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Concentration of Credit Risk
 6 Months Ended
Apr. 30, 2013
Risks and Uncertainties [Abstract]  
Concentration of Credit Risk

Note 6 - Concentrations of credit risk

 

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At April 30, 2013, the Company had cash and cash equivalent balances in excess of Federally insured limits in the amount of approximately $7.7 million.

 

One customer accounted for approximately 52% and 14% of the Company’s net sales for the six month periods ended April 30, 2013 and 2012, respectively. This same customer accounted for approximately 50% and 14% of the Company’s net sales for the three months ended April 30, 2013 and 2012, respectively. At April 30, 2013 and October 31, 2012, this customer’s account receivable balance accounted for approximately 41% and 49%, respectively, of the Company’s total net accounts receivable balances.  Although this customer has been an on-going major customer of the Company continuously during the past 15 years, the written agreements with this customer do not have any minimum purchase obligations and the customer could stop buying the Company’s products at any time and for any reason. A reduction, delay or cancellation of orders from this customer or the loss of this customer could significantly reduce the Company’s future revenues and profits.

 

Sales of one product line, Optiflex Cables, accounted for $3.0 million or 33% of total sales and $6.6 million or 34% of total sales to one customer for the three and six months ended April 30, 2013, respectively. The Company has a standard written purchase order with this customer and, therefore, this customer does not have any minimum purchase obligations and could stop buying the Optiflex products at any time. A reduction, delay or cancellation of orders from this product or the loss of this customer could significantly reduce the Company’s revenues and profits.