4.  Customer Concentrations and Accounts Receivable

 

Sales to Regatta Solutions, Inc. (“Regatta”) and E-Finity Distributed Generation, LLC (“E-Finity”), two of the Company’s domestic distributors, accounted for 17% and 10%, respectively, of revenue for the first quarter of Fiscal 2017. Sales to Horizon Power Systems, one of the Company’s domestic distributors, and Industrias Energeticas, S.A. de C.V., one of the Company’s Mexican distributors, accounted for 22% and 10%, respectively, of revenue for the first quarter of Fiscal 2016.

Additionally, Regatta, Dtc Soluciones Inmobiliarias S.A. de C.V. (“DTC”), one of the Company’s Mexican distributors, and E-Finity accounted for 20%, 17%, and 12%, respectively, of net accounts receivable as of June 30, 2016. DTC, Optimal Group Australia Pty Ltd, one of the Company’s Australian distributors, Reliable Secure Power Systems, one of the Company’s domestic distributors, and Regale Energy Zrt, the Company’s Hungarian distributor, accounted for 28%,  11%,  10% and 10%, respectively, of net accounts receivable as of March 31, 2016.

During the first quarter of Fiscal 2017, the Company recorded approximately $0.9 million in bad debt recovery primarily with respect to the collection of cash for receivables from Electro Mecanique Industries (“EMI”), one of the Company’s distributors in the Middle East and Africa. The Company recorded approximately $2.6 million during the second quarter of Fiscal 2015 with respect to the accounts receivable allowance from EMI. As of June 30, 2016, the accounts receivable allowance for EMI was cleared. There was no bad debt expense or recovery recorded during the first quarter of Fiscal 2016.

During the fourth quarter of Fiscal 2015 we shipped approximately $0.7 million of product to BPC Engineering (“BPC”), one of the Company’s Russian distributors. Given the uncertainty as to the collectability of the sale, revenue recognition on this shipment was deferred at that time. During the first quarter of Fiscal 2017, the remaining $0.5 million of deferred revenue for this shipment was fully recognized as revenue upon collection of the invoice.