Note 3 - Investments
|6 Months Ended|
Mar. 31, 2022
|Notes to Financial Statements|
|Investment [Text Block]||
Note 3. Investments
The Company invests in certificates of deposit (“CDs”) that are fully insured by the Federal Deposit Insurance Corporation (“FDIC”) as well as U.S. Treasury and money market securities. Historically, the Company’s investment portfolio had been classified as held-to-maturity and recorded at amortized cost. During the second quarter of fiscal 2022, the Company sold investments and has reclassified its investment portfolio to available-for-sale, which is reported at fair value. The unrealized gain or loss on investment securities is recorded in other comprehensive income, net of tax. The proceeds from sales of investments during the six months ended March 31, 2022 was $14,365,000. The Company recorded within earnings for the six months ended March 31, 2022, gross realized gains on the sale of $92,000 partially offset by gross realized losses of $53,000. The specific identification method is used to determine the cost of the securities sold. The Company’s sale of investment securities was associated with its need to respond to significant unanticipated and unprecedented growth in its sales order backlog coupled with supply chain challenges to obtain the inventory necessary for fullfilment of these orders, as well as the reevaluation of the Company’s approach to use of available capital.
At March 31, 2022, available-for-sale investments consist of the following:
At March 31, 2022, investments in debt securities in an unrealized loss position were as follows:
As of March 31, 2022, there were 53 securities in an unrealized loss position which is due to the securities paying lower interest rates than the market. As of March 31, 2022, there are no securities which are other than temporarily impaired as the Company intends to hold these securities until their value recovers and there is negligible credit risk due to the nature of the securities which are backed by the FDIC and US federal government.
The entire disclosure for investment.
Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef