Accounting Changes and Error Corrections [Text Block] |
2.
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Revisions of Previously Issued Financial Statements
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In connection with the preparation of the consolidated financial statements of the Company for the year ended December 28, 2014, the Company identified certain errors in its previously issued consolidated financial statements for the periods ended December 29, 2013, December 30, 2012 and opening January 2, 2012. The errors related to (i) an understatement of amortization expense due to an error uncovered in the Company’s amortization schedule; (ii) an understatement of unrealized losses related to the mark to market revaluation of outstanding derivative forward contracts; (iii) an understatement of employee benefit obligations related to seniority premiums earned by Mexican employees; (iv) overstatement of deferred tax assets associated with temporary differences on certain benefit obligations in Mexico; and (v) an overstatement of cash used in investing activities related to unpaid purchases of
property, plant and equipment and a corresponding understatement of accounts payable and accrued liabilities impacting cash flow from operations and (vi) reclassification of previously reported gross revenues and intersegment revenue elimination between Mexico and China.
The following table summarizes the selected line items from the Company’s interim consolidated financial statements illustrating the effect of these adjustments to the comparative quarter.
Impact on the Interim Consolidated
Statements of Operations and Comprehensive Loss
In thousands, except per share data
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March 30, 2014
As
previously filed
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Adjustment
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March 30, 2014
As
adjusted
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|
Cost of sales – depreciation (1)
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$
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1,128
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|
$
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(175
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)
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$
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953
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Cost of sales – unrealized gain on derivative instruments (2)
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(92
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)
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(151
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)
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(243
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)
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Gross profit
|
|
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4,385
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|
|
|
326
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|
|
|
4,711
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|
Operating loss
|
|
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(528
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)
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326
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|
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(202
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)
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Net loss and comprehensive loss
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$
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(1,105
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)
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$
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326
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$
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(779
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)
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Basic and diluted loss per share
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(0.07
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)
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|
|
|
|
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(0.05
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)
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Impact on the Interim Consolidated Statement of Changes in Shareholders’ Equity
In thousands
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March 30, 2014
As
previously filed
|
|
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Adjustment
|
|
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March 30, 2014
As
adjusted
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Shareholders’ equity – deficit (3)
|
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(234,105
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)
|
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(1,392
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)
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(235,497
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)
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Impact on the Interim Consolidated Statement of Cash Flow
In thousands
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March 30, 2014
As
previously filed
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Adjusted
|
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March 30, 2014
As
adjusted
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Net loss
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$
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(1,105
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)
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$
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326
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|
|
$
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(779
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)
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Items not involving cash:
|
|
|
|
|
|
|
|
|
|
|
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Depreciation
|
|
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1,128
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|
|
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(175
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)
|
|
|
953
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|
Unrealized gain on derivative instruments
|
|
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(92
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)
|
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(151
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)
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(243
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)
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Accounts payable (4)
|
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479
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|
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|
75
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|
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|
554
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|
Accrued liabilities (4)
|
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(1,328
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)
|
|
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(64
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)
|
|
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(1,392
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)
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Cash flow provided by operations
|
|
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1,425
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|
|
|
11
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|
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1,436
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Cash flow provided from financing
|
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(736
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)
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|
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—
|
|
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(736
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)
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Cash flow used by investing (4)
|
|
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(252
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)
|
|
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(11
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)
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|
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(263
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)
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Increase (decrease) in cash
|
|
|
437
|
|
|
|
—
|
|
|
|
437
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Cash, beginning of period
|
|
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3,295
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|
|
|
—
|
|
|
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3,295
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Cash, end of period
|
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$
|
3,732
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|
|
|
—
|
|
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$
|
3,732
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|
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(1)
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Cost of sales has been reduced by $175 for the three months ended March 30, 2014 on the interim consolidated statement of operations and comprehensive loss related to a reduction to amortization of $175 due to an error.
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(2)
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Cost of sales has also been reduced by $151 for the three months ended March 30, 2014 related to the revaluation of the outstanding derivative forward contracts.
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(3)
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The total net change of ($1,392) to the deficit was the result of the opening, fiscal 2014 understatement of expenses of ($1,718) related to the prior period errors. This was offset by the reductions to cost of sales of $326 for the three months ended March 30, 2014 as described above.
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(4)
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The net change of $11 related to purchases of property, plant and equipment that were paid in cash as at March 30, 2014. This was the result of additions from 2013 of $143 unpaid in cash as at December 29, 2013 paid in the first three months of 2014 offset by the additions for the first three months of 2014 unpaid in cash of $132.
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