CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

3 Months Ended

Mar. 31, 2016

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 two high-credit quality financial institutions.  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.

Our largest customer has two divisions that together accounted for approximately 10% or more of our net sales during the three months ended March 31, 2016 and 2015.  One division accounted for approximately 17% of net sales for the three months ended March 31, 2016 and 2015, respectively.  The other division accounted for approximately 7% and 9% of net sales for the three months ended March 31, 2016 and 2015, respectively.  Together, they accounted for approximately 24% and 26% of net sales for the three months ended March 31, 2016 and 2015, respectively.  Accounts receivable from the customer at March 31, 2016 and December 31, 2015 represented approximately 17% of our total accounts receivable, respectively.

Export sales represented approximately 11% and 7% of net sales for the three months ended March 31, 2016 and 2015, respectively.