Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Oct. 01, 2017 | Oct. 27, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | SMTC CORP | |
Entity Central Index Key | 1,108,320 | |
Trading Symbol | smtx | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 16,825,197 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 1, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Interim Consolidated Balance Sh
Interim Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Oct. 01, 2017 | Jan. 01, 2017 |
Current assets: | ||
Cash | $ 2,935 | $ 8,503 |
Accounts receivable — net (note 4) | 23,165 | 22,624 |
Inventories (note 4) | 21,217 | 20,674 |
Prepaid expenses and other assets | 1,689 | 2,453 |
Derivative assets (note 10) | 182 | 0 |
Income taxes receivable | 17 | 17 |
Total current assets: | 49,205 | 54,271 |
Property, plant and equipment — net (note 4) | 10,962 | 14,437 |
Deferred income taxes — net | 469 | 226 |
Deferred financing costs — net | 102 | 70 |
Total assets: | 60,738 | 69,004 |
Current liabilities: | ||
Revolving credit facility (note 5) | 5,909 | 2,731 |
Accounts payable | 20,344 | 23,078 |
Accrued liabilities (note 4) | 5,814 | 4,604 |
Derivative liabilities (note 10) | 0 | 1,256 |
Income taxes payable | 46 | 190 |
Current portion of long-term debt (note 5) | 2,000 | 2,000 |
Current portion of capital lease obligations | 171 | 389 |
Total current liabilities: | 34,284 | 34,248 |
Long-term debt (note 5) | 6,500 | 8,000 |
Capital lease obligations | 135 | 269 |
Shareholders’ equity: | ||
Capital stock (note 6) | 394 | 391 |
Additional paid-in capital | 265,198 | 264,928 |
Deficit | (245,773) | (238,832) |
Total shareholder’s equity | 19,819 | 26,487 |
Total liabilities and shareholder’s equity | $ 60,738 | $ 69,004 |
Interim Consolidated Statements
Interim Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Revenue | $ 34,417 | $ 42,683 | $ 100,590 | $ 128,218 |
Cost of sales (note 10) | 31,443 | 39,049 | 92,639 | 116,615 |
Gross profit | 2,974 | 3,634 | 7,951 | 11,603 |
Selling, general and administrative expenses | 2,952 | 3,493 | 10,824 | 10,406 |
Impairment of property, plant and equipment (note 4) | 1,601 | |||
Gain on disposal of property, plant and equipment | (60) | (20) | (60) | (25) |
Restructuring charges (note 11) | 326 | 1,677 | 176 | |
Operating earnings (loss) | (244) | 161 | (6,091) | 1,046 |
Interest expense (note 4) | 229 | 164 | 625 | 598 |
Earnings (loss) before income taxes | (473) | (3) | (6,716) | 448 |
Income tax expense (recovery) (note 7): | ||||
Current | 173 | 97 | 468 | 200 |
Deferred | (95) | (81) | (243) | (96) |
78 | 16 | 225 | 104 | |
Net earnings (loss) and comprehensive income (loss) | $ (551) | $ (19) | $ (6,941) | $ 344 |
Earnings (loss) per share of common stock: | ||||
Basic (in dollars per share) | $ (0.03) | $ 0 | $ (0.41) | $ 0.02 |
Diluted (in dollars per share) | $ (0.03) | $ 0 | $ (0.41) | $ 0.02 |
Weighted average number of shares outstanding (note 8): | ||||
Basic (in shares) | 16,824,538 | 16,510,180 | 16,764,257 | 16,502,081 |
Diluted (in shares) | 16,824,538 | 16,510,180 | 16,764,257 | 17,550,155 |
Interim Consolidated Statement4
Interim Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - 9 months ended Oct. 01, 2017 - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance (in shares) at Jan. 01, 2017 | 16,510,180 | |||
Balance at Jan. 01, 2017 | $ 391 | $ 264,928 | $ (238,832) | $ 26,487 |
RSU vested and issued in common shares (in shares) | 315,017 | |||
RSU vested and issued in common shares | $ 3 | (3) | ||
Stock-based compensation | 273 | 273 | ||
Net loss | (6,941) | (6,941) | ||
Balance (in shares) at Oct. 01, 2017 | 16,825,197 | |||
Balance at Oct. 01, 2017 | $ 394 | $ 265,198 | $ (245,773) | $ 19,819 |
Interim Consolidated Statement5
Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2017 | Oct. 02, 2016 | |
Operations: | ||
Net Income (Loss) Attributable to Parent | $ (6,941) | $ 344 |
Items not involving cash: | ||
Depreciation | 2,789 | 3,066 |
Unrealized foreign exchange gain on unsettled forward exchange contracts | (1,438) | (995) |
Impairment of property, plant and equipment | 1,601 | |
Gain on disposal of property, plant and equipment | (60) | (25) |
Deferred income taxes | (243) | (96) |
Amortization of deferred financing fees | 19 | 26 |
Stock-based compensation | 273 | 343 |
Change in non-cash operating working capital: | ||
Accounts receivable | (541) | 6,220 |
Inventories | (543) | 2,886 |
Prepaid expenses and other assets | 764 | 40 |
Income taxes receivable/payable | (144) | 20 |
Accounts payable | (2,581) | (5,244) |
Accrued liabilities | 1,179 | (742) |
Total cash used in operations | (5,866) | 5,843 |
Financing: | ||
Net advance (repayment) of revolving credit facility | 3,178 | (2,681) |
Repayment of long-term debt | (1,500) | (500) |
Principal payment of capital lease obligations | (352) | (429) |
Proceeds from sales leaseback | 509 | |
Deferred financing fees | (51) | |
Total cash provided by financing | 1,275 | (3,101) |
Investing: | ||
Change in restricted cash | 268 | |
Purchase of property, plant and equipment | (1,314) | (1,864) |
Proceeds for leasehold improvement | 56 | |
Proceeds from sale of property, plant and equipment | 281 | 126 |
Total cash used in investing | (977) | (1,470) |
Increase (decrease) in cash | (5,568) | 1,272 |
Cash, beginning of period | 8,503 | 6,099 |
Cash, end of the period | 2,935 | 7,371 |
Supplemental Information | ||
Property, plant and equipment acquired that was included in accounts payable and accrued liabilities | $ 71 | $ 36 |
Note 1 - Nature of the Business
Note 1 - Nature of the Business | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Business Description and Basis of Presentation [Text Block] | 1. Nature of the business SMTC Corporation (the “Company”) is a worldwide provider of advanced electronics manufacturing services to original equipment manufacturers. The Company services its customers through manufacturing and technology centers located in the United States, Mexico and China. All facilities provide a full suite of integrated manufacturing services including assembly, testing, box build, final product integration, and expanded supply chain capabilities. In addition, the Company operates an international sourcing and procurement office in Hong Kong. The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with the accounting principles and methods of application disclosed in the audited consolidated financial statements within the Company ’s Annual Report on Form 10 January 1, 2017 ( 10 March 9, 2017. 10 January 1, 2017 10 not not may Unless otherwise specified or the context requires otherwise, all statements in these notes to the interim consolidated financial statements regarding financial figures are expressed in thousands of U.S. dollars. |
Note 2 - Assessment of Liquidit
Note 2 - Assessment of Liquidity and Management's Plans | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Substantial Doubt about Going Concern [Text Block] | 2. Assessment of Liquidity and Management's Plans As at October 1, 2017, $2,935 $7,106 5 $30,000, $7,106 October 1, 2017 The Company has experienced significant reductions in revenue throughout fiscal 2016 first nine 2017 $344 January 1, 2017 first nine 2017 $6,941. Given the Company’s results of operations in this challenging business environment, in accordance with ASC 205 40 one In order to address the Company ’s liquidity, on May 15, 2017, 2017 second 2017 third 2017. Also, effective May 15, 2017, ended April 2, 2017 5 October 1, 2017. In accordance with Accounting Standards Codification 205 40, one 2017 not twelve |
Note 3 - Recently Adopted Accou
Note 3 - Recently Adopted Accounting Pronouncements | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 3. Recent Adopted Accounting Pronouncements In July 2015, 2015 11: 330 330 not no December 15, 2016, 2015 11 no In November 2015, 2015 17: 740 December 15, 2016, 2015 17 ’s deferred tax assets as non-current. The deferred tax assets reported in the prior periods have been reclassified to conform to the current presentation. In March 2016, 2016 09: – Stock Compensation (Topic 718 December 15, 2016, 2016 09 no Recent Accounting Pronouncements Not In March 2016, 2016 08: 606 April 2016, 2016 10: 606 May 2016, 2016 12: 606 May 2014, 2014 09: 606 605 605 35, —Construction-Type and Production-Type Contracts, and amends existing requirements for recognition of a gain/loss on the transfer of nonfinancial assets that are not 360, 350, August 2015, 2015 14 606 one December 15, 2017 third We anticipate a modified retrospective adoption effective January 1, 2018. In January 2016, 2016 01: 825 10 December 15, 2017, not In February 2016, 2016 02: 842 may 12 December 15, 2018, In May 2016, 2016 13 – Credit losses (Topic 326 December 15, 2019 December 15, 2018. not In August 2016, 2016 15 230 eight zero December 15, 2017 adoption of ASU 2016 15 not In November 2016, 2016 18 230 December 15, 2017 not |
Note 4 - Interim Consolidated F
Note 4 - Interim Consolidated Financial Statement Details | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Condensed Financial Statements [Text Block] | 4 . 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 Accounts receivable – net: October 1 , 201 7 January 1 , 201 7 Trade accounts receivable $ 23,866 $ 22,284 Other receivables 284 511 Allowance for doubtful accounts (a) (985 ) (171 ) Accounts receivable —net $ 23,165 $ 22,624 (a) The increase in the allowance for doubtful accounts from January 1, 2017 October 1, 2017 one one Inventories: October 1 , 201 7 January 1 , 201 7 Raw materials (a) $ 15,948 $ 14,863 Work in process 2,614 1,557 Finished goods 2,139 3,678 Parts 516 576 Inventories $ 21,217 $ 20,674 (a) Raw materials are recorded net of a provision for obsolescence as at October 1, 2017 January 1, 2017 $827 $442 Property, plant and equipment – net: October 1 , 201 7 January 1 , 201 7 Cost: Land $ 1,648 $ 1,648 Buildings 9,852 9,852 Machinery and equipment (a) (b) (c) 30,308 31,615 Office furniture and equipment 532 556 Co mputer hardware and software 3,118 3,544 Leasehold improvements 2,127 2,129 47,585 49,344 Less accumulated depreciation: Land — — Buildings (8,508 ) (8,174 ) Machinery and equipment (a) (b) (c) (24,160 ) (22,460 ) Office furniture and equipment (405 ) (438 ) Co mputer hardware and software (2,516 ) (2,842 ) Leasehold improvements (1,034 ) (993 ) (36,623 ) (34,907 ) Property, plant and equipment —net $ 10,962 $ 14,437 (a) Included within machinery and equipment were assets under capital leases with costs of $533 $2,193 $207 $673 October 1, 2017 January 1, 2017, three October 1, 2017 October 2, 2016 $15 $78, nine October 1, 2017 October 2, 2016 $148 $233, $97 nine October 1, 2017. three October 1, 2017, no ( b) In accordance with ASC 360 10, may not Upon the occurrence of a triggering event, the Company assesses whether the estimated undiscounted cash flows expected from the use of the asset and the residual value from the ultimate disposal of the asset exceeds the carrying value. In 2017, not $1,025 2017. $1,255. 1%, $110. 1% $37. No three October 1, 2017, no In 2017, operating results for its China segment asset group did not $1,510. $1,122 no third 2017. 1%, $641. may . There were no third 2017. ( c) During 2017, no $870. 446.The $130. $576 2017. Accrued liabilities: October 1 , 201 7 January 1 , 201 7 Customer related $ 1,808 $ 898 Payroll 2,540 2,134 Professional services 368 281 Restructuring (note 1 1) 185 27 Vendor related 396 613 Other 517 651 Accrued liabilities $ 5,814 $ 4,604 Interim consolidated statements of operations and comprehensive income (loss) Interest expense: Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Revolving credit facility $ 100 $ 83 $ 243 $ 373 Long-term debt 116 52 342 145 Amortization of deferred financing fees 8 9 19 26 Obligations under capital leases 5 20 21 54 Interest expense $ 229 $ 164 $ 625 $ 598 |
Note 5 - Debt
Note 5 - Debt | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 5 . Debt (a) Revolving credit and long-term debt facilit ies The Company borrows money under a Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”) which governs the PNC Revolving Credit Facility and a Long-Term Debt Facility (“PNC Facilities”). The PNC Facilities have a term ending on January 2, 2021. 0.75%. 1.25%. 4.8% first nine 2017 4.2% first nine 2016. As at October 1, 2017 , the funds available to borrow under the PNC Revolving Credit Facility after deducting the current borrowing base conditions was $7,106 January 1, 2017 - $7,377 $30,000. On May 15, 2017, September 14, 2011 Pursuant to the Twelfth Amendment, the Lender has modified the definition of EBITDA (as defined in the Twelfth Amendment) to include additional exclusions and limits. In addition, the Lender has increased the interest rates by 0.25% 0.25% 0.75% The PNC Long-Term Debt Facility consists of a term loan of $10,000 January 2, 2021 $500 At October 1, 2017, $5,909 January 1, 2017 - $2,731 October 1, 2017, $8,500 January 1, 2017 – $10,000 The PNC Facilities are a joint and several obligations of the Company and its subsidiaries that are borrowers under the facilities and are jointly and severally guaranteed by other subsidiaries of the Company. Repayment under the PNC Facilities is collateralized by the assets of the Company and each of its subsidiaries. (b) Covenants The Revolving Credit and Security Agreement contains certain financial and non-financial covenants. As defined under the Twelfth Amendment, the Company was required to maintain a minimum EBITDA for the twelve July 2, 2017 three October 1, 2017. three December 31, 2017, six April 1, 2018, nine July 1, 2018, twelve September 30, 2018 twelve January 2, 2021. The Company is in compliance with the financial covenants included in the PNC Facilities as of October 1, 2017. |
Note 6 - Capital Stock
Note 6 - Capital Stock | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 6 . Capital stock Common shares Issued and outstanding: The issued and outstanding number of common shares included in shareholders ’ equity consisted of the following: Number of shares $ Balance at January 1, 2017 16,510,180 391 Share issuance 315,017 3 Balance at October 1, 2017 16,825,197 394 Stock Options For more detailed information regarding the Company ’s stock option arrangements, see Note 6 10 January 1, 2017. 1,343,716 nine October 1, 2017. nine October 1, 2017 Number of options Weighted average Aggregate intrinsic Weighted average (years) Outstanding at January 1, 2017 616,766 $ 1.82 8 5.6 Options granted 1,343,716 $ 1.24 Expired (111,282 ) 1.84 Forfeited (40,721 ) 1.80 Outstanding at October 1, 2017 1,808,479 $ 1.39 $ 97 8.7 Exercisable at October 1, 2017 333,798 $ 1.92 $ — 4.2 During the nine October 1, 2017, 1,343,716 20% ’s average closing share price being above each of $2.00, $3.00, $4.00, $5.00 $6.00 90 not not may, may not no may 180 ten A binomial model was utilized to determine the fair value of the stock options issued during the nine October 1, 2017. Nine months ended October 1 , 2017 Binomial Model weighted-average assumptions Expected dividend yield 0.0 % Expected volatility 42.7 % Expected forfeiture 30.0 % Risk-free interest rate 1.02 % Expected option life in years 5.0 Weighted-average stock option fair value per option granted $ 0.29 Stock-based compensation recognized during the three October 1, 2017 October 2, 2016 $22 $20, nine October 1, 2017 October 2, 2016, $45 $62, Restricted Stock Units For more detailed information regarding the Company ’s restricted stock units (“RSU”) arrangements, see Note 6 10 January 1, 2017. one 111,200 nine October 1, 2017. nine October 1, 2017 Outstanding RSU Weighted average Weighted average Outstanding balance at January 1, 2017 1,090,126 $ 1.22 1.01 RSU ’s granted 111,200 $ 1.39 RSU ’s vested and issued in shares (315,017 ) 1.80 RSU ’s forfeited (261,606 ) 0.89 Outstanding balance at October 1, 2017 624,703 $ 1.06 0.91 Certain RSUs outstanding have a market condition such that the awards are vested and issuable only if the market price of the Company’s stock meets or exceeds a specified target during the vesting period. If the market condition is not not Stock based compensation recognized during the three October 1, 2017 October 2, 2016 $55 $99, nine October 1, 2017 October 2, 2016 $228 $281, |
Note 7 - Income Taxes
Note 7 - Income Taxes | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 7 . Income taxes During the three period ended October 1, 2017 October 2, 2016, $173 $97, three October 1, 2017 October 2, 2016, $95 $81, nine October 1, 2017 October 2, 2016, $468 $200, nine October 1, 2017 October 2, 2016 $243 $96, In assessing the realization of deferred tax assets, management considers whether it is more likely than not not 740, , (“ASC 740” not |
Note 8 - Earnings (Loss) Per Co
Note 8 - Earnings (Loss) Per Common Share | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 8 . Earnings (loss) per common share The following table details the weighted average number of common shares outstanding for the purposes of computing basic and diluted earnings per common share for the following periods: Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Basic weighted average shares outstanding 16,824,538 16,510,180 16,764,257 16,502,081 Dilutive stock awards (1) (a) (b) — — — 1,048,074 Diluted weighted average shares outstanding 16,824,538 16,510,180 16,764,257 17,550,155 ( 1 Dilutive stock awards include outstanding RSU’s and in-the money stock options determined using the treasury stock method (a) Dilutive options were determined using the treasury stock method, using an average price of $1.27 three October 1, 2017. three October 1, 2017, three October 1, 2017, 663,400 nine October 1, 2017, $1.31 696,177 (b) Dilutive options were determined using the treasury stock method, using an average price of $1.52 three October 2, 2016. three October 2, 2016, three October 2, 2016, 1,046,730 nine October 2, 2016, $1.47 1,048,074 |
Note 9 - Segmented Information
Note 9 - Segmented Information | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 9 . Segmented information General description The Company is operated and managed geographically and has production facilities in the United States, Mexico and China. The Company utilizes reportable segment ’s site contribution (site revenues minus operating expenses, excluding unrealized foreign exchange gain (loss) on unsettled forward exchange contracts, corporate allocations and restructuring expenses) to monitor reportable segment performance. Site contribution is utilized by the chief operating decision-maker as the indicator of reportable segment performance, as it reflects costs which our operating site management is directly responsible for. 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 site revenue to the reportable segment that ships the product to the customer, irrespective of the product’s destination. Information about the reportable segments is as follows: Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Revenues Mexico $ 23,907 $ 24,857 $ 70,394 $ 77,321 China 6,934 15,134 23,031 41,891 U.S. 6,319 5,009 15,229 15,689 Total $ 37,160 $ 45,000 $ 108,654 $ 134,901 Intersegment revenue Mexico $ — $ (141 ) $ (12 ) $ (396 ) China (2,640 ) (2,108 ) (7,810 ) (5,952 ) U.S. (103 ) (68 ) (242 ) (335 ) Total $ (2,743 ) $ (2,317 ) $ (8,064 ) $ (6,683 ) Net external revenue Mexico $ 23,907 $ 24,716 $ 70,382 $ 76,925 China 4,294 13,026 15,221 35,939 U.S. 6,216 4,941 14,987 15,354 Total segment revenue (which also equals consolidated revenue) $ 34,417 $ 42,683 $ 100,590 $ 128,218 Site Contribution Mexico $ 2,346 $ 1,642 $ 5,031 $ 6,513 China 146 1,643 (1,028 ) 2,808 U.S. (55 ) (331 ) (2,169 ) (771 ) Total $ 2,437 $ 2,954 $ 1,834 $ 8,550 Corporate allocations 2,237 2,789 7,686 8,323 Unrealized foreign exchange (gain) loss on unsettled forward exchange contracts 118 4 (1,438 ) (995 ) Interest 229 164 625 598 Restructuring charges 326 — 1,677 176 Earnings (loss) before income taxes $ (473 ) $ (3 ) $ (6,716 ) $ 448 Additions to property, plant and equipment The following table contains additions to property, plant and equipment including those acquired through capital leases for the three nine October 1, 2017 October 2, 2016: Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Mexico $ 220 $ 256 $ 400 $ 590 China 59 95 134 575 U.S. 171 12 480 303 Segment total 450 363 1,014 1,468 Corporate and other — 14 124 185 Total $ 450 $ 377 $ 1,138 $ 1,653 Property, plant and equipment (a) October 1 , 201 7 January 1 , 201 7 Mexico $ 7,988 $ 8,858 China 1,510 3,046 U.S. 1,254 2,314 Corporate and other 210 219 Segment assets $ 10,962 $ 14,437 (a) Property, plant and equipment 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 nine October 1, 2017 October 2, 2016: Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 U.S. $ 27,044 $ 29,470 $ 77,219 $ 83,848 Canada 4,390 9,132 14,894 32,832 Europe — 592 — 1,497 China 1,488 1,751 3,844 4,403 Africa 1,495 1,738 4,633 5,638 Total $ 34,417 $ 42,683 $ 100,590 $ 128,218 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 increase in the allowance for doubtful accounts from January 1, 2017 October 1, 2017 one one 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 one one During the three October 1, 2017, two 10% 14.0% 12.8% October 2, 2016 – two 15.6% 10.2%, three October 1, 2017. nine October 1, 2017, two 12.3% 11.5% October 2, 2016 – two 15.8% 15.4% As of October 1, 2017, one 10% 15.3% January 1, 2017, one 11.8% |
Note 10 - Derivative Financial
Note 10 - Derivative Financial Instruments | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 10 . Derivative financial instruments The Company enters into forward foreign exchange contracts to reduce its exposure to foreign exchange currency rate fluctuations related to a portion of the forecasted Canadian dollar and Mexican Peso denominated payroll, rent and utility cash flows for the three 2017 first nine 2018. not 815 not The following table presents a summary of the outstanding foreign currency forward contracts as at October 1, 2017: Currency Buy/Sell Foreign Currency Amount Notional Contract Value in USD Canadian Dollar Buy CAD 3,020 $ 2,323 Mexican Peso Buy MXN 154,000 $ 8,171 The unrealized loss recognized in earnings for the three October 1, 2017 $118 October 2, 2016 – $4 nine October 1, 2017 $1,438 October 2, 2016 – $995 three October 1, 2017 $271 October 2, 2016 – $619 nine October 1, 2017 $179 October 2, 2016 – $2,197 2 820 October 1 , 201 7 January 1 , 201 7 Average USD:CAD contract rate 1.30 1. 34 Average USD:CAD mark-to-market rate 1.25 1.3 4 Average USD:PESO contract rate 18.85 1 8.47 Average USD:PESO mark-to-market rate 18.66 21.20 The derivative asset as at October 1, 2017 $182 $Nil January 1, 2017) October 1, 2017 Nil $1,256 January 1, 2017) Foreign exchange gains and losses are recorded in cost of sales in the consolidated statement of operations and comprehensive loss pertaining to translation of foreign denominated transactions during the period in addition to foreign denominated monetary assets and liabilities at the end of the reporting period. The total aggregate translated foreign exchange gain of $67 three October 1, 2017 ( October 2, 2016 – $99 $13 nine October 1, 2017 ( October 2, 2016 – $203 |
Note 11 - Restructuring Charges
Note 11 - Restructuring Charges | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Restructuring and Related Activities Disclosure [Text Block] | 1 1 . Restructuring charges During the nine October 1, 2017, May 15, 2017, $1.6 49 105 22 12 three October 1, 2017, $0.3 $0.2 fourth 2017. Severance Balance as at January 1, 2017 $ 27 Charges 1,677 Payments (1,519 ) Balance as at October 1, 2017 $ 185 |
Note 12 - Commitments
Note 12 - Commitments | 9 Months Ended |
Oct. 01, 2017 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 1 2 . Commitments Purchase obligations not consolidated balance sheet as at October 1, 2017 $12,834 October 2, 2016 - $15,753 12 |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 01, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | In July 2015, 2015 11: 330 330 not no December 15, 2016, 2015 11 no In November 2015, 2015 17: 740 December 15, 2016, 2015 17 ’s deferred tax assets as non-current. The deferred tax assets reported in the prior periods have been reclassified to conform to the current presentation. In March 2016, 2016 09: – Stock Compensation (Topic 718 December 15, 2016, 2016 09 no Recent Accounting Pronouncements Not In March 2016, 2016 08: 606 April 2016, 2016 10: 606 May 2016, 2016 12: 606 May 2014, 2014 09: 606 605 605 35, —Construction-Type and Production-Type Contracts, and amends existing requirements for recognition of a gain/loss on the transfer of nonfinancial assets that are not 360, 350, August 2015, 2015 14 606 one December 15, 2017 January 1, 2018. In January 2016, 2016 01: 825 10 December 15, 2017, not In February 2016, 2016 02: 842 may 12 December 15, 2018, In May 2016, 2016 13 – Credit losses (Topic 326 December 15, 2019 December 15, 2018. not In August 2016, 2016 15 230 eight zero December 15, 2017 adoption of ASU 2016 15 not In November 2016, 2016 18 230 December 15, 2017 not |
Note 4 - Interim Consolidated19
Note 4 - Interim Consolidated Financial Statement Details (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Notes Tables | |
Condensed Balance Sheet [Table Text Block] | October 1 , 201 7 January 1 , 201 7 Trade accounts receivable $ 23,866 $ 22,284 Other receivables 284 511 Allowance for doubtful accounts (a) (985 ) (171 ) Accounts receivable —net $ 23,165 $ 22,624 October 1 , 201 7 January 1 , 201 7 Raw materials (a) $ 15,948 $ 14,863 Work in process 2,614 1,557 Finished goods 2,139 3,678 Parts 516 576 Inventories $ 21,217 $ 20,674 October 1 , 201 7 January 1 , 201 7 Cost: Land $ 1,648 $ 1,648 Buildings 9,852 9,852 Machinery and equipment (a) (b) (c) 30,308 31,615 Office furniture and equipment 532 556 Co mputer hardware and software 3,118 3,544 Leasehold improvements 2,127 2,129 47,585 49,344 Less accumulated depreciation: Land — — Buildings (8,508 ) (8,174 ) Machinery and equipment (a) (b) (c) (24,160 ) (22,460 ) Office furniture and equipment (405 ) (438 ) Co mputer hardware and software (2,516 ) (2,842 ) Leasehold improvements (1,034 ) (993 ) (36,623 ) (34,907 ) Property, plant and equipment —net $ 10,962 $ 14,437 October 1 , 201 7 January 1 , 201 7 Customer related $ 1,808 $ 898 Payroll 2,540 2,134 Professional services 368 281 Restructuring (note 1 1) 185 27 Vendor related 396 613 Other 517 651 Accrued liabilities $ 5,814 $ 4,604 |
Condensed Income Statement [Table Text Block] | Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Revolving credit facility $ 100 $ 83 $ 243 $ 373 Long-term debt 116 52 342 145 Amortization of deferred financing fees 8 9 19 26 Obligations under capital leases 5 20 21 54 Interest expense $ 229 $ 164 $ 625 $ 598 |
Note 6 - Capital Stock (Tables)
Note 6 - Capital Stock (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Notes Tables | |
Schedule of Common Stock Outstanding Roll Forward [Table Text Block] | Number of shares $ Balance at January 1, 2017 16,510,180 391 Share issuance 315,017 3 Balance at October 1, 2017 16,825,197 394 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of options Weighted average Aggregate intrinsic Weighted average (years) Outstanding at January 1, 2017 616,766 $ 1.82 8 5.6 Options granted 1,343,716 $ 1.24 Expired (111,282 ) 1.84 Forfeited (40,721 ) 1.80 Outstanding at October 1, 2017 1,808,479 $ 1.39 $ 97 8.7 Exercisable at October 1, 2017 333,798 $ 1.92 $ — 4.2 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Nine months ended October 1 , 2017 Binomial Model weighted-average assumptions Expected dividend yield 0.0 % Expected volatility 42.7 % Expected forfeiture 30.0 % Risk-free interest rate 1.02 % Expected option life in years 5.0 Weighted-average stock option fair value per option granted $ 0.29 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | Outstanding RSU Weighted average Weighted average Outstanding balance at January 1, 2017 1,090,126 $ 1.22 1.01 RSU ’s granted 111,200 $ 1.39 RSU ’s vested and issued in shares (315,017 ) 1.80 RSU ’s forfeited (261,606 ) 0.89 Outstanding balance at October 1, 2017 624,703 $ 1.06 0.91 |
Note 8 - Earnings (Loss) Per 21
Note 8 - Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Notes Tables | |
Schedule of Weighted Average Number of Shares [Table Text Block] | Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Basic weighted average shares outstanding 16,824,538 16,510,180 16,764,257 16,502,081 Dilutive stock awards (1) (a) (b) — — — 1,048,074 Diluted weighted average shares outstanding 16,824,538 16,510,180 16,764,257 17,550,155 |
Note 9 - Segmented Information
Note 9 - Segmented Information (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Revenues Mexico $ 23,907 $ 24,857 $ 70,394 $ 77,321 China 6,934 15,134 23,031 41,891 U.S. 6,319 5,009 15,229 15,689 Total $ 37,160 $ 45,000 $ 108,654 $ 134,901 Intersegment revenue Mexico $ — $ (141 ) $ (12 ) $ (396 ) China (2,640 ) (2,108 ) (7,810 ) (5,952 ) U.S. (103 ) (68 ) (242 ) (335 ) Total $ (2,743 ) $ (2,317 ) $ (8,064 ) $ (6,683 ) Net external revenue Mexico $ 23,907 $ 24,716 $ 70,382 $ 76,925 China 4,294 13,026 15,221 35,939 U.S. 6,216 4,941 14,987 15,354 Total segment revenue (which also equals consolidated revenue) $ 34,417 $ 42,683 $ 100,590 $ 128,218 Site Contribution Mexico $ 2,346 $ 1,642 $ 5,031 $ 6,513 China 146 1,643 (1,028 ) 2,808 U.S. (55 ) (331 ) (2,169 ) (771 ) Total $ 2,437 $ 2,954 $ 1,834 $ 8,550 Corporate allocations 2,237 2,789 7,686 8,323 Unrealized foreign exchange (gain) loss on unsettled forward exchange contracts 118 4 (1,438 ) (995 ) Interest 229 164 625 598 Restructuring charges 326 — 1,677 176 Earnings (loss) before income taxes $ (473 ) $ (3 ) $ (6,716 ) $ 448 Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 Mexico $ 220 $ 256 $ 400 $ 590 China 59 95 134 575 U.S. 171 12 480 303 Segment total 450 363 1,014 1,468 Corporate and other — 14 124 185 Total $ 450 $ 377 $ 1,138 $ 1,653 Three months ended Nine months ended October 1 , 201 7 October 2, 2016 October 1 , 201 7 October 2, 2016 U.S. $ 27,044 $ 29,470 $ 77,219 $ 83,848 Canada 4,390 9,132 14,894 32,832 Europe — 592 — 1,497 China 1,488 1,751 3,844 4,403 Africa 1,495 1,738 4,633 5,638 Total $ 34,417 $ 42,683 $ 100,590 $ 128,218 |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | October 1 , 201 7 January 1 , 201 7 Mexico $ 7,988 $ 8,858 China 1,510 3,046 U.S. 1,254 2,314 Corporate and other 210 219 Segment assets $ 10,962 $ 14,437 |
Note 10 - Derivative Financia23
Note 10 - Derivative Financial Instruments (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Notes Tables | |
Schedule of Derivative Instruments [Table Text Block] | Currency Buy/Sell Foreign Currency Amount Notional Contract Value in USD Canadian Dollar Buy CAD 3,020 $ 2,323 Mexican Peso Buy MXN 154,000 $ 8,171 |
Schedule of Derivative Rates at Fair Value [Table Text Block] | October 1 , 201 7 January 1 , 201 7 Average USD:CAD contract rate 1.30 1. 34 Average USD:CAD mark-to-market rate 1.25 1.3 4 Average USD:PESO contract rate 18.85 1 8.47 Average USD:PESO mark-to-market rate 18.66 21.20 |
Note 11 - Restructuring Charg24
Note 11 - Restructuring Charges (Tables) | 9 Months Ended |
Oct. 01, 2017 | |
Notes Tables | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | Severance Balance as at January 1, 2017 $ 27 Charges 1,677 Payments (1,519 ) Balance as at October 1, 2017 $ 185 |
Note 2 - Assessment of Liquid25
Note 2 - Assessment of Liquidity and Management's Plans (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | Jan. 01, 2017 | Jul. 02, 2017 | Jan. 03, 2016 | |
Cash and Cash Equivalents, at Carrying Value | $ 2,935 | $ 7,371 | $ 2,935 | $ 7,371 | $ 8,503 | $ 6,099 | |
Net Income (Loss) Attributable to Parent | (551) | $ (19) | (6,941) | $ 344 | (344) | ||
PNC Bank [Member] | Revolving Credit Facility [Member] | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | 7,106 | 7,106 | $ 7,377 | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000 | $ 30,000 | $ 30,000 |
Note 4 - Interim Consolidated26
Note 4 - Interim Consolidated Financial Statement Details (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | Jan. 01, 2017 | |
Inventory Valuation Reserves | $ 827 | $ 827 | $ 442 | ||
Depreciation | 2,789 | $ 3,066 | |||
Impairment of Long-Lived Assets Held-for-use | 1,601 | ||||
Property, Plant and Equipment, Net | 10,962 | 10,962 | 14,437 | ||
Accumulated Depreciation, Depletion and Amortization, Sale or Disposal of Property, Plant and Equipment | 870 | ||||
UNITED STATES | |||||
Impairment of Long-Lived Assets Held-for-use | 1,025 | ||||
Long-lived Assets, Fair Value Assumption, Revenue Projection Decreased by One Percent, Recoverable Amount | 110 | 110 | |||
Machinery and Equipment [Member] | |||||
Capital Leased Assets, Gross | 533 | 533 | 2,193 | ||
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 207 | 207 | $ 673 | ||
Impairment of Long-Lived Assets Held-for-use | 576 | ||||
Property, Plant and Equipment, Transfers and Changes | 0 | ||||
Machinery and Equipment [Member] | Corporate Segment [Member] | |||||
Property, Plant and Equipment, Net | 130 | 130 | |||
Machinery and Equipment [Member] | UNITED STATES | |||||
Impairment of Long-Lived Assets Held-for-use | 0 | ||||
Property, Plant and Equipment, Net | 1,255 | 1,255 | |||
Long-lived Assets, Fair Value Assumption, Effect of One Percent Increase in WACC on Impairment | 37 | 37 | |||
Machinery and Equipment [Member] | CHINA | |||||
Impairment of Long-Lived Assets Held-for-use | 0 | ||||
Long-lived Assets, Fair Value Assumption, Revenue Projection Decreased by One Percent, Recoverable Amount | 641 | 641 | |||
Long-lived Assets Evaluated for Impairment | 1,510 | 1,510 | |||
Long-lived Assets, Amount in Excess of Carrying Value | 1,122 | 1,122 | |||
Machinery and Equipment [Member] | CHINA | Impaired Assets Group 1 [Member] | |||||
Property, Plant and Equipment, Net | 446 | 446 | |||
Machinery and Equipment [Member] | Assets Under Capital Lease [Member] | |||||
Depreciation | $ 15 | $ 78 | 148 | $ 233 | |
Impairment of Long-Lived Assets Held-for-use | $ 97 |
Note 4 - Interim Consolidated27
Note 4 - Interim Consolidated Financial Statement Details - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Oct. 01, 2017 | Jan. 01, 2017 | |
Trade accounts receivable | $ 23,866 | $ 22,284 | |
Other receivables | 284 | 511 | |
Allowance for doubtful accounts (a) | [1] | (985) | (171) |
Accounts receivable—net | 23,165 | 22,624 | |
Raw materials (a) | [1] | 15,948 | 14,863 |
Work in process | 2,614 | 1,557 | |
Finished goods | 2,139 | 3,678 | |
Parts | 516 | 576 | |
Inventories | 21,217 | 20,674 | |
Property, plant and equipment | 47,585 | 49,344 | |
Accumulated depreciation, property, plant and equipment | (36,623) | (34,907) | |
Property, Plant and Equipment, Net | 10,962 | 14,437 | |
Payroll | 2,540 | 2,134 | |
Professional services | 368 | 281 | |
Accrued liabilities | 5,814 | 4,604 | |
Land [Member] | |||
Property, plant and equipment | 1,648 | 1,648 | |
Accumulated depreciation, property, plant and equipment | |||
Building [Member] | |||
Property, plant and equipment | 9,852 | 9,852 | |
Accumulated depreciation, property, plant and equipment | (8,508) | (8,174) | |
Machinery and Equipment [Member] | |||
Property, plant and equipment | [1],[2],[3] | 30,308 | 31,615 |
Accumulated depreciation, property, plant and equipment | [1],[2],[3] | (24,160) | (22,460) |
Furniture and Fixtures [Member] | |||
Property, plant and equipment | 532 | 556 | |
Accumulated depreciation, property, plant and equipment | (405) | (438) | |
Computer Equipment [Member] | |||
Property, plant and equipment | 3,118 | 3,544 | |
Accumulated depreciation, property, plant and equipment | (2,516) | (2,842) | |
Leasehold Improvements [Member] | |||
Property, plant and equipment | 2,127 | 2,129 | |
Accumulated depreciation, property, plant and equipment | (1,034) | (993) | |
Customer Related [Member] | |||
Other accrued liabilities | 1,808 | 898 | |
Restructuring [Member] | |||
Other accrued liabilities | 185 | 27 | |
Vendor Related [Member] | |||
Other accrued liabilities | 396 | 613 | |
Other Accrued Liabilities [Member] | |||
Other accrued liabilities | $ 517 | $ 651 | |
[1] | The increase in the allowance for doubtful accounts from January 1, 2017 to October 1, 2017 predominantly related to one customer for which management has concluded a provision was required for the outstanding accounts receivable due to the deterioration of the credit risk associated with one customer. | ||
[2] | During 2017, the Company removed fully depreciated assets that were no longer in use with a cost and accumulated depreciation value of $870. The China segment impaired assets from machinery and equipment with net book value of $446.The corporate segment also impaired assets with net book value of $130. A total impairment loss was recorded of $576 in 2017. | ||
[3] | In accordance with ASC 360-10, the Company is required to evaluate for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Upon the occurrence of a triggering event, the Company assesses whether the estimated undiscounted cash flows expected from the use of the asset and the residual value from the ultimate disposal of the asset exceeds the carrying value. In 2017, the Company identified that operating results for its U.S. segment asset group did not meet its forecasted results, which was considered a triggering event related to its U.S. segment asset group. The Company estimated undiscounted cash flows and determined the carrying amounts was exceeded by the recoverable amount, and therefore performed a discounted cash flow analysis. The difference between the discounted cash flows and the carrying amount resulted in an impairment loss of $1,025 which was recorded in 2017. The net carrying amount of the U.S. asset group is $1,255. The estimate of discounted cash flows is sensitive to certain key assumptions, for instance, if our revenue projections are lower by 1%, the impairment would increase by $110. If there was a 1% increase in the weighted average cost of capital, the impairment would increase by $37. The Company calculated the impairment loss by discounting the future cash flows which was determined to represent the fair value of the asset group and deducted this from the carrying amount of the segment asset group. No triggering events were noted related to the U.S. segment for the three months ended October 1, 2017, and no additional impairment charge has been recorded. In 2017, the Company also identified that operating results for its China segment asset group did not meet forecasted results, which was considered a triggering event related to its China segment asset group. The net carrying amount of the China asset group is $1,510. The Company estimated undiscounted cash flows and determined a recoverable amount of $1,122 in excess of the net carrying value, therefore no impairment loss has been recorded in the third quarter of 2017. The key assumptions included in these cash flows are projected revenue based on management’s revised forecast and corresponding margins. The estimate of undiscounted cash flows are sensitive to these key assumptions, for instance, if our revenue projections are lower by 1%, the recoverable amount in excess of the carrying amount would be reduced to $641. As such, the Company continues to monitor for impairment triggers each quarter, which may result in future impairments in this asset group. There were no changes to any of the key assumptions used in evaluating this asset group for impairment during the third quarter of 2017. |
Note 4 - Interim Consolidated28
Note 4 - Interim Consolidated Financial Statement Details - Consolidated Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Revolving credit facility | $ 100 | $ 83 | $ 243 | $ 373 |
Long-term debt | 116 | 52 | 342 | 145 |
Amortization of deferred financing fees | 8 | 9 | 19 | 26 |
Obligations under capital leases | 5 | 20 | 21 | 54 |
Interest expense | $ 229 | $ 164 | $ 625 | $ 598 |
Note 5 - Debt (Details Textual)
Note 5 - Debt (Details Textual) - PNC Bank [Member] - USD ($) $ in Thousands | May 15, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Jan. 01, 2017 | Oct. 02, 2016 |
Debt Instrument, Face Amount | $ 10,000 | ||||
Line of Credit Facility, Periodic Payment | $ 500 | ||||
Long-term Line of Credit | $ 8,500 | $ 10,000 | |||
Revolving Credit Facility [Member] | |||||
Debt, Weighted Average Interest Rate | 4.80% | 4.20% | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 7,106 | 7,377 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 30,000 | $ 30,000 | |||
Debt Instrument, Interest Rate, Increase (Decrease) | 0.25% | ||||
Long-term Line of Credit | $ 5,909 | $ 2,731 | |||
Base Rate [Member] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | ||||
Debt Instrument, Basis Spread on Variable Rate, If Specified Fixed Charge Coverage Ratio is Maintained | 0.75% | ||||
Base Rate [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | ||||
Debt Instrument, Basis Spread on Variable Rate, If Specified Fixed Charge Coverage Ratio is Maintained | 0.25% |
Note 6 - Capital Stock (Details
Note 6 - Capital Stock (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,343,716 | |||
Employee Stock Option [Member] | ||||
Allocated Share-based Compensation Expense | $ 22 | $ 20 | $ 45 | $ 62 |
Restricted Stock Units (RSUs) [Member] | ||||
Allocated Share-based Compensation Expense | $ 55 | $ 99 | $ 228 | $ 281 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 111,200 | |||
Executive Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,343,716 | |||
Executive Officer [Member] | Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting, First Share Price Trigger | $ 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting, Second Share Price Trigger | 3 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting, Third Share Price Trigger | 4 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting, Fourth Share Price Trigger | 5 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting, Fifth Share Price Trigger | $ 6 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 90 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
Note 6 - Capital Stock - Common
Note 6 - Capital Stock - Common Shares Issued and Outstanding (Details) - Common Shares [Member] $ in Thousands | 9 Months Ended |
Oct. 01, 2017USD ($)shares | |
Balance (in shares) | shares | 16,510,180 |
Balance | $ | $ 391 |
Shares issued during period (in shares) | shares | 315,017 |
Shares issued during period, value | $ | $ 3 |
Balance (in shares) | shares | 16,825,197 |
Balance | $ | $ 394 |
Note 6 - Capital Stock - Stock
Note 6 - Capital Stock - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 01, 2017 | Jan. 01, 2017 | |
Balance, options outstanding (in shares) | 616,766 | |
Balance, outstanding weighted average exercise price (in dollars per share) | $ 1.82 | |
Balance, aggregate intrinsic value | $ 97 | $ 8 |
Balance, outstanding weighted average remaining contractual term (Year) | 8 years 255 days | 5 years 219 days |
Options granted, number of options (in shares) | 1,343,716 | |
Options granted, weighted average exercise price (in dollars per share) | $ 1.24 | |
Options expired, number of options (in shares) | (111,282) | |
Options expired, weighted average exercise price (in dollars per share) | $ 1.84 | |
Options forfeited, number of options (in shares) | (40,721) | |
Options forfeited, weighted average exercise price (in dollars per share) | $ 1.80 | |
Balance, options outstanding (in shares) | 1,808,479 | 616,766 |
Balance, outstanding weighted average exercise price (in dollars per share) | $ 1.39 | $ 1.82 |
Balance, options outstanding (in shares) | 333,798 | |
Balance, outstanding weighted average exercise price (in dollars per share) | $ 1.92 | |
Balance, exercisable weighted average remaining contractual term (Year) | 4 years 73 days |
Note 6 - Capital Stock - Valuat
Note 6 - Capital Stock - Valuation Assumptions of Stock Options (Details) - Black Scholes Weighted Average Assumptions [Member] - Stock Compensation Plan [Member] | 9 Months Ended |
Oct. 01, 2017$ / shares | |
Expected dividend yield | 0.00% |
Expected volatility | 42.70% |
Expected forfeiture | 30.00% |
Risk-free interest rate | 1.02% |
Expected option life in years (Year) | 5 years |
Weighted-average stock option fair value per option granted (in dollars per share) | $ 0.29 |
Note 6 - Capital Stock - Restri
Note 6 - Capital Stock - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Oct. 01, 2017 | Jan. 01, 2017 | |
Balance, outstanding options (in shares) | 1,090,126 | |
Balance, outstanding weighted average stock price (in dollars per share) | $ 1.22 | |
Balance, outstanding weighted average remaining contractual term (Year) | 332 days | 1 year 3 days |
RSU’s granted (in shares) | 111,200 | |
RSU’s granted (in dollars per share) | $ 1.39 | |
RSU’s vested and issued in shares (in shares) | (315,017) | |
RSU’s vested and issued in shares (in dollars per share) | $ 1.80 | |
RSU’s forfeited (in shares) | (261,606) | |
RSU’s forfeited (in dollars per share) | $ 0.89 | |
Balance, outstanding options (in shares) | 624,703 | 1,090,126 |
Balance, outstanding weighted average stock price (in dollars per share) | $ 1.06 | $ 1.22 |
Note 7 - Income Taxes (Details
Note 7 - Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Current Income Tax Expense (Benefit) | $ 173 | $ 97 | $ 468 | $ 200 |
Deferred Income Tax Expense (Benefit) | (95) | (81) | (243) | (96) |
Foreign Tax Authority [Member] | ||||
Current Income Tax Expense (Benefit) | 173 | 97 | 468 | 200 |
Foreign Tax Authority [Member] | Mexican Tax Authority [Member] | ||||
Deferred Income Tax Expense (Benefit) | $ (95) | $ (81) | $ (243) | $ (96) |
Note 8 - Earnings (Loss) Per 36
Note 8 - Earnings (Loss) Per Common Share (Details Textual) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Treasury Stock Method Dilutive Options Average Share Price Used | $ 1.27 | $ 1.52 | $ 1.31 | $ 1.47 |
Weighted Average Number Diluted Shares Outstanding Adjustment If there had Been Net Income | 663,400 | 1,046,730 | 696,177 | 1,048,074 |
Note 8 - Earnings (Loss) Per 37
Note 8 - Earnings (Loss) Per Common Share - Common Shares Outstanding for Basic and Diluted Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | ||
Basic weighted average shares outstanding (in shares) | 16,824,538 | 16,510,180 | 16,764,257 | 16,502,081 | |
Dilutive stock awards (1) (a) (b) (in shares) | [1],[2],[3] | 1,048,074 | |||
Diluted weighted average shares outstanding (in shares) | 16,824,538 | 16,510,180 | 16,764,257 | 17,550,155 | |
[1] | Dilutive options were determined using the treasury stock method, using an average price of $1.27 per share for three months ended October 1, 2017. As a result of the net loss for the three months ended October 1, 2017, diluted earnings per share was calculated using the basic weighted average shares outstanding as the effect of potential common shares would have been anti-dilutive. Had there been net income for the three months ended October 1, 2017, dilutive stock awards would have been calculated as 663,400 shares. For the nine months ended October 1, 2017, dilutive options were determined using the treasury stock method, using an average price of $1.31 per share. Total dilutive stock awards were calculated as 696,177 shares. | ||||
[2] | Dilutive options were determined using the treasury stock method, using an average price of $1.52 per share for three months ended October 2, 2016. As a result of the net loss for the three months ended October 2, 2016, diluted earnings per share was calculated using the basic weighted average shares outstanding as the effect of potential common shares would have been anti-dilutive. Had there been net income for the three months ended October 2, 2016, dilutive stock awards would have been calculated as 1,046,730 shares. For the nine months ended October 2, 2016, dilutive options were determined using the treasury stock method, using an average price of $1.47 per share. Total dilutive stock awards were calculated as 1,048,074 shares. | ||||
[3] | Dilutive stock awards include outstanding RSU’s and in-the money stock options determined using the treasury stock method |
Note 9 - Segmented Informatio38
Note 9 - Segmented Information (Details Textual) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | Jan. 01, 2017 | |
Sales Revenue, Net [Member] | |||||
Number of Major Customers | 2 | 2 | |||
Sales Revenue, Net [Member] | Major Customer1 [Member] | |||||
Concentration Risk, Percentage | 14.00% | 15.60% | 12.30% | 15.80% | |
Sales Revenue, Net [Member] | Major Customer2 [Member] | |||||
Concentration Risk, Percentage | 12.80% | 10.20% | 11.50% | 15.40% | |
Accounts Receivable [Member] | |||||
Number of Major Customers | 1 | 2 | 1 | ||
Concentration Risk, Percentage | 11.80% | ||||
Accounts Receivable [Member] | Major Customer1 [Member] | |||||
Concentration Risk, Percentage | 15.30% |
Note 9 - Segmented Informatio39
Note 9 - Segmented Information - Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Revenues | $ 34,417 | $ 42,683 | $ 100,590 | $ 128,218 |
Site Contribution | 2,974 | 3,634 | 7,951 | 11,603 |
Corporate allocations | 2,237 | 2,789 | 7,686 | 8,323 |
Unrealized foreign exchange (gain) loss on unsettled forward exchange contracts | 118 | 4 | (1,438) | (995) |
Interest | 229 | 164 | 625 | 598 |
Restructuring charges | 326 | 1,677 | 176 | |
Earnings (loss) before income taxes | (473) | (3) | (6,716) | 448 |
Additions and Disposals to PP&E | 450 | 377 | 1,138 | 1,653 |
MEXICO | ||||
Revenues | 23,907 | 24,716 | 70,382 | 76,925 |
UNITED STATES | ||||
Revenues | 6,216 | 4,941 | 14,987 | 15,354 |
UNITED STATES | Customers by Invoice Location [Member] | ||||
Revenues | 27,044 | 29,470 | 77,219 | 83,848 |
CHINA | ||||
Revenues | 4,294 | 13,026 | 15,221 | 35,939 |
CHINA | Customers by Invoice Location [Member] | ||||
Revenues | 1,488 | 1,751 | 3,844 | 4,403 |
CANADA | Customers by Invoice Location [Member] | ||||
Revenues | 4,390 | 9,132 | 14,894 | 32,832 |
Europe [Member] | Customers by Invoice Location [Member] | ||||
Revenues | 592 | 1,497 | ||
Africa [Member] | Customers by Invoice Location [Member] | ||||
Revenues | 1,495 | 1,738 | 4,633 | 5,638 |
Reportable Geographical Components [Member] | ||||
Revenues | 37,160 | 45,000 | 108,654 | 134,901 |
Site Contribution | 2,437 | 2,954 | 1,834 | 8,550 |
Additions and Disposals to PP&E | 450 | 363 | 1,014 | 1,468 |
Reportable Geographical Components [Member] | MEXICO | ||||
Revenues | 23,907 | 24,857 | 70,394 | 77,321 |
Site Contribution | 2,346 | 1,642 | 5,031 | 6,513 |
Additions and Disposals to PP&E | 220 | 256 | 400 | 590 |
Reportable Geographical Components [Member] | UNITED STATES | ||||
Revenues | 6,319 | 5,009 | 15,229 | 15,689 |
Site Contribution | (55) | (331) | (2,169) | (771) |
Additions and Disposals to PP&E | 171 | 12 | 480 | 303 |
Reportable Geographical Components [Member] | CHINA | ||||
Revenues | 6,934 | 15,134 | 23,031 | 41,891 |
Site Contribution | 146 | 1,643 | (1,028) | 2,808 |
Additions and Disposals to PP&E | 59 | 95 | 134 | 575 |
Corporate, Non-Segment [Member] | ||||
Additions and Disposals to PP&E | 14 | 124 | 185 | |
Geography Eliminations [Member] | ||||
Revenues | (2,743) | (2,317) | (8,064) | (6,683) |
Geography Eliminations [Member] | MEXICO | ||||
Revenues | (141) | (12) | (396) | |
Geography Eliminations [Member] | UNITED STATES | ||||
Revenues | (103) | (68) | (242) | (335) |
Geography Eliminations [Member] | CHINA | ||||
Revenues | $ (2,640) | $ (2,108) | $ (7,810) | $ (5,952) |
Note 9 - Segmented Informatio40
Note 9 - Segmented Information - Long-lived Assets in Individual Geographic Areas (Details) - USD ($) $ in Thousands | Oct. 01, 2017 | Jan. 01, 2017 | |
Long-lived assets | [1] | $ 10,962 | $ 14,437 |
Corporate, Non-Segment [Member] | |||
Long-lived assets | [1] | 210 | 219 |
MEXICO | Reportable Geographical Components [Member] | |||
Long-lived assets | [1] | 7,988 | 8,858 |
CHINA | Reportable Geographical Components [Member] | |||
Long-lived assets | [1] | 1,510 | 3,046 |
UNITED STATES | Reportable Geographical Components [Member] | |||
Long-lived assets | [1] | $ 1,254 | $ 2,314 |
[1] | Property, plant and equipment information is based on the principal location of the asset. |
Note 10 - Derivative Financia41
Note 10 - Derivative Financial Instruments (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | Jan. 01, 2017 | |
Unrealized Gain (Loss) on Derivatives | $ (118) | $ (4) | $ 1,438 | $ 995 | |
Gain (Loss) on Sale of Derivatives | 271 | (619) | (179) | (2,197) | |
Derivative Asset, Current | 182 | 182 | $ 0 | ||
Derivative Liability, Current | 0 | 0 | $ 1,256 | ||
Foreign Currency Transaction Gain (Loss), before Tax | $ 67 | $ 99 | $ (13) | $ 203 |
Note 10 - Derivative Financia42
Note 10 - Derivative Financial Instruments - Outstanding Foreign Currency Forward Contracts (Details) - 9 months ended Oct. 01, 2017 CAD in Thousands, $ in Thousands, MXN in Millions | USD ($) | CAD | MXN |
Buy/Sell | Buy | ||
Foreign Currency Amount | MXN | MXN 154 | ||
Notional Contract Value in USD | $ 8,171 | ||
Canada, Dollars | |||
Buy/Sell | Buy | ||
Foreign Currency Amount | CAD | CAD 3,020 | ||
Notional Contract Value in USD | $ 2,323 |
Note 10 - Derivative Financia43
Note 10 - Derivative Financial Instruments - Average USD Fair Value Measurements for Contracts Rates (Details) | Oct. 01, 2017 | Jan. 01, 2017 |
Average USD:CAD contract rate | 18.85% | 18.47% |
Average USD:CAD mark-to-market rate | 18.66% | 21.20% |
Canada, Dollars | ||
Average USD:CAD contract rate | 1.30% | 1.34% |
Average USD:CAD mark-to-market rate | 1.25% | 1.34% |
Note 11 - Restructuring Charg44
Note 11 - Restructuring Charges (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017USD ($) | Oct. 02, 2016USD ($) | Oct. 01, 2017USD ($) | Oct. 02, 2016USD ($) | |
Restructuring Charges | $ 326 | $ 1,677 | $ 176 | |
Employee Severance [Member] | ||||
Restructuring Charges | 300 | 1,677 | ||
Restructuring Reserve | $ 200 | $ 200 | ||
Employee Severance [Member] | MEXICO | ||||
Restructuring and Related Cost, Number of Positions Eliminated | 49 | |||
Employee Severance [Member] | CHINA | ||||
Restructuring and Related Cost, Number of Positions Eliminated | 105 | |||
Employee Severance [Member] | UNITED STATES | ||||
Restructuring and Related Cost, Number of Positions Eliminated | 22 | |||
Employee Severance [Member] | CANADA | ||||
Restructuring and Related Cost, Number of Positions Eliminated | 12 |
Note 11 - Restructuring Charg45
Note 11 - Restructuring Charges - Schedule of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2017 | Oct. 02, 2016 | Oct. 01, 2017 | Oct. 02, 2016 | |
Restructuring charges (note 11) | $ 326 | $ 1,677 | $ 176 | |
Employee Severance [Member] | ||||
Balance as at January 1, 2017 | 27 | |||
Restructuring charges (note 11) | 300 | 1,677 | ||
Payments | (1,519) | |||
Balance as at October 1, 2017 | $ 185 | $ 185 |
Note 12 - Commitments (Details
Note 12 - Commitments (Details Textual) - USD ($) $ in Thousands | Oct. 01, 2017 | Oct. 02, 2016 |
Purchase Obligation, Due in Next Twelve Months | $ 12,834 | $ 15,753 |