Risks and uncertainties

12 Months Ended

Jul. 31, 2014

Risks and uncertainties

6. Risks and uncertainties

We are subject to risks common to companies in the medical and security technology industries. These risks, which could have a material and negative impact on our business, financial condition, and results of operations, include, but are not limited to, loss of any significant customer, dependence on key suppliers, and U.S. and foreign regulatory clearances and approvals.

Customers

Our accounts receivable arise primarily from products sold and services provided in the U.S., Europe and Asia. The balance in accounts receivable represents the amount due from our domestic and foreign OEM customers, distributors and end users. The majority of our accounts receivable have standard payment terms that require payment within 30 days. We perform ongoing credit evaluations of our customers’ financial condition and continuously monitor collections and payments from our customers and maintain a provision for estimated credit losses based upon specific customer collection issues that have been identified. Amounts determined to be uncollectible are charged or written off against the reserve. To date, our historical write-offs of accounts receivable have been minimal.

Our ten largest customers as a group accounted for 66%, 68%, and 68% of our net product and engineering revenue for fiscal years 2014, 2013, and 2012, respectively. Set forth in the table below, are customers which individually accounted for 10% or more of our net revenue.

	Years Ended July 31,
	2014			2013			2012
Philips		16	%		15	%		14	%
L-3		11	%		12	%		12	%
Toshiba Corporation (“Toshiba”)		12	%		10	%		10	%
Siemens AG		11	%		*			*

Note (*): Total net revenue was less than 10% in this fiscal year.

Philips’, Toshiba’s, and Siemens’ revenues were primarily in the Medical Imaging segment and L-3’s revenue was in the Security Technology segment.

The following table summarizes the net accounts receivable due from our customers with net accounts receivable balances greater than or equal to 10% of our total net accounts receivable balance:

	As of July 31, 2014			As of July 31, 2013
Philips		16	%		18	%
L-3		16	%		16	%
Toshiba		11	%		*

Note (*): Total net accounts receivable was less than 10% in this fiscal year.