Clearfield(CLFD) - 2025 Q4 - Annual Report

Fiber Management Solutions - The company focuses on fiber management, fiber protection, and fiber delivery solutions, enabling rapid and cost-effective fiber-fed deployment primarily across North America[17]. - The company's products allow customers to connect twice as many homes in their Fiber to the Home (FTTH) builds, significantly reducing labor and material costs[23]. - Clearfield's products enable customers to connect twice as many homes in their Fiber to the Home (FTTH) builds using fewer resources[23]. - The Company focuses on innovative product design to accelerate fiber-based deployment, addressing the increasing demand for fiber services[18]. - Clearfield's FieldShield platform aims to reduce broadband deployment costs, utilizing ruggedized microducts for various installation methods[35]. Sales and Market Presence - The company’s products are sold across various markets, including National Carriers, Community Broadband, and International markets, with a focus on the U.S., Canada, and Central/Latin America[38]. - Sales outside the United States are primarily to customers in Canada and countries in the Caribbean, Central/South America, and Mexico[54]. - The Company focuses on the U.S. market for its Fiber to the Premise (FTTP) and Fiber to the Business (FTTB) solutions, with additional efforts in Canada and Central/Latin America[41][42]. - For the fiscal year ended September 30, 2025, Customer A and Customer B accounted for approximately 18% and 13% of net sales, respectively[52]. Manufacturing and Operations - The company’s manufacturing facilities in Brooklyn Park, Minnesota, and Tijuana, Mexico, support both quick-turn and scheduled delivery of products[24]. - Clearfield's manufacturing operations are supported by a network of domestic and global manufacturing partners, with final assembly completed in Brooklyn Park, Minnesota, and Tijuana, Mexico[24]. - The Company has invested in significant management resources to attract and retain qualified technical personnel through rigorous training programs[59]. - Clearfield's supply chain management team integrates sourcing, manufacturing, and logistics to ensure timely product delivery[50]. - The Company has taken steps to improve supply chain operations and enhance resiliency over the past several years[51]. Financial and Operational Metrics - The Company's target for First Pass Yield (FPY) ranges from 92-99%, and the On-Time Delivery (OTD) target is a minimum of 95%[61]. - The Company targets a First Pass Yield (FPY) of 92-99% and an On-Time Delivery (OTD) target of a minimum of 95%[61]. - Clearfield had approximately 243 full-time employees as of September 30, 2025, all based in the United States[57]. - The Company has approximately 243 full-time employees as of September 30, 2025, with a significant majority based in the U.S.[57]. Intellectual Property - As of September 30, 2025, the Company had 63 patents granted, with some beginning to expire in 2028[55]. - As of September 30, 2025, Clearfield had 63 patents granted and multiple patent applications pending, with patents beginning to expire in 2028[55]. Competitive Landscape - The market for fiber management products is highly competitive, with competitors including Corning, Nokia, and CommScope[45][46]. - The company believes its competitive advantage lies in cost savings provided by the Clearview Cassette and the ability to offer quick-turn, high-performance customized products[46]. Business Changes - The company completed the sale of its Nestor Cables business on November 11, 2025, resulting in its continuing operations comprising one operating segment[20]. - The Company completed the sale of its Nestor Cables business on November 11, 2025, resulting in one operating segment[20]. - The company operates under a Maquiladora arrangement in Mexico, allowing for duty-free import of certain items from the U.S. for processing[49]. - Clearfield's Mexico facility operates under a Maquiladora arrangement, allowing duty-free import of certain items from the U.S.[49]. Research and Development - The company’s research and development efforts are reflected in Selling, General, & Administrative expenses, indicating a commitment to innovation[29].