Core Viewpoint - Clearfield, Inc. will announce its financial results for the second quarter of fiscal 2025 on May 8, 2025, after market close, and will host a conference call to discuss these results with the investment community [1][2]. Company Overview - Clearfield, Inc. (NASDAQ: CLFD) specializes in designing, manufacturing, and distributing fiber optic management, protection, and delivery products for communications networks [3]. - The company operates a "fiber to anywhere" platform that meets the needs of various market segments, including traditional and alternative carriers, cable TV companies, utilities, municipalities, enterprises, data centers, and military markets [3]. - Clearfield is headquartered in Minneapolis, MN, and deploys over one million fiber ports annually [3].

Company Overview - Breezeline is the eighth-largest cable operator in the United States, providing Internet, TV, and Phone services across 13 states, including Pennsylvania [5] - The company is a subsidiary of Cogeco Communications, which also operates in Canada under the Cogeco Connexion name [5] Fiber Deployment - Breezeline will soon deploy fiber-to-the-home (FTTH) internet services in several Pennsylvania counties, including Johnstown, Altoona, Uniontown, and Clearfield [1] - The fiber activation aims to enhance internet connectivity for both homes and businesses in these areas [1] Technological Investment - The company is continuously investing in advanced technologies to accommodate the growing demand for internet data usage, aiming to deliver faster speeds and improved reliability [2] - High-speed internet is expected to provide significant economic benefits to local communities by attracting employers, fostering business innovation, and enhancing job growth and productivity [2] Community Impact - Breezeline's FTTH technology will offer ultrafast and reliable connectivity, which is essential for online learning, telemedicine, remote work, and cloud computing [2][3] - Current customers will have the opportunity to transition to the new fiber platform with free installation [3] Industry Recognition - The Broadband Communications Association of Pennsylvania commended Breezeline for its investment in state-of-the-art internet connectivity, highlighting the importance of fiber for future scalability [3]

Financial Performance - Net sales for the three months ended December 31, 2024, were $35,476,000, an increase of approximately 4%, or $1,246,000, from $34,230,000 for the same period in 2023[105] - Net sales to Broadband Service Providers increased to $33,440,000, up from $31,915,000, while sales to Legacy customers decreased to $2,036,000 from $2,376,000[105] - The Clearfield segment net sales increased by 6%, or $1,597,000, to $29,698,000 for the three months ended December 31, 2024, driven by increased demand from National Carrier and Community Broadband customers[120] - The Nestor Cables segment net sales decreased by 6%, or $351,000, to $5,778,000 for the three months ended December 31, 2024, due to decreased demand[122] Cost and Expenses - Cost of sales decreased by $2,239,000, or 8%, to $27,294,000 for the three months ended December 31, 2024, resulting in a gross profit increase of $3,486,000, or 74%, to $8,182,000[109] - Selling, general and administrative expenses decreased by $701,000, or 6%, to $12,158,000 due to cost management efforts[110] Loss and Net Income - Loss from operations decreased by approximately 51% to $3,975,000 for the three months ended December 31, 2024, compared to a loss of $8,162,000 for the same period in 2023[111] - Net loss for the three months ended December 31, 2024, was $1,906,000, or $0.13 per share, down from a net loss of $5,268,000, or $0.35 per share, for the same period in 2023[115] - The income tax benefit decreased to $426,000 for the three months ended December 31, 2024, from $951,000 for the same period in 2023, primarily due to decreased loss from operations[114] Cash Flow and Investments - As of December 31, 2024, the company's cash, cash equivalents, and short-term investments totaled $113,014,000, a decrease from $130,992,000 as of September 30, 2024[124] - The company reported net cash provided by operating activities of $7,150,000 for the three months ended December 31, 2024, compared to $10,800,000 for the same period in 2023[126][127] - The decrease in inventory was $6,871,000 for the three months ended December 31, 2024, attributed to reduced inventory purchases as the company utilized existing stock[126] - The company received proceeds from the maturity of investment securities of $54,476,000 during the three months ended December 31, 2024, compared to $51,068,000 in the same period of 2023[128][129] - Cash used for stock repurchases was $6,275,000 for the three months ended December 31, 2024, down from $12,184,000 in the same period of 2023[130][132] - The company invested $39,015,000 in investment securities during the three months ended December 31, 2024, compared to $47,748,000 in the same period of 2023[128][129] Operational Metrics - Order backlog as of December 31, 2024, was $26,028,000, an increase of 3.6% from $25,133,000 as of September 30, 2024, but a decrease of 40% from $43,451,000 as of December 31, 2023[107] - Days sales outstanding decreased by 11 days to 36 days as of December 31, 2024, compared to 47 days as of December 31, 2023[126] Market Risks - The company is exposed to market risks from fluctuations in foreign currency exchange rates, with a potential impact of approximately $144,000 on operating expenses if the Euro fluctuated by 10% against the U.S. Dollar[138]

Financial Data and Key Metrics Changes - The company reported first quarter fiscal 2025 net sales of $35.5 million, a 4% increase from $34.2 million in the prior year [17] - The net loss per share was $0.13, which was smaller than the guidance range [8] - The Clearfield segment net sales increased by 6% year over year, while the Nestor segment net sales decreased by 6% [18] Business Line Data and Key Metrics Changes - Clearfield segment net sales were $29.7 million, up 6% year over year, while Nestor segment net sales were $5.8 million, down 6% year over year [18] - The company anticipates a two-to-one ratio of connected homes to past homes as operators prioritize cash flow generation [18] Market Data and Key Metrics Changes - The company noted that many operators are initiating new multiyear projects, indicating strong demand independent of government funding [12] - The broadband equity access and deployment (BEAD) program is expected to contribute more meaningfully to revenue starting in fiscal 2026 [12] Company Strategy and Development Direction - Clearfield aims to establish itself as a one-stop shop for active cabinet deployments, adapting to industry dynamics with new products [10] - The company is focusing on enhancing European operations by accelerating MicroDuct production and targeting higher-margin solutions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term potential of the BEAD program despite near-term uncertainties due to changes in the US administration [13] - The company is actively monitoring the evolving tariff situation and developing contingency plans to mitigate potential cost increases [16] Other Important Information - The company opened a new facility in Estonia, which is projected to generate $7 million in MicroDuct production for the current fiscal year [19] - The company reiterated its fiscal 2025 outlook of net sales in the range of $170 million to $185 million, with Clearfield segment annual revenue growth expected to be in line with or above industry forecasts of 12.5% [20] Q&A Session Summary Question: Strength in large regional customers - Management indicated that there are multiple large regional providers contributing to sales, with a focus on passing products [25][30] Question: Visibility into customer forecasts and orders - Management noted increased quoting activity and positive indicators for long-term projects, although long-term purchase agreements are not yet in place [32][34] Question: Growth separation between Clearfield and Nestor segments - Management confirmed that Clearfield is expected to grow at or above market rates, while Nestor is anticipated to have flat revenues [42][47] Question: Community broadband opportunities - Management highlighted that community broadband initiatives are seeing increased engagement and planning, with expectations for sequential growth [66][70] Question: Gross margins outlook - Management indicated that gross margins are expected to be volume-dependent, with a goal of reaching the lower to mid-twenties by the fourth quarter [81][86]

Company Performance - Clearfield reported a quarterly loss of $0.13 per share, outperforming the Zacks Consensus Estimate of a loss of $0.31, and showing improvement from a loss of $0.35 per share a year ago, resulting in an earnings surprise of 58.06% [1] - The company posted revenues of $35.48 million for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.49%, but showing an increase from year-ago revenues of $34.23 million [2] - Clearfield has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Stock Outlook - Clearfield shares have increased approximately 19.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 3.1% [3] - The company's earnings outlook will be crucial for determining future stock movements, with current consensus EPS estimates at -$0.22 for the coming quarter and -$0.33 for the current fiscal year [4][7] - The current estimate revisions trend for Clearfield is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Wireless Equipment industry, to which Clearfield belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Clearfield (CLFD) Q1 2025 Earnings Call February 06, 2025 05:00 PM ET Company Participants Greg McNiff - Investor RelationsCheri Beranek - President & CEODaniel Herzog - Chief Financial OfficerMatt Cavanagh - Equity Research Associate Conference Call Participants Tim Savageaux - MD & Senior Research AnalystScott Searle - Managing Director, Senior Research Analyst Operator welcome to the Clearfield First Quarter twenty twenty five Conference Call. All participants will be in a listen only mode. A brief quest ...

Financial Performance - Net sales for Q1 2025 increased by 4% to $35.5 million compared to $34.2 million in Q1 2024[3]. - Gross profit rose to $8.2 million, a 74% increase from $4.7 million in the same quarter last year, resulting in a gross margin of 23.1%[3][7]. - Net loss narrowed to $1.9 million, or $(0.13) per diluted share, compared to a net loss of $5.3 million, or $(0.35) per diluted share, in Q1 2024[3][8]. - The company anticipates revenue growth in line with or above the industry forecast of 12.5% for fiscal 2025, maintaining annual revenue guidance of $170 million to $185 million[4][9]. - Expected net sales for Q2 2025 are projected to be between $37 million and $40 million, with a net loss per share range of $(0.16) to $(0.21)[9]. Operational Metrics - Order backlog as of December 31, 2024, was $26.0 million, reflecting a 3.6% increase from $25.1 million as of September 30, 2024, but a 40.1% decrease from $43.4 million a year ago[5]. - Operating expenses decreased by 5.5% to $12.2 million, representing 34.3% of net sales, down from 37.6% in the prior year[7]. - The company reported strong quoting activity and the initiation of new multi-year projects beyond connected homes and government-funded initiatives[4]. Cash Flow and Assets - Net cash provided by operating activities was $7,150 thousand, down from $10,800 thousand year-over-year[24]. - Cash and cash equivalents at the end of the year increased to $30,453 thousand from $34,484 thousand, reflecting a decrease of approximately 11.8%[24]. - Total current liabilities decreased from $24,352 million to $18,728 million, a reduction of about 23.2%[22]. - Long-term investments increased significantly from $24,505 million to $41,916 million, representing a growth of approximately 71.5%[22]. - Net cash provided by investing activities rose to $13,392 thousand compared to $908 thousand in the previous year[24]. Shareholder Equity and Stock Activity - Total assets decreased from $315,275 million to $303,230 million, a decline of approximately 3.3%[22]. - The total shareholders' equity decreased from $275,763 million to $267,435 million, a decline of about 3.0%[22]. - Share buy-backs totaled $6.2 million, with $18.7 million remaining available for future repurchases[6][8]. - The company engaged in a cashless exercise of stock options amounting to $9 thousand, indicating ongoing employee stock option activity[24]. Depreciation and Expenses - The company reported a depreciation and amortization expense of $1,838 thousand, up from $1,651 thousand year-over-year[24]. - Net loss for the three months ended December 31, 2024, was $1,906 thousand, an improvement from a net loss of $5,268 thousand in the same period of 2023[23]. Manufacturing and Cost Management - Clearfield's manufacturing sites are designed for redundancy and cost optimization, with a focus on mitigating potential tariff impacts on operations[11][12].

Core Viewpoint - Clearfield, Inc. reported a strong performance in fiscal Q1 2025, with increased revenues and improved gross margins, driven by demand for connected home products and effective cost management strategies [3][4][6]. Financial Performance - Net sales for Q1 2025 were $35.5 million, a 4% increase from $34.2 million in Q1 2024 [2][4]. - Gross profit rose to $8.2 million, up 74% from $4.7 million in the same quarter last year, resulting in a gross margin of 23.1%, compared to 13.7% in Q1 2024 [2][5]. - The company reported a net loss of $1.9 million, or $(0.13) per diluted share, significantly improved from a net loss of $5.3 million, or $(0.35) per diluted share, in Q1 2024 [2][8]. Operational Highlights - Order backlog as of December 31, 2024, was $26.0 million, reflecting a 3.6% increase from $25.1 million as of September 30, 2024, but a 40.1% decrease from $43.4 million a year earlier [4]. - Operating expenses decreased by 5.5% to $12.2 million, representing 34.3% of net sales, down from 37.6% in the prior year [7]. Management Insights - The company expressed optimism about strong quoting activity and new multi-year projects, indicating a robust demand environment [3]. - Management anticipates revenue growth for the Clearfield segment to align with or exceed the industry forecast of 12.5% for fiscal 2025 [3]. Future Outlook - Clearfield maintains its annual revenue guidance for fiscal 2025 between $170 million and $185 million, with expected net sales for Q2 2025 projected to be between $37 million and $40 million [9]. - The company is closely monitoring the evolving tariff situation, which may impact future operations, but believes its manufacturing strategy provides some mitigation against potential cost increases [10][11][12].

Earnings Announcement - Clearfield Inc will release its Q1 fiscal 2025 results on February 6 2025 after market close [1] - The company will host a conference call at 5:00 PM Eastern time to discuss financial results [1] - Financial results and a shareholder letter will be available on the Investor Relations section of the company's website [2] Conference Call Details - Conference call dial-in numbers: US 1-877-407-0792 International 1-201-689-8263 [2] - The call will be webcast live and available for replay [2] - Audio replay available after 8:00 PM Eastern time on February 6 through February 20 2025 [2] - Replay dial-in numbers: US 1-844-512-2921 International 1-412-317-6671 Replay ID 13751115 [3] Company Overview - Clearfield Inc designs manufactures and distributes fiber optic management protection and delivery products [3] - The company serves traditional carriers alternative carriers MSO/cable TV companies utility/municipality enterprise data center and military markets [3] - Clearfield deploys over 1 million fiber ports annually and is headquartered in Minneapolis MN [3]

Financial Performance - Net sales for fiscal year 2024 decreased by 38% to $166.7 million from $268.7 million in fiscal year 2023, primarily due to decreased demand in the Clearfield segment's core markets[159][160] - Gross profit for fiscal year 2024 decreased by 66% to $28.9 million, with gross profit margin dropping to 17.3% from 31.7% in fiscal year 2023, impacted by lower sales and unabsorbed overhead[162][163] - The company reported a net loss of $12.5 million for fiscal year 2024, compared to a net income of $32.5 million in fiscal year 2023[169] - Clearfield segment net sales decreased by 44% ($100.154 million) for fiscal year 2024 compared to 2023, driven by reduced sales to Community Broadband, MSO/Cable TV, and Large Regional customers[185] - Clearfield segment net loss increased by 128% ($41.348 million) for fiscal year 2024, primarily due to lower gross profit margins and inventory reserves[186] - Nestor Cables segment net sales decreased by 4% ($1.861 million) for fiscal year 2024, excluding sales to the Clearfield segment[188] - Nestor Cables segment net loss increased by 112% ($3.638 million) for fiscal year 2024, driven by lower gross profit margins and higher operating expenses[188] Market and Sales Trends - Sales to the Community Broadband market decreased by 41% to $66.0 million in fiscal year 2024, while sales to the MSO/Cable TV market decreased by 49% to $23.5 million[160] - International sales represented 27% of net sales in fiscal year 2024, up from 19% in fiscal year 2023, reflecting the company's growing presence in global markets[159] - The acquisition of Nestor Cables in July 2022 contributed to a 226% increase in international sales to $49.9 million in fiscal year 2023[171] - Company's sales backlog decreased to $25.133 million as of September 30, 2024, from $57.285 million in 2023, due to reduced demand for fiber connectivity products[189] Expenses and Costs - Selling, general, and administrative expenses increased by 9% to $52.1 million in fiscal year 2024, driven by higher performance-based and stock-based compensation[164] - Rising costs including wages, logistics, components, and commodity prices are negatively impacting the company's profitability[234] - The company is subject to market risk from fluctuating market prices of certain purchased commodities and raw materials[234] - Inflation impacts the company's profitability, including cost of sales and operating expenses[234] - Inflation may have a material impact on the company's financial statements[234] Investments and Cash Flow - Net investment income increased to $7.5 million in fiscal year 2024, up from $5.2 million in fiscal year 2023, due to higher average investment balances and interest rates[166] - Company's combined cash, cash equivalents, and investments totaled $155.497 million as of September 30, 2024, compared to $174.456 million in 2023[190] - Net cash provided by operations for fiscal year 2024 totaled $22.223 million, including a net loss of $12.453 million and a decrease in inventory of $31.990 million[196] - Company received $162.064 million from maturities of investments and used $159.393 million to purchase new investments in fiscal year 2024[200] - Net cash used for financing activities during fiscal year 2024 was $36.907 million, primarily due to $33.058 million spent on stock repurchases[203] - Net cash provided by financing activities in fiscal year 2023 was $115,002,000, primarily from $130,262,000 in net proceeds from common stock issuance and $1,587,000 from borrowings on factored accounts receivables[204] - In fiscal year 2022, the company borrowed $16,700,000 to fund the acquisition of Nestor Cables, resulting in net cash provided by financing activities of $9,397,000[205] Stock Repurchase and Compensation - Company repurchased 1,164,190 shares for approximately $33.058 million during fiscal year 2024, leaving $24.923 million available in the $65 million stock repurchase program[195] - Stock-based compensation is measured using the Black-Scholes option pricing model, with fair value determined based on the company's stock price and assumptions about variables like expected stock price volatility and employee exercise behavior[209] Operational and Financial Policies - The company operates in two reportable segments: Clearfield and Nestor Cables, following the acquisition of Nestor Cables in July 2022[182] - The company has non-cancelable operating leases for office equipment in Minnesota, Mexico, Finland, and Estonia, expiring through August 2034, with certain leases having escalating rent provisions[206] - As of September 30, 2024, the company had a Finnish net operating loss (NOL) of $1,851,000 and a state NOL of $64,000, with no U.S. federal or Estonia NOL carry-forwards[214] - The company reviews long-lived assets for impairment if events indicate the carrying amount may not be recoverable, with no impairment charges recorded for the years ended September 30, 2024, 2023, and 2022[218][223] - Inventory is valued at the lower of cost or net realizable value, with regular reviews to identify and write down excess, slow-moving, or obsolete inventory[225] - The company adopted the FASB's CECL model for recognizing credit losses on financial instruments, effective October 1, 2023, with no material impact on consolidated financial statements[227] - The company plans to adopt new FASB standards on segment reporting (ASU 2023-07) and income tax disclosures (ASU 2023-09) for the fiscal year ending September 30, 2025[228][229] Future Outlook - The company expects gross profit margins to remain at or below current levels for several quarters until revenue levels increase[163]