Accounts Receivable and Allowance for Doubtful Receivables

9 Months Ended

Nov. 30, 2011

Accounts Receivable and Allowance for Doubtful Receivables [Abstract]

Accounts Receivable and Allowance for Doubtful Receivables

2. Accounts Receivable and Allowance for Doubtful Receivables

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 doubtful receivables 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 from continuing operations have consistently been within management’s expectations.

The following table represents the activity in the Company’s allowance for doubtful receivables for the three and nine months ended (in thousands):

	Three months ended						Nine months ended
	November 30,						November 30,
	2011			2010			2011			2010
Balance at beginning of period	$	4,833		$	4,900		$	4,814		$	4,446
Bad debt expense		(473	)		63			69			1,367
Recoveries		12			11			184			46
Accounts written off		(36	)		(380	)		(731	)		(1,265	)
Foreign currency translation		(3	)		—			(3	)		—
Balance at end of period	$	4,333		$	4,594		$	4,333		$	4,594