XML 40 R12.htm IDEA: XBRL DOCUMENT

Segment Information and Concentrations

9 Months Ended

Sep. 30, 2014

NOTE 7 — Segment Information and Concentrations

Segment Information

The Company operates in one segment—mobile systems solutions for businesses. Mobile systems solutions typically consist of a handheld computer or other mobile device such as a smartphone or tablet, some with data collection peripherals, and third-party vertical applications software. The Company markets its products in the United States and foreign countries through its sales personnel and distributors. Revenues for the geographic areas were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Revenues:
United States	$	3,681,834	$	2,492,640	$	9,980,944	$	8,296,712
Europe		945,172		656,571		2,165,576		2,140,903
Asia and rest of world		294,590		142,428		961,487		1,554,630
Total revenues	$	4,921,596	$	3,291,639	$	13,108,007	$	11,992,245

Export revenues are attributable to countries based on the location of the Company’s customers. The Company does not hold long-lived assets in foreign locations.

Major Customers

Customers who accounted for at least 10% of the Company’s total revenues in the three and nine month periods ended September 30, 2014 and 2013 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Ingram Micro Inc.		29	%		22	%		32	%		19	%
ScanSource, Inc.		20	%		26	%		19	%		22	%
BlueStar, Inc.		15	%		18	%		16	%		14	%
ScanSource Europe SPRL		12	%		*			*			*

_____________

* Customer accounted for less than 10% of total revenues for the period

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company invests its cash in demand and money market deposit accounts in banks. To the extent of the amounts recorded on the balance sheet, cash is concentrated at the Company’s bank to the extent needed to comply with the minimum liquidity ratio of the bank line agreement. To date, the Company has not experienced losses on these investments. The Company’s trade accounts receivables are primarily with distributors and original equipment manufacturers (OEMs). The Company performs ongoing credit evaluations of its customers’ financial conditions but the Company generally requires no collateral. Reserves are maintained for potential credit losses, and such losses have been within management’s expectations. Customers who accounted for at least 10% of the Company’s accounts receivable balances at September 30, 2014 and December 31, 2013 were as follows:

	September 30,			December 31,
	2014			2013
Company A		33	%		43	%
Company B		23	%		28	%
Company C		10	%		14	%
Company D		11	%		*

_____________

* Customer accounted for less than 10% of total accounts receivable balances

Concentration of Suppliers

Several of the Company’s component parts are produced by a sole or limited number of suppliers. Shortages could occur in these essential materials due to increased demand, or to an interruption of supply. Suppliers may choose to restrict credit terms or require advance payments causing delays in the procurement of essential materials. If the Company were unable to procure certain of such materials, it could have a material adverse effect upon its results. At September 30, 2014 and December 31, 2013, 21% and 28%, respectively, of the Company’s accounts payable balances were concentrated with the same single supplier. For the three months ended September 30, 2014, this supplier and two other suppliers accounted for 66% of the inventory purchases.