Clearfield(CLFD) - 2021 Q4 - Annual Report

Financial Performance - Net sales for fiscal year 2021 increased 51%, or $47,681,000, to $140,755,000 from $93,075,000 in 2020[155] - Gross profit increased 61%, or $23,264,000, from $37,914,000 in fiscal year 2020 to $61,178,000 in fiscal year 2021, with a gross profit margin of 43.5%[159] - Income from operations for fiscal year 2021 was $25,234,000, up from $8,384,000 in fiscal year 2020[162] - Net income for fiscal year 2021 was $20,327,000, or $1.48 per basic share, compared to $7,293,000, or $0.53 per basic share for fiscal year 2020, representing an increase of 178%[165] Sales and Revenue Sources - Sales to broadband service providers accounted for 98% of net sales in fiscal year 2021, totaling $138,021,000, compared to $89,571,000, or 96%, in fiscal 2020[156] - International sales represented 7% of net sales in fiscal year 2021, up from 4% in fiscal year 2020[155] - The increase in net sales was primarily driven by a $38,920,000 increase in sales to Community Broadband and MSO customers[157] Expenses and Costs - Selling, general and administrative expenses for fiscal year 2021 were $35,944,000, an increase of 22% compared to $29,530,000 in fiscal year 2020[161] - Cost of sales for fiscal year 2021 was $79,578,000, an increase of 44% from $55,160,000 in fiscal year 2020[159] - Income tax expense for fiscal year 2021 was $5,407,000, an increase of $3,545,000 from $1,862,000 in fiscal year 2020, with the tax expense rate rising to 21.0% from 20.3%[164] Cash Flow and Investments - As of September 30, 2021, the company had combined cash and investments of $60,503,000, up from $52,175,000 as of September 30, 2020[166] - Net cash generated from operations for fiscal year 2021 totaled $10,903,000, compared to $6,656,000 for fiscal year 2020, reflecting a significant increase in operational efficiency[169][170] - The company invested $24,809,000 in FDIC-backed certificates of deposit and U.S. Treasuries during fiscal year 2021, resulting in cash used in investing activities of $13,600,000[171] - The net cash used in financing activities for fiscal year 2021 was $536,000, compared to $247,000 for fiscal year 2020, indicating increased financial activity related to employee stock options[174][175] Operational Challenges and Future Plans - The company experienced increased material and supply chain transportation costs due to COVID-19, which are expected to continue in fiscal year 2022[159] - The company plans to continue investing in information technology and manufacturing equipment, including expansion into a new 318,000 square foot leased facility[171] - The company intends to utilize available cash and assets for organic growth and potential strategic transactions, including a share repurchase program[167] Financial Health - The company had no long-term debt obligations as of September 30, 2021, maintaining a strong liquidity position[166] - Days sales outstanding increased from 38 to 39 days from September 30, 2020, to September 30, 2021, indicating a slight delay in receivables collection[169]