XML 47 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
Major Customers
 12 Months Ended
Jun. 30, 2012
Major Customers [Abstract]  
MAJOR CUSTOMERS

NOTE 10 – MAJOR CUSTOMERS

Information with respect to two customers, the identities of whom are protected by confidentiality agreements, both accounting for sales in excess of 10% of our total sales in each of the years ended June 30, 2012 and 2011, is as follows:

 

                                                                 
    As of and for the year ended June 30,  
    2012     2011  
    Sales     Percent of
Total		     Accounts
Receivable		     Percent of
Total		     Sales     Percent of
Total		     Accounts
Receivable		     Percent of
Total		  

Customer 1

   $ 6,710,000       39 %    $ 57,000       4 %    $ 12,289,000       51 %    $ 1,060,000       34 % 

Customer 2

   $ 5,721,000       33 %    $ 812,000       51 %    $ 4,371,000       18 %    $ 430,000       14 % 

 

Our largest customer (the “Customer”) informed us in December 2009 that it was in the process of developing, and planned to eventually manufacture, its own surgical devices which were functionally comparable to the products the Company provided to the Customer at that time. Pro-Dex had been the exclusive manufacturer of these products since they were developed. Through May 2012, we provided the Customer with two products (“Product A” and “Product B”) and repair services for both products. Sales for each of these categories for the years ended June 30, 2012 and 2011 were as follows:

 

                                 
    Sales  
    2012     2011  
    Amount     % of Total     Amount     % of Total  

Product A

   $ 1,734,000       26 %    $ 4,299,000       35 % 

Product B

     3,276,000       49 %      6,701,000       55 % 

Repairs

     1,700,000       25 %      1,289,000       10 % 
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 6,710,000       100 %    $ 12,289,000       100 % 
   

 

 

    

 

 

    

 

 

    

 

 

  

In June 2011, the Customer informed us that its product development had progressed to the point at which it did not plan to place any new orders with us for these products beyond those orders already placed with delivery dates through May 2012, and we have received no such new orders.

In addition, the Customer indicated that it planned to limit repair requests from us to those Products A and B that are covered by our product warranty. Although we continue to receive repair orders from the Customer, repair revenue (for out-of-warranty products) would decline to zero or a negligible amount should the Customer decide to cease placing new repair orders with us.

We are continuing to implement the steps of a strategic plan, the objectives of which are to identify and capture additional revenue opportunities and concurrently reduce operating costs not critical to revenue growth. There can be no assurance, however, as to either the timing or success of achieving these objectives, which, during any period not achieved, will cause us to experience a prolonged material and adverse impact on our business.