NOTE 7 – CONCENTRATIONS

Suppliers: The Company purchases critical components for our products, including injection molded parts and connectors from third parties, some of whom are single- or limited-source suppliers.  If any of our suppliers are unable to ship critical components, we may be unable to manufacture and ship products to our distributors or customers.  If the price of these components increases for any reason, or if these suppliers are unable or unwilling to deliver, we may have to find another source, which could result in interruptions, increased costs, delays, loss of sales and quality control problems.

Customers: For the fiscal year ended September 30, 2022, the Company had one customer that comprised 14% of net sales. This customer is a distributor. For the fiscal years ended September 30, 2021 and 2020, the Company had two customers that comprised 28% and 30% of net sales, respectively. Both of these customers were distributors. These major customers, like our other customers, purchase our products from time to time through purchase orders, and we do not have any agreements that obligate these major customers to purchase products in the future from us.

As of September 30, 2022, one customer accounted for 20% of accounts receivable. This customer is a distributor. As of September 30, 2021, one customer accounted for 17% of accounts receivable. This customer was a telecommunications service provider in the Company’s Community Broadband market.

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 customers in Europe, the Caribbean, Canada, and in Central and South America.

The following table presents our domestic and international sales for each of the last three fiscal years:

The Company sells its products to the Broadband Service Provider marketplace. In addition, the Company provides Legacy services for original equipment manufacturers requiring copper and fiber cable assemblies built to their specification. 

The percentages of our sales by these markets were as follows for each of the last three fiscal years:

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, MSO’s, which include cable television companies, and international customers.

Long-lived assets: As of September 30, 2022 and 2021, the Company had property, plant, and equipment with a net book value of $4,213,000, and $1,769,000, respectively, located in Mexico. In addition as of September 30, 2022, the Nestor Cables acquisition brought property, plant, and equipment with a net book value $6,916,000 and $280,000 in Oulu, Finland and Keila, Estonia, respectively. All other property, plant, and equipment is located within the United States.