Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Reporting

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Note 12 - Segment Reporting
 3 Months Ended
Mar. 31, 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 second 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 six months ended March 31, 2023:

 

   

Three months ended March 31, 2023

  
(In thousands)  

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  

Revenue from external customers

   $ 60,451     $ 11,358     $ -     $ 71,809  

Revenue from internal customers (Clearfield, Inc.)

     -       1,737       (1,737 )     -  

Net investment income

     1,394       1       -       1,395  

Interest expense

     -       112       -       112  

Depreciation and amortization

     1,099       359       -       1,458  

Stock based compensation

     784       -       -       784  

Income taxes

     2,873       101       -       2,974  

Net income (loss)

     10,395       402       (433 )     10,364  

Capital expenditures

     2,481       98       -       2,579  

 

   

Six months ended March 31, 2023

  
(In thousands)  

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  

Revenue from external customers

   $ 138,806     $ 18,945     $ -     $ 157,751  

Revenue from internal customers (Clearfield, Inc.)

     -       2,923       (2,923 )     -  

Net investment income

     1,694       4       -       1,698  

Interest expense

     170       186       -       356  

Depreciation and amortization

     2,110       712       -       2,822  

Stock based compensation

     1,444       -       -       1,444  

Income taxes

     6,646       23       -       6,669  

Net income (loss)

     25,113       92       (586 )     24,619  

Capital expenditures

     4,490       308       -       4,798  

 

The following table summarizes the amounts between the two reportable segments as of March 31, 2023 and September 30, 2022:

 

   

March 31, 2023

  
(In thousands)  

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  

Goodwill

   $ 4,709     $ 1,878     $ -     $ 6,587  

Total assets

     332,906       43,135       (18,646 )     357,395  

 

   

September 30, 2022

  
(In thousands)  

Clearfield

    

Nestor Cables

    

Eliminations

    

Consolidated

  

Goodwill

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

Total assets

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