external revenue
               
Mexico
  $ 44,007     $ 41,133  
Asia
    9,363       10,632  
Canada
    4,856       7,747  
U.S.
    7,221       12,945  
Total
  $ 65,447     $ 72,457  
                 
Adjusted EBITDA
               
Mexico
  $ 2,530     $ 4,035  
Asia
    535       686  
Canada
    18       (1,012 )
U.S.
    256       599  
Total
  $ 3,334     $ 4,308  
                 
Interest
    384       463  
Restructuring charges
    452       451  
Depreciation
    909       752  
Earnings before income taxes
  $ 1,594     $ 2,642  

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 months ended March 31, 2013:

   
Three months ended
 
   
March 31, 2013
   
April 1, 2012
 
Mexico
  $ 411     $ 1,269  
Asia
    343       3  
Canada
    74       501  
U.S.
    66       326  
Total
  $ 894     $ 2,099  

Long-lived assets (a)

   
March 31,
2013
   
December 30,
2012
 
Mexico
  $ 10,704     $ 10,725  
Asia
    3,891       3,690  
Canada
    2,631       2,730  
U.S.
    2,169       2,265  
Total
  $ 19,395     $ 19,410  

 
(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, for the three and nine months ended March 31, 2013 and April 1, 2012:

   
Three months ended
 
   
March 31, 2013
   
April 1, 2012
 
U.S.
  $ 50,066     $ 50,212  
Canada
    11,686       17,487  
Europe
    1,427       4,510  
Asia
    2,247       207  
Mexico
    21       41  
Total
  $ 65,447     $ 72,457  

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 three months ended March 31, 2013, two customers individually comprised 37.5% and 10.2% (April 1, 2012– 34.3% and 12.6%) of total revenue across all geographic segments. As of March 31, 2013, these customers represented 34%  and 8%, respectively, (December 30, 2012, 30%, and 10%, respectively) of the Company’s trade accounts receivable.