Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Reporting

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Note 12 - Segment Reporting
 9 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 12. Segment Reporting

 

The Company’s reportable segments are based on the Company’s method of internal reporting. These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented. The internal reporting of these operating segments is defined based, in part, on the reporting and review process used by the Company’s Chief Executive Officer.

 

Upon closing of the acquisition of Nestor Cables on July 26, 2022, the Company reassessed its operating segments as defined under Accounting Standards Codification (“ASC”) 280, Segment Reporting. Under ASC 280, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”), in deciding how to allocate resources and in assessing performance. Based upon the Company’s assessment, the Company determined that the business of Nestor Cables was considered a second reportable segment as of July 26, 2022.

 

For the third quarter of fiscal 2023, the Company has two reportable segments: (1) Clearfield; and (2) Nestor Cables. Clearfield’s Finnish holding company, Clearfield Finland Ltd., purchased Nestor Cables Ltd., including its Estonian subsidiary, Nestor Cables Baltics Ltd., on July 26, 2022. These entities comprise the Nestor Cables Segment. Prior to July 26, 2022, we were considered to be in a single reporting segment and operating unit structure.

 

Financial results for the reportable segments are prepared on a basis consistent with the internal disaggregation of financial information to assist the CODM in making internal operating decisions. For consolidated reporting, the Company eliminates transactions between reportable segments.

 

 

The following table summarizes the amounts between the two reportable segments for the three and nine months ended June 30, 2023:

 

   

Three months ended June 30, 2023

  
   

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  
(In thousands)                                

Revenue from external customers

   $ 47,856     $ 13,428     $ -     $ 61,284  

Revenue from internal customers (Clearfield, Inc.)

     -       1,869       (1,869 )     -  

Net investment income

     1,685       1       (56 )     1,630  

Interest expense

     -       252       (56 )     195  

Depreciation and amortization

     1,208       371       -       1,579  

Stock based compensation

     1,041       18       -       1,059  

Income taxes

     1,659       183       -       1,842  

Net income (loss)

     5,150       781       (713 )     5,218  

Capital expenditures

     1,472       258       -       1,729  

 

   

Nine months ended June 30, 2023

  
   

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  
(In thousands)                                

Revenue from external customers

   $ 186,662     $ 32,373     $ -     $ 219,035  

Revenue from internal customers (Clearfield, Inc.)

     -       4,792       (4,792 )     -  

Net investment income

     3,379       5       (56 )     3,328  

Interest expense

     170       437       (56 )     551  

Depreciation and amortization

     3,316       1,096       -       4,411  

Stock based compensation

     2,486       18       -       2,504  

Income taxes

     8,305       206       -       8,511  

Net income (loss)

     30,263       873       (1,299 )     29,837  

Capital expenditures

     5,961       570       -       6,531  

 

The following table summarizes the amounts between the two reportable segments as of June 30, 2023, and September 30, 2022:

 

   

June 30, 2023

  
   

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  
(In thousands)                                

Goodwill

   $ 4,709     $ 1,872     $ -     $ 6,581  

Total assets

   $ 336,935     $ 49,598     $ (25,332 )   $ 361,201  

 

   

September 30, 2022

  
   

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  
(In thousands)                                

Goodwill

   $ 4,709     $ 1,693     $ -     $ 6,402  

Total assets

   $ 214,785     $ 31,023     $ (16,680 )   $ 229,128