CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

3 Months Ended

Mar. 31, 2017

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 10% or more of our net sales during the three months ended March 31, 2017 and 2016. One division accounted for approximately 24.4% and 17.5% of net sales for the three months ended March 31, 2017 and 2016, respectively. The other division accounted for approximately 2.3% and 6.5% of net sales for the three months ended March 31, 2017 and 2016, respectively.  Together they accounted for approximately 26.7% and 24.0% of net sales for the three months ended March 31, 2017 and 2016, respectively.  Accounts receivable from the customer at March 31, 2017 and 2016 represented approximately 19.1% and 17.0% of our total accounts receivable, respectively.

Export sales represented approximately 13.4% and 11.1% of net sales for the three months ended March 31, 2017 and 2016, respectively.