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CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS
9 Months Ended
Sep. 30, 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 and nine months ended September 30, 2017 and 2016. One division accounted for approximately 23.2% and 24.3% of net sales for the three and nine months ended September 30, 2017, respectively, and approximately 19.7% and 19.0% of net sales for the three and nine months ended September 30, 2016. The second division accounted for approximately 1.0% and 1.5% of net sales for the three and nine months ended September 30, 2017, respectively, and approximately 2.4% and 4.3% of net sales for the three and nine months ended September 30, 2016. Together they accounted for approximately 24.2% and 25.8% of net sales for the three and nine months ended September 30, 2017 and approximately 22.1% and 23.3% of net sales for the three and nine months ended September 30, 2016. Accounts receivable from the customer at September 30, 2017 and December 31, 2016 represented approximately 19.2% and 13.6% of our total accounts receivable, respectively.

 

Export sales represented approximately 18.0% and 13.0% of net sales for the three months ended September 30, 2017 and 2016, respectively. Export sales represented 15.8% and 12.2% of net sales for the nine months ended September 30, 2017 and 2016, respectively.