| Accounting Changes and Error Corrections [Text Block] |
| 2.
|
Revisions of Previously Issued Financial Statements
|
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 unaudited interim consolidated financial statements illustrating the effect of these adjustments to the comparative quarter and period year to date.
| Impact on the Unaudited Interim Consolidated Statements of Operations and Comprehensive Loss In thousands, except per share data
|
|
Three months ended June 29, 2014 As previously filed
|
|
|
Adjustment
|
|
|
Three months ended June 29, 2014 As adjusted
|
|
| Cost of sales – unrealized gain on derivative instruments (2)
|
|
$ |
(797 |
) |
|
$ |
(54 |
)
|
|
$ |
(851 |
) |
| Gross profit
|
|
|
5,779 |
|
|
|
54 |
|
|
|
5,833 |
|
| Operating earnings
|
|
|
766 |
|
|
|
54 |
|
|
|
820 |
|
| Net earnings and comprehensive income
|
|
$ |
33 |
|
|
$ |
54 |
|
|
$ |
87 |
|
| Basic and diluted earnings per share
|
|
$ |
0.01 |
|
|
|
|
|
|
$ |
0.01 |
|
| Impact on the Unaudited Interim Consolidated Statements of Operations and Comprehensive Loss In thousands, except per share data
|
|
Six months ended June 29, 2014 As previously filed
|
|
|
Adjustment
|
|
|
Six months ended June 29, 2014 As adjusted
|
|
| Cost of sales – unrealized gain on derivative instruments (2)
|
|
$ |
(889 |
) |
|
$ |
(205 |
)
|
|
$ |
(1,094 |
) |
| Cost of sales – depreciation (1)
|
|
|
2,107 |
|
|
|
(175 |
)
|
|
|
1,932 |
|
| Gross profit
|
|
|
10,164 |
|
|
|
380 |
|
|
|
10,544 |
|
| Operating earnings
|
|
|
238 |
|
|
|
380 |
|
|
|
618 |
|
| Net loss and comprehensive loss
|
|
$ |
(1,072 |
)
|
|
$ |
380 |
|
|
$ |
(692 |
)
|
| Basic and diluted loss per share
|
|
$ |
(0.07 |
)
|
|
|
|
|
|
$ |
(0.04 |
)
|
| Impact on the Interim Consolidated Statement of Changes in Shareholders’ Equity In thousands
|
|
June 29, 2014 As previously filed
|
|
|
Adjustment
|
|
|
June 29, 2014 As adjusted
|
|
| Shareholders’ equity – deficit (3)
|
|
$ |
(234,072 |
)
|
|
$ |
(1,338 |
)
|
|
$ |
(235,410 |
)
|
| Impact on the Interim Consolidated Statement of Cash Flow In thousands
|
|
Six months ended June 29, 2014 As previously filed
|
|
|
Adjustment
|
|
|
Six months ended June 29, 2014 As adjusted
|
|
| Net loss
|
|
$ |
(1,072 |
)
|
|
$ |
380 |
|
|
$ |
(692 |
)
|
| Items not involving cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation
|
|
|
2,107 |
|
|
|
(175 |
)
|
|
|
1,932 |
|
| Unrealized gain on derivative instruments
|
|
|
(889 |
)
|
|
|
(205 |
)
|
|
|
(1,094 |
)
|
| Accounts payable (4)
|
|
|
2,369 |
|
|
|
(78 |
) |
|
|
2,291 |
|
| Accrued liabilities (4)
|
|
|
(268 |
)
|
|
|
(17 |
)
|
|
|
(285 |
)
|
| Cash flow provided by operations
|
|
|
352 |
|
|
|
(95 |
) |
|
|
257 |
|
| Cash flow used by investing (4)
|
|
|
(832 |
)
|
|
|
95 |
|
|
|
(737 |
)
|
|
|
(1)
|
Cost of sales has been reduced by $175 for the six months ended June 29, 2014 on the unaudited interim consolidated statement of operations and comprehensive loss related to a reduction to amortization of $175 due to an error. There was no impact on the three months ended June 29, 2014 as the error occurred in the three months ended March 30, 2014.
|
|
|
(2)
|
Cost of sales has also been reduced by $54 and $205 for the three and six months ended June 29, 2014 respectively, related to the revaluation of the outstanding derivative forward contracts.
|
|
|
(3)
|
The total net change of ($1,338) to the deficit was the result of the opening, fiscal 2014 cumulative understatement of expenses of ($1,718) related to the prior period errors, which was offset by the reductions to cost of sales of $380 for the six months ended June 29, 2014 as described above.
|
|
|
(4)
|
The net change of $95 related to purchases of property, plant and equipment that were unpaid in cash as at June 29, 2014 and therefore reflect decreases to accounts payable and accrued liabilities, respectively and a corresponding reduction in cash used by investing.
|
|