Concentration of Risk

3 Months Ended

Jul. 31, 2018

Concentration of Risks

Financial instruments that potentially subject the Company to concentrations of risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with major financial institutions and such balances may, at times, exceed Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash.

Credit is extended to customers based on an evaluation of each customer's financial condition and generally collateral is not required. The Company's customers operate in the new home construction and home remodeling markets.

The Company maintains an allowance for bad debt based upon management's evaluation and judgment of potential net loss. The allowance is estimated based upon historical experience, the effects of current developments and economic conditions and of each customer’s current and anticipated financial condition. Estimates and assumptions are periodically reviewed and updated. Any resulting adjustments to the allowance are reflected in current operating results.

At July 31, 2018, the Company's two largest customers, Customers A and B, represented 28.4% and 22.0% of the Company's gross customer receivables, respectively. At July 31, 2017, Customers A and B represented 10.3% and 15.6% of the Company’s gross customer receivables, respectively.

The following table summarizes the percentage of sales to the Company's two largest customers for the three months ended July 31, 2018 and 2017:



	PERCENT OF NET SALES
	Three Months Ended
	July 31,
	2018	2017
Customer A	29.1	18.4
Customer B	18.7	13.9