Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Segmented Information

v2.4.0.8
Note 8 - Segmented Information
 9 Months Ended
Sep. 28, 2014
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

8.

Segmented information


    

General description


The Company is operated and managed geographically and has facilities in the United States, Canada, Mexico and China. The Company ceased production at the Canadian facility at the end of the second quarter of 2013. 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, amortization and unrealized foreign exchange gains and losses on forward contracts). 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 revenue to the reportable segment that ships the product to the customer. Information about the reportable segments is as follows:


   

Three months ended

   

Nine months ended

 
   

September 28,

2014

   

September 29,

2013

   

September 28,

2014

   

September 29,

2013

 

Revenues

                               

Mexico

  $ 37,122     $ 50,279     $ 114,824     $ 142,700  

Asia

    14,120       19,816       44,809       43,499  

Canada

    —       396       —       13,099  

U.S.

    12,132       13,327       38,673       35,553  

Total

  $ 63,374     $ 83,818     $ 198,306     $ 234,851  

Intersegment revenue

                               

Mexico

  $ (112 )   $ (170 )   $ (619 )   $ (5,225 )

Asia

    (2,648 )     (3,323 )     (9,672 )     (7,555 )

Canada

    —       —       —       (2,539 )

U.S.

    (5,086 )     (7,432 )     (16,480 )     (16,296 )

Total

  $ (7,846 )   $ (10,925 )   $ (26,771 )   $ (31,615 )

Net external revenue

                               

Mexico

  $ 37,010     $ 50,109     $ 114,205     $ 137,475  

Asia

    11,472       16,493       35,137       35,944  

Canada

    —       396       —       10,560  

U.S.

    7,046       5,895       22,193       19,257  

Total

  $ 55,528     $ 72,893     $ 171,535     $ 203,236  

Adjusted EBITDA

                               

Mexico

  $ 1,003     $ 844     $ 618     $ 2,168  

Asia

    1,033       1,632       3,655       2,502  

Canada

    8       (480 )     (44 )     (2,036 )

U.S.

    (31 )     71       419       431  

Total

  $ 2,013     $ 2,067     $ 4,648     $ 3,065  

Interest

    470       432       1,337       1,261  

Restructuring charges

    187       289       1,366       1,443  

Depreciation

    1,028       901       3,135       2,818  

Unrealized foreign exchange (gain) loss on forward contracts

    753       (139 )     (136 )     965  

Earnings (loss) before income taxes

  $ (425 )   $ 584     $ (1,054 )   $ (3,422 )

Additions and Disposals to Property, Plant and Equipment


The following table contains additions and disposals to property, plant and equipment for the three and nine months ended September 28, 2014 and September 29, 2013:


   

Three months ended

   

Nine months ended

 
   

September

28, 2014

   

September

29, 2013

   

September

28, 2014

   

September

29, 2013

 

Mexico

  $ 393     $ 892     $ 2,658     $ 1,813  

Asia

    (31 )     5       8       426  

Canada

    23       (21,021 )     135       (22,234 )

U.S.

    (327 )     51       (215 )     242  

Total

  $ 58     $ (20,073 )   $ 2,586     $ (19,753 )

Long-lived assets (a)


   

September

28, 2014

   

December

29, 2013

 

Mexico

  $ 12,953     $ 12,236  

Asia

    3,051       3,534  

Canada

    288       399  

U.S.

    1,843       2,050  

Total

  $ 18,135     $ 18,219  

 

(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 September 28, 2014 and September 29, 2013:


   

Three months ended

   

Nine months ended

 
   

September 28,

2014

   

September 29,
2013

   

September 28,

2014

   

September 29,
2013

 

U.S.

  $ 45,924     $ 61,336     $ 149,255     $ 165,758  

Canada

    7,729       8,981       17,462       27,759  

Europe

    —       47       284       2,852  

Asia

    1,875       2,524       4,530       6,832  

Mexico

    —       5       4       35  

Total

  $ 55,528     $ 72,893     $ 171,535     $ 203,236  

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 September 28, 2014, three customers individually comprised 27.8%, 13.8% and 10.6% (September 29, 2013 – two customers individually comprised 40.1% and 12.2%) of total revenue across all geographic segments. During the nine months ended September 28, 2014 three customers individually comprised 31.3%, 13.4% and 10.3% (September 29, 2013 – two customers individually comprised 38.4% and 10.8%) of total revenue across all geographic segments. No other customers represented more than 10% of revenue. As of September 28, 2014, the three customers with revenues in excess of 10% represented 19.8%, 16.4% and 6.3%, respectively, (as of December 29, 2013, these customers represented 22.3%, 17.7% and 3.7%, respectively) of the Company’s accounts receivable.