Clearfield(US:CLFD)2025-05-09 16:31Financial Performance - Net sales for the three months ended March 31, 2025, were $47,168,000, an increase of approximately 28%, or $10,258,000, from $36,910,000 for the same period in 2024[106]. - For the six months ended March 31, 2025, net sales were $82,644,000, an increase of 16%, or $11,504,000, from $71,140,000 for the same period in 2024[117]. - Net sales to Broadband Service Providers increased to $44,384,000, up from $34,363,000, while international sales decreased to $7,323,000 from $9,947,000, representing 16% of total net sales in Q2 2025 compared to 27% in Q2 2024[106][117]. - Net sales in the Clearfield segment increased 47%, or $13,021,000, for the three months ended March 31, 2025, compared to the same period in 2024[128]. - Net sales in the Nestor Cables segment decreased 30%, or $2,763,000, for the three months ended March 31, 2025, compared to the same period in 2024[130]. Profitability - Gross profit for the three months ended March 31, 2025, was $14,191,000, a 401% increase from $2,832,000 in the same period in 2024, with a gross profit margin of 30.1% compared to 7.7%[110]. - Gross profit for the six months ended March 31, 2025, was $22,374,000, a 197% increase from $7,529,000 in the same period in 2024, with a gross profit margin of 27.1% compared to 10.6%[119]. - Net income for the three months ended March 31, 2025, was $1,327,000, or $0.09 per share, compared to a net loss of $5,911,000, or $0.40 per share, for the same period in 2024[116]. - Net income in the Clearfield segment for the three months ended March 31, 2025, increased 151%, or $7,524,000, from a net loss compared to the same period in 2024[129]. - Loss from operations for the six months ended March 31, 2025, was $3,713,000, a decrease of approximately 79% compared to a loss of $17,903,000 for the same period in 2024[121]. Expenses - Selling, general and administrative expenses increased by 11% to $13,929,000 for the three months ended March 31, 2025, compared to $12,573,000 for the same period in 2024[111]. - Selling, general and administrative expenses for the six months ended March 31, 2025, increased by 3% to $26,087,000 from $25,432,000 for the same period in 2024[120]. Cash Flow and Investments - Net cash provided by operating activities totaled $10,198,000 for the six months ended March 31, 2025, compared to $5,094,000 for the same period in 2024[134][135]. - As of March 31, 2025, cash, cash equivalents, and short-term investments totaled $111,990,000, down from $130,992,000 as of September 30, 2024[132]. - The Company intends to utilize available cash primarily for continued organic growth, potential future strategic transactions, and a share repurchase program[133]. - The Company repurchased $11,015,000 of its common stock on the open market during the six months ended March 31, 2025[138]. Tax and Financial Ratios - The effective tax rate for the six months ended March 31, 2025, was (5.3%) compared to 21.3% for the same period in 2024, primarily due to decreased loss from operations[123]. - Days sales outstanding decreased by 8 days to 47 days as of March 31, 2025, compared to 55 days from March 31, 2024[134]. Market and Operational Risks - The company reported that inflationary pressures, including rising costs of wages, logistics, and components, are negatively impacting profitability[148]. - If the Euro had appreciated or depreciated by 10% relative to the U.S. Dollar, operating expenses would have increased or decreased by approximately $163,000 and $308,000, respectively, for the three and six months ended March 31, 2025[147]. - The company does not hedge against foreign currency fluctuations, which could materially impact financial statements[147]. - Market risks from adverse changes in interest rates, foreign currency exchange rates, and commodity prices could impact the company's financial condition[145]. - Rising commodity prices have outpaced the company's ability to reduce costs or increase prices, affecting profitability[148]. - The company relies on single-source suppliers, which could lead to delays and increased costs[145]. - A significant percentage of sales in the last three fiscal years have been made to a small number of customers, posing a risk if these customers are lost[145]. - The company faces risks associated with acquisitions that could adversely affect future operating results[145]. - The company does not hedge commodity prices, making it vulnerable to inflation impacts on cost of sales and operating expenses[148].