Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Revenue

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Note 5 - Revenue
 9 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

Note 5. Revenue

 

Revenue Recognition

 

Net sales include products and shipping and handling charges. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. We recognize revenue by transferring the promised products to the customer, with substantially all revenue recognized at the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.

 

Disaggregation of Revenue

 

The Company allocates sales from external customers to geographic areas based on the location to which the product is transported. Sales outside the United States are principally to countries in the Caribbean, Canada, Central and South America.

 

Our revenues related to the following geographic areas were as follows for the three and nine months ended:

 

   

Three Months Ended June 30,

    

Nine Months Ended June 30,

  
   

2020

    

2019

    

2020

    

2019

  

United States

   $ 25,090,614     $ 20,243,754     $ 62,765,455     $ 55,861,025  

All other countries

     879,431       1,648,490       2,991,090       5,204,734  

Total Net Sales

   $ 25,970,045     $ 21,892,244     $ 65,756,545     $ 61,065,759  

 

Clearfield manufactures and sells a proprietary product line designed for the Broadband Service Provider marketplace. In addition, the Company provides Build-to-Print services for original equipment manufacturers requiring copper and fiber cable assemblies built to their specification.

 

 

The percentages of our sales by markets were as follows for the three and nine months ended:

 

   

Three Months Ended June 30,

    

Nine Months Ended June 30,

  
   

2020

    

2019

    

2020

    

2019

  

Broadband service providers

     97 %     97 %     96 %     95 %

Build-to-print customers

     3 %     3 %     4 %     5 %

Total Net Sales

     100 %     100 %     100 %     100 %

 

Broadband Service Providers are made up of Community Broadband, which includes local and regional telecom companies, utilities, municipalities and alternative carriers, also referred to as Tier 2 and 3 customers, National Carriers, which includes large national and global wireline and wireless providers also referred to as Tier 1’s, multiple system operators (“MSO’s”), which include cable television companies, and international customers.

 

 

Accounts Receivable

 

Credit is extended based on the evaluation of a customer’s financial condition, and collateral is generally not required. Accounts that are outstanding longer than the contractual payment terms are considered past due. The Company writes off accounts receivable when they become uncollectible; payments subsequently received on such receivables are credited to the allowance for doubtful accounts. As of both June 30, 2020 and September 30, 2019, the balance in the allowance for doubtful accounts was $289,085.

 

See Note 7, “Major Customer Concentration” for further information regarding accounts receivable and net sales.