Accounts Receivable

9 Months Ended

Sep. 30, 2011

Receivables [Abstract]

Accounts Receivable

NOTE C – Accounts Receivable

Amounts financed under our in-house credit programs were, as a percent of net sales, approximately 5.6% during the first nine months of 2011. The credit program selected most often by our customers is “12 months no interest with equal monthly payments.”  The terms of the other programs vary as to payment terms (30 days to four years) and interest rates (0% to 21%).  The receivables are collateralized by the merchandise sold.

Accounts receivable balances resulting from certain credit promotions have scheduled payment amounts which extend beyond one year. These receivable balances have been historically collected earlier than the scheduled dates. The amounts due per the scheduled payment dates approximate as follows:  $11,247,000 in one year, $779,000 in two years, $70,000 in three years and $14,000 beyond three years for receivables outstanding at September 30, 2011.

Accounts receivable are shown net of the allowance for doubtful accounts of $550,000 and $700,000 at September 30, 2011 and December 31, 2010, respectively. We provide an allowance utilizing a methodology which considers the balances in problem and delinquent categories of accounts, historical write-offs, existing economic conditions and management judgment. Interest assessments are continued on past-due accounts but no “interest on interest” is recorded. Delinquent accounts are generally written off automatically after the passage of nine months without receiving a full scheduled monthly payment. Accounts are written off sooner in the event of a discharged bankruptcy or other circumstances that make further collections unlikely.

We age our receivables using the recency measurement method.  In recency aging, delinquency is measured based on the number of days since the last full payment.  Delinquency is the primary indicator of credit quality.  The following is an aging analysis of our receivables and balances segregated by method of impairment evaluation (in thousands):

Aging Category	September 30, 2011		December31, 2010
30 - 59 days	$	335	$	368
60 - 89 days		115		112
90 - 119 days		75		57
120-179 days		150		182
180 days or longer		146		151
Total Past-due		821		870
Unclassified		223		294
Current		11,066		13,902
	$	12,110	$	15,066
Individually evaluated for impairment	$	429	$	464
Collectively evaluated for impairment	$	11,681	$	14,602

In our recency aging, if an account has a payment recorded within the past 30 days but remains contractually delinquent, then the balance is placed in the unclassified category.

The following details the activity within the allowance account:

(in thousands)	Three Months Ended September 30, 2011			Nine Months Ended September 30, 2011
Allowance for doubtful accounts:
Beginning balance:	$	575		$	700
Charge-offs		(108	)		(433	)
Recoveries	$	60			159
Provisions		23			124
Ending balance:	$	550		$	550
Ending balance: individually evaluated for impairment	$	354		$	354
Ending balance: collectively evaluated for impairment	$	196		$	196

We believe that the carrying value of existing customer receivables, net of allowances, approximates fair value because of their short average maturity. Concentrations of credit risk with respect to customer receivables are limited due to the large number of customers comprising our account base and their dispersion across 17 states.