5. Concentration of Credit Risk and Significant Customers and Suppliers

Customer Concentration – Approximately 43% of the Company’s net sales for fiscal 2013 and 45% for fiscal 2012 and fiscal 2011 were derived from sales to the Company’s top five customers. The Company’s largest customer accounted for approximately 16%, 17% and 16% of the Company’s net sales in fiscal years 2013, 2012, and 2011, respectively. The Company’s second largest customer in 2013 accounted for approximately 8% of the Company’s net sales in 2013 and 7% of the Company’s net sales in each of the fiscal years 2012 and 2011. The Company’s third largest customer accounted for approximately 8%, 9% and 12% of the Company’s net sales in fiscal years 2013, 2012, and 2011, respectively. The loss of, or significant adverse change in, the relationship between the Company and any of these three customers could have a material adverse effect on the Company’s business and financial results. The loss of or reduction in orders from any significant customer, losses arising from customer disputes regarding shipments, fees, merchandise condition or related matters, or the Company’s inability to collect accounts receivable from any major customer could also have a material adverse impact on the Company’s business and financial results. As of September 28, 2013 and September 29, 2012, accounts receivable from the Company’s top five customers comprised approximately 35% and 42% of the Company’s total accounts receivable, including 9% and 15% from the Company’s largest customer.

Supplier Concentration – While the Company purchases products from many different manufacturers and suppliers, approximately 11%, 9% and 12% of the Company’s cost of goods sold in fiscal years 2013, 2012, and 2011, respectively, were derived from products purchased from the Company’s five largest suppliers.