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Note 9 - Leases | 12 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] | Note 9. Leases Clearfield, Inc. leases an 85,000 square foot facility at 7050 Winnetka Avenue North, Brooklyn Park, Minnesota consisting of corporate offices, manufacturing and warehouse space. The lease term is ten years and two months, ending on February 28, 2025, and is renewable. The renewal options have not been included within the lease term because it is not reasonably certain that the Company will exercise either option. In July 2021, Clearfield, Inc. entered into an indirect lease arrangement for an approximately 318,000 square foot manufacturing facility in Tijuana, Mexico. The lease term is for 7 years of which 5 years are mandatory, commencing March 2022. The lease contains written options to renew for two additional consecutive periods of 5 years each. The lease calls for monthly rental payments of $162,000, increasing 2% annually. The renewal options have not been included within the lease term because it is not reasonably certain that the Company will exercise either option. On November 19, 2021, Clearfield, Inc. signed a lease for a 105,000 square foot warehouse in Brooklyn Park, Minnesota. The lease term is five years commencing March 2022 and ending on February 28, 2027, with rent payments increasing annually. The lease includes an option to extend the lease for an additional five years. The renewal option has not been included within the lease term because it is not reasonably certain that the Company will exercise the option. The lease commenced in the second quarter of fiscal 2022. Nestor Cables leases an approximately 25,000 square foot manufacturing facility in Oulu, Finland, which is utilized for the operations of Nestor Cables. The original lease term ended on October 31, 2022, but auto renews indefinitely until terminated with two years written notice. It is not reasonably certain that the Company will not exercise the termination option. The lease calls for monthly rental payments of approximately $40,000. Rent is increased each year on January 1st based upon the cost-of-living index published by the Finnish government. On May 11, 2023, Nestor Cables signed a lease for an approximately 49,000 square foot manufacturing facility in Tabasalu, Estonia, to be utilized for the operations of Nestor Cables Baltics. The lease is without a fixed term and requires two years’ written notice to terminate the lease. Additionally, the lease grants to Nestor Cables the option to lease an expansion facility that is to be constructed no later than August 31, 2024. The expansion facility will be constructed on the same premises as the existing facility. Once the expansion option is exercised and the expansion facility is made available for use, the lease term of the existing facility will become a minimum of 60 months. The lease calls for monthly rental payments of approximately €20,400 until April 2024 and €25,000 afterwards. Rent is increased each year on May 1st based upon the cost-of-living index published by the Estonian government and capped at 5%. Right-of-use lease assets and lease liabilities are recognized as of the commencement date based on the present value of the remaining lease payments over the lease term which includes renewal periods we are reasonably certain to exercise. Our leases do not contain any material residual value guarantees or material restrictive covenants. Operating lease expense included within cost of sales and selling, general and administrative expense was as follows:
(In thousands) Operating lease expense under ASC842, Leases, within: |  | Year ended September 30, 2023 |  |  | Year ended September 30, 2022 |  |  | Year ended September 30, 2021 |
Cost of sales |  | $ | 4,067 |  |  | $ | 2,534 |  |  | $ | 999 |
Selling, general and administrative |  |  | 244 |  |  |  | 277 |  |  |  | 217 |
Total lease expense |  | $ | 4,311 |  |  | $ | 2,801 |  |  | $ | 1,216 |
Our future lease obligations for leases that have commenced were as follows as of September 30, 2023:
(In thousands) |  | Operating Leases |
FY 2024 |  | $ | 4,064 |
FY 2025 |  |  | 3,921 |
FY 2026 |  |  | 3,242 |
FY 2027 |  |  | 1,572 |
FY 2028 |  |  | 384 |
Thereafter |  |  | 2,626 |
Total lease payments |  |  | 15,809 |
Less: Interest |  |  | (1,443 | )
Present value of lease liabilities |  | $ | 14,366 |
As of September 30, 2023, the weighted average term and weighted average discount rate for our leases were 5.16 years and 3.59%, respectively. As of September 30, 2022, the weighted average term and weighted average discount rate for our leases were 4.04 years and 3.22%, respectively. As of September 30, 2021, the weighted average term and weighted average discount rate for our leases were 3.09 years and 3.41%, respectively. For the years ended September 30, 2023, 2022, and 2021 the operating cash outflows from our leases were $3,954,000, $2,064,000, and $1,290,000, respectively.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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