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Note 18 - Business Segments
 6 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

18. Business Segments

 

The Company reports its financial results in two reportable business segments: Grid and Wind. In accordance with ASC 280, Segment Reporting, we aggregate four operating segments into one reporting segment for financial reporting purposes due to their similar operating and financial characteristics. Our operating segments reflect the way in which internally-reported financial information is used to make decisions and allocate resources.

 

Through the Company’s power grid offerings, the Grid business segment enables electric utilities, industrial facilities, and renewable energy project developers to connect, transmit and distribute smarter, cleaner and better power through its transmission planning services, power electronics, and superconductor-based systems. The sales process is enabled by transmission planning services that allow it to identify power grid congestion, poor power quality and other risks, which helps the Company determine how its solutions can improve network performance. These services often lead to sales of grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems.  The Company also sells ship protection products to the U.S. Navy through its Grid business segment.

 

Through the Company’s wind power offerings, the Wind business segment enables manufacturers to field highly competitive wind turbines through its advanced power electronics and control system products, engineered designs, and support services. The Company supplies advanced power electronics and control systems, licenses its highly engineered wind turbine designs, and provides extensive customer support services to wind turbine manufacturers. The Company’s design portfolio includes a broad range of drive trains and power ratings of 2 megawatts ("MWs") and higher. The Company provides a broad range of power electronics and software-based control systems that are highly integrated and designed for optimized performance, efficiency, and grid compatibility.

 

The operating results for the two business segments are as follows (in thousands):

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Revenues:

                

Grid

 $28,515  $25,698  $54,251  $45,527 

Wind

  5,489   1,982   10,007   4,833 

Total

 $34,004  $27,680  $64,258  $50,360 

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Operating income (loss):

                

Grid

 $(679) $(6,495) $(2,649) $(13,776)

Wind

  252   (868)  (398)  (1,254)

Unallocated corporate expenses

  (1,942)  (729)  (4,655)  (1,931)

Total

 $(2,369) $(8,092) $(7,702) $(16,961)

 

The accounting policies of the business segments are the same as those for the consolidated Company. The Company’s business segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measures are segment revenues and segment operating loss. The disaggregated financial results of the segments reflect allocation of certain functional expense categories consistent with the basis and manner in which Company management internally disaggregates financial information for the purpose of assisting in making internal operating decisions. In addition, certain corporate expenses which the Company does not believe are specifically attributable or allocable to either of the two business segments have been excluded from the segment operating loss.

 

Unallocated corporate expenses consisted of a loss on contingent consideration of $0.9 million and $2.2 million in the three and six months ended September 30, 2023, respectively. Unallocated corporate expenses consisted of a gain on contingent consideration of $0.3 million and $0.1 million in the three and six months ended September 30, 2022. Additionally, unallocated corporate expenses consisted of stock-based compensation expense of $1.1 million and $1.0 million in the three months ended  September 30, 2023 and 2022, respectively, and $2.5 million and $2.1 million in the six months ended  September 30, 2023 and 2022, respectively.

 

Total assets for the two business segments as of  September 30, 2023 and  March 31, 2023, are as follows (in thousands):

 

  

September 30, 2023

  

March 31, 2023

 

Grid

 $137,607  $135,296 

Wind

  9,750   14,361 

Corporate assets

  23,970   25,904 

Total

 $171,327  $175,561