XML 26 R11.htm IDEA: XBRL DOCUMENT v2.4.0.8
6. Customer Concentrations
3 Months Ended
Mar. 31, 2014
Notes to Financial Statements  
Customer Concentrations

The Company sells its products primarily through high-volume distributors and retailers, Internet service providers, telephone service providers, value-added resellers, PC system integrators, and original equipment manufacturers ("OEMs"). The Company supports its major accounts in their efforts to discern strategic directions in the market, to maintain appropriate inventory levels, and to offer a balanced selection of attractive products.

 

Relatively few customers have accounted for a substantial portion of the Company’s revenues.  In the first quarter of 2014, three customers accounted for 73% of our total net sales with our largest customer accounting for 56% of our net sales. In the first quarter of 2013, three customers accounted for 63% of the Company’s total net sales with our largest customer accounting for 45% of our net sales.  One customer accounted for 73% of net accounts receivable on March 31, 2014.

 

The Company’s customers generally do not enter into long-term agreements obligating them to purchase products. The Company may not continue to receive significant revenues from any of these or from other large customers. A reduction or delay in orders from any of the Company’s significant customers, or a delay or default in payment by any significant customer could materially harm the Company’s business and prospects. Because of the Company’s significant customer concentration, its net sales and operating income (loss) could fluctuate significantly due to changes in political or economic conditions, or the loss, reduction of business, or less favorable terms for any of the Company's significant customers.