Note 12. Concentrations of Risks
Sales and Credit Risks
The Company sells to customers globally. Credit evaluations of the Companys customers financial condition are performed periodically, and the Company generally does not require collateral from its customers. One customer, TTI, Inc., accounted for over 10% of the Companys net sales in the quarters and six month periods ended September 30, 2011 and 2010. There were no customers accounts receivable balances exceeding 10% of gross accounts receivable at September 30, 2011 or March 31, 2011.
Electronics distributors are an important distribution channel in the electronics industry and accounted for 44% and 51% of the Companys net sales in the six month periods ended September 30, 2011 and 2010, respectively. As a result of the Companys concentration of sales to electronics distributors, the Company may experience fluctuations in the Companys operating results as electronics distributors experience fluctuations in end-market demand or adjust their inventory stocking levels.
As of September 30, 2011, KEMET had approximately 10,400 employees, of which 680 are located in the United States, 5,070 in Mexico, 2,520 in Asia and 2,130 in Europe. The number of employees represented by labor organizations at KEMET locations in each of the following countries is: 4,000 hourly employees in Mexico (as required by Mexican law), 700 employees in Italy, 690 employees in Indonesia, 300 employees in Portugal, 220 employees in China, 290 employees in Bulgaria, 220 employees in Finland and 90 employees in Sweden. For fiscal year 2011 and the current fiscal year to date, the Company has not experienced any major work stoppages. The Companys labor costs in Mexico, Asia and various locations in Europe are denominated in local currencies, and a significant depreciation or appreciation of the United States dollar against the local currencies would increase or decrease our labor costs.