Clearfield(CLFD) - 2025 Q2 - Quarterly Results

Financial Highlights Clearfield achieved a significant turnaround in Q2 2025, with net sales up 28% to $47.2 million and a return to profitability Fiscal Q2 2025 Financial Summary (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $47.2M | $36.9M | $10.3M | 28% | | Gross Profit ($) | $14.2M | $2.8M | $11.4M | 401% | | Gross Profit (%) | 30.1% | 7.7% | 22.4% | 292% | | Net Income (Loss) | $1.3M | $(5.9)M | $7.2M | 122% | | Net Income (Loss) per Diluted Share | $0.09 | $(0.40) | $0.49 | 123% | Fiscal YTD 2025 Financial Summary (vs. YTD 2024) | Metric | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $82.6M | $71.1M | $11.5M | 16% | | Gross Profit ($) | $22.4M | $7.5M | $14.8M | 197% | | Gross Profit (%) | 27.1% | 10.6% | 16.5% | 156% | | Net Loss | $(0.6)M | $(11.2)M | $10.6M | -95% | | Net Loss per Diluted Share | $(0.04) | $(0.75) | $0.71 | -95% | - The company successfully returned to profitability in Q2 2025, generating a net income per diluted share of $0.09[6] Management Commentary Management attributes strong Q2 performance to robust demand and execution, confident in market share gains and minimal tariff impact - CEO Cheri Beranek stated that the net sales outperformance was driven by strong customer demand and solid execution, with faster and higher conversion of quoting activity into revenue[5] - CFO Dan Herzog credited the strong bottom-line performance and gross margin improvements to lower excess inventory reserve costs and increased production volumes[7] - Despite macroeconomic uncertainty, management remains confident in its ability to gain market share as demand and ordering patterns normalize[7] - The company does not believe the tariffs in their present form will materially affect its operating results[7] Detailed Financial Analysis This section details quarterly operational results, drivers of gross margin expansion, return to profitability, and financial outlook Q2 Fiscal 2025 Performance Q2 fiscal 2025 saw net sales grow 28% to $47.2 million, gross margin surge to 30.1%, and a net income of $1.3 million Sales and Backlog Performance (as of March 31, 2025) | Metric | Q2 2025 | Change vs. Q2 2024 | Change vs. Q1 2025 | | :--- | :--- | :--- | :--- | | Net Sales | $47.2M | +28% | N/A | | Order Backlog | $34.1M | -28% | +31% | - The increase in gross margin to 30.1% was driven by higher volumes in the Clearfield segment, leading to better manufacturing overhead utilization, and a $4.5 million reduction in excess inventory charges compared to the prior year[9] - The company repurchased approximately $4.7 million in shares during the quarter, with about $14 million remaining for future repurchases as of March 31, 2025[11] Fiscal 2025 Outlook Clearfield reiterates fiscal 2025 annual revenue guidance of $170M-$185M and projects Q3 net sales of $45M-$50M Fiscal 2025 Guidance | Period | Metric | Guidance Range | | :--- | :--- | :--- | | Full Year 2025 | Net Sales | $170M - $185M | | Q3 2025 | Net Sales | $45M - $50M | | Q3 2025 | Net Income per Share | $0.01 - $0.08 | - The provided guidance incorporates the company's current understanding of the tariff situation, which is not expected to have a material effect on operating results[12] Financial Statements This section presents Clearfield's unaudited condensed consolidated financial statements for periods ended March 31, 2025 Condensed Consolidated Statements of Earnings Clearfield reported Q2 2025 net sales of $47.2 million and a net income of $1.3 million, a significant improvement year-over-year Condensed Consolidated Statements of Earnings (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $47,168 | $36,910 | $82,644 | $71,140 | | Gross profit | $14,192 | $2,832 | $22,374 | $7,529 | | Income (Loss) from operations | $262 | $(9,741) | $(3,713) | $(17,903) | | Net income (loss) | $1,327 | $(5,911) | $(579) | $(11,179) | | Net income (loss) per share Diluted | $0.09 | $(0.40) | $(0.04) | $(0.75) | Condensed Consolidated Balance Sheets As of March 31, 2025, Clearfield's balance sheet shows total assets of $310.9 million, with increased cash and decreased inventories Selected Balance Sheet Items (in thousands) | | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $28,848 | $16,167 | | Inventories, net | $56,084 | $66,766 | | Total current assets | $206,268 | $229,595 | | Total Assets | $310,857 | $315,275 | | Total liabilities | $44,958 | $39,512 | | Total shareholders' equity | $265,899 | $275,763 | Condensed Consolidated Statements of Cash Flows For the six months ended March 31, 2025, Clearfield generated $10.2 million in operating cash flow, with cash increasing by $12.7 million Summary of Cash Flows (Six Months Ended March 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $10,198 | $5,094 | | Net cash provided by investing activities | $11,220 | $1,156 | | Net cash used in financing activities | $(8,755) | $(28,310) | | Increase (decrease) in cash | $12,681 | $(22,009) | - The primary use of cash in financing activities was the repurchase of common stock, amounting to $11.0 million for the six-month period[24] Other Information This section provides supplementary company details, including conference call logistics, corporate overview, and forward-looking statement cautions Conference Call Information Clearfield management will host a conference call on May 8, 2025, at 4:30 p.m. ET to discuss quarterly results, with replay available - A conference call hosted by CEO Cheri Beranek and CFO Dan Herzog is scheduled for May 8, 2025, at 4:30 p.m. Eastern Time[13] - Replay information is available for those unable to attend the live call, accessible through May 22, 2025[14] About Clearfield, Inc. Clearfield, Inc. designs, manufactures, and distributes fiber optic products for various communication network markets - Clearfield designs, manufactures, and distributes fiber optic products for communications networks[15] - The company's key markets include incumbent and competitive local exchange carriers, MSO/cable TV companies, utilities, enterprises, and data centers[15] Forward-Looking Statements This section cautions on forward-looking statements, outlining key risks including supply chain, customer concentration, competition, and macroeconomic conditions - The document contains forward-looking statements regarding future performance, market trends, and the impact of trade policies, which are subject to risks and uncertainties[16] - Key risk factors include reliance on single-source suppliers, customer concentration, intense competition, potential impact of government programs (BEAD, RDOF), and global economic conditions[16]