Annual report pursuant to Section 13 and 15(d)

Concentration of Credit Risk and Significant Customers and Suppliers

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Concentration of Credit Risk and Significant Customers and Suppliers
12 Months Ended
Sep. 27, 2014
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Concentration of Credit Risk and Significant Customers and Suppliers

5. Concentration of Credit Risk and Significant Customers and Suppliers

Customer Concentration – Approximately 41% of the Company’s net sales for fiscal 2014, 43% for fiscal 2013 and 45% for fiscal 2012 were derived from sales to the Company’s top five customers. The Company’s largest customer accounted for approximately 17%, 16%, and 17% of the Company’s net sales in fiscal years 2014, 2013, and 2012, respectively. The Company’s second largest customer in 2014 accounted for approximately 8% of the Company’s net sales in both 2014 and 2013 and 7% in 2012. The Company’s third largest customer accounted for approximately 7%, 8%, and 9% of the Company’s net sales in fiscal years 2014, 2013, and 2012, 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 27, 2014 and September 28, 2013, accounts receivable from the Company’s top five customers comprised approximately 37% and 35% of the Company’s total accounts receivable, including 11% and 9% from the Company’s largest customer.

Supplier Concentration – While the Company purchases products from many different manufacturers and suppliers, approximately 10%, 11%, and 9% of the Company’s cost of goods sold in fiscal years 2014, 2013, and 2012, respectively, were derived from products purchased from the Company’s five largest suppliers.