CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

6 Months Ended

Jun. 30, 2011

CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

NOTE 2. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable.  With regard to cash, we maintain our excess cash balances in checking accounts at one high-credit quality financial institution.  These accounts may at times exceed federally insured limits.  We grant credit to customers in the normal course of business and do not require collateral on our accounts receivable.

One customer accounted for 10% or more of our net sales for the three and six months ended June 30, 2011 and 2010.  G.E.’s Medical Division accounted for 15% of net sales for the three and six months ended June 30, 2011.  G.E.’s Medical Division accounted for 19% of net sales for the three and six months ended June 30, 2010.  GE’s Transportation Division accounted for 9% and 7% of net sales for the three and six months ended June 30, 2011, respectively.  GE’s Transportation Division accounted for 10% of net sales for the three and six months ended June 30, 2010.  GE’s Medical and Transportation Divisions combined accounted for 24% and 22% of net sales for the three and six month periods ended June 30, 2011, respectively.  GE’s Medical and Transportation Divisions combined accounted for 29% of net sales for the three and six month periods ended June 30, 2010.  Accounts receivable from G.E.’s Medical and Transportation Divisions represented 15% and 14% of total accounts receivable at June 30, 2011 and December 31, 2010, respectively.