Accounts receivable are reduced by an allowance for an estimate of amounts that are uncollectible. Substantially all of the Company’s receivables are due from customers in North America. The Company extends credit to its customers based upon its evaluation of the following factors: (i) the customer’s financial condition, (ii) the amount of credit the customer requests, and (iii) the customer’s actual payment history (which includes disputed invoice resolution). The Company does not typically require its customers to post a deposit or supply collateral. The Company’s allowance for credit losses is based on an analysis that estimates the amount of its total customer receivable balance that is not collectible. This analysis includes assessing a default probability to customers’ receivable balances, which is influenced by several factors including (i) current market conditions, (ii) periodic review of customer credit worthiness, and (iii) review of customer receivable aging and payment trends.

The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance in the period the payment is received. Credit losses have consistently been within management’s expectations.

The following table represents the activity in the Company’s allowance for credit losses for the fiscal years ended (in thousands):


	2024			2023			2022
Balance at beginning of year	$	1,710		$	1,200		$	961
Bad debt expense, net of recoveries		693			663			429
Accounts written off		(696	)		(153	)		(190	)
Balance at end of year	$	1,707		$	1,710		$	1,200


	February 29,		February 28,
	2024		2023
Trade Receivables, net of allowance for credit losses	$	39,665	$	44,645
Vendor Rebates		3,109		4,354
Notes Receivable		4,435		4,508
	$	47,209	$	53,507

The note receivable related to the sale of an unused manufacturing facility and was structured to be paid in 12 consecutive monthly installments, with a fixed interest rate of 5.95% per annum and a balloon payment due upon completion of the final payment. By mutual agreement, the note has been extended beyond the one-year maturity date due to regulatory delays in clearing the facility for third-party financing.