Accounts Receivable and Allowance for Doubtful Receivables

6 Months Ended

Aug. 31, 2014

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 presents the activity in the Company’s allowance for doubtful receivables for the three and six months ended August 31, 2014 and August 31, 2013 (in thousands):

	Three months ended						Six months ended
	August 31,						August 31,
	2014			2013			2014			2013
Balance at beginning of period	$	3,718		$	2,707		$	3,672		$	3,952
Bad debt expense		87			1,099			231			2,198
Recoveries		8			14			19			19
Accounts written off		(229	)		(72	)		(338	)		(2,421	)
Balance at end of period	$	3,584		$	3,748		$	3,584		$	3,748