|ACETO CORP filed this Form 10-K/A on 11/09/2017|
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ACETO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2017, 2016 AND 2015
(in thousands, except per-share amounts)
As of June 30, 2017, the Company recorded a liability under the Plans of $3,551 (of which $3,337 is included in long-term liabilities and $214 is included in accrued expenses) and an asset (included in other assets) of $3,087, primarily representing mutual fund investments owned by the Company. As of June 30, 2016, the Company recorded a liability under the Plans of $3,046 (of which $3,028 is included in long-term liabilities and $18 is included in accrued expenses) and an asset (included in other assets) of $2,693, primarily representing the cash surrender value of policies owned by the Company.
(15) Financial Instruments
Derivative Financial Instruments
The Company is exposed to credit losses in the event of non-performance by the financial institutions, who are the counterparties, on its future foreign currency contracts. The Company anticipates, however, that the financial institutions will be able to fully satisfy their obligations under the contracts. The Company does not obtain collateral to support financial instruments, but monitors the credit standing of the financial institutions.
Fair Value of Financial Instruments
The carrying values of all financial instruments classified as a current asset or current liability are deemed to approximate fair value because of the short maturity of these instruments. The fair value of the Company’s notes receivable and accrued expenses was based upon current rates offered for similar financial instruments to the Company. The Company believes that borrowings outstanding under its long-term bank loans and mortgage approximate fair value because such borrowings bear interest at current variable market rates.
Business and Credit Concentration
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables. The Company’s customers are dispersed across many industries and are located throughout the United States as well as in Canada, France, Germany, Malaysia, The Netherlands, Switzerland, the United Kingdom, and other countries. The Company estimates an allowance for doubtful accounts based upon the creditworthiness of its customers as well as general economic conditions. Consequently, an adverse change in those factors could affect the Company’s estimate of this allowance. At June 30, 2017, three customers approximated 32%, 20% and 15%, respectively, of net trade accounts receivable. At June 30, 2016, three customers approximated 35%, 19% and 10%, respectively, of net trade accounts receivable.
One customer accounted for 12% of net sales in fiscal 2017, 14% of net sales in fiscal 2016 and 13% of net sales in fiscal 2015. Another customer accounted for 11% of net sales in fiscal 2017, 7% of net sales in 2016 and 6% of net sales in 2015. No single product accounted for as much as 10% of net sales in fiscal 2017, 2016 or 2015.
During the fiscal years ended June 30, 2017, 2016 and 2015, approximately 62%, 56% and 65%, respectively, of the Company’s purchases came from Asia and approximately 17%, 22% and 12%, respectively, came from Europe.
The Company maintains operations located outside of the United States. Net assets located in Europe and Asia approximated $68,235 and $50,641, respectively at June 30, 2017. Net assets located in Europe and Asia approximated $62,399 and $48,846, respectively at June 30, 2016.
(16) Commitments, Contingencies and Other Matters
As of June 30, 2017, the Company has outstanding purchase obligations totaling $61,381 with suppliers to the Company’s domestic and foreign operations to acquire certain products for resale to third party customers.
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