Clearfield(US:CLFD)2022-11-22 16:00Sales Performance - The company's net sales for fiscal year 2022 increased by 92%, or $130,128,000, reaching $270,883,000 compared to $140,755,000 in fiscal year 2021[197] - Sales to the Community Broadband market increased by 84%, or $82,651,000, from $97,978,000 in fiscal year 2021 to $180,629,000 in fiscal year 2022[198] - Sales to the MSO/Cable TV market surged by 164%, or $30,379,000, from $18,490,000 in fiscal year 2021 to $48,868,000 in fiscal year 2022[198] - Sales to National Carriers rose by 96%, or $11,499,000, from $11,956,000 in fiscal year 2021 to $23,456,000 in fiscal year 2022[198] - Net sales in the Clearfield segment increased by 87%, or $123,067,000, to $263,822,000 for the fiscal year ended September 30, 2022[224] Profitability - Gross profit for fiscal year 2022 increased by 85%, or $51,770,000, from $61,177,000 in fiscal year 2021 to $112,947,000[200] - Gross profit margin decreased to 41.7% in fiscal year 2022 from 43.5% in fiscal year 2021, primarily due to increased component costs and inflationary pressures[201] - Net income for fiscal year 2022 was $49,362,000, or $3.58 per basic share, compared to $20,327,000, or $1.48 per basic share in fiscal year 2021[208] - Net income in the Clearfield segment for fiscal year 2022 increased by 145%, or $29,444,000, driven by increased sales[225] Expenses - Cost of sales for fiscal year 2022 was $157,936,000, an increase of 98%, or $78,358,000, from $79,578,000 in fiscal year 2021[200] - Selling, general and administrative expenses for fiscal year 2022 increased by $13,187,000, or 37%, to $49,130,000 compared to $35,943,000 in fiscal year 2021[202] - The income tax expense for fiscal year 2022 was $14,472,000, an increase from $5,407,000 in fiscal year 2021, reflecting higher taxable income[207] - Interest expense for fiscal year 2022 was $311,000, attributed to $16,700,000 borrowed on the line of credit and debt held with Nestor Cables[206] Cash Flow and Investments - The company generated net cash from operations of $1,001,000 for the fiscal year ended September 30, 2022, compared to $10,903,000 in 2021 and $6,656,000 in 2020[231][232][235] - The company used $16,187,000 in cash to acquire Nestor Cables on July 26, 2022, contributing to cash used in investing activities of $8,197,000 for the fiscal year[236] - The company borrowed $16,700,000 on its line of credit to fund the acquisition of Nestor Cables, resulting in net cash provided by financing activities of $10,655,000 in 2022[239] - As of September 30, 2022, the company had combined cash and investments of $45,199,000, down from $60,503,000 as of September 30, 2021[229] Inventory and Sales Management - The company increased its inventory by $43,744,000 in 2022 to support higher sales backlog and demand, compared to $13,116,000 in 2021 and $5,396,000 in 2020[231][232][235] - The company's days sales outstanding (DSO) increased from 39 to 52 days from September 30, 2021 to September 30, 2022, indicating longer payment terms with certain customers[231] Strategic Initiatives - The acquisition of Nestor Cables on July 26, 2022, contributed to a 62% increase in sales to international customers, rising from $9,470,000 in fiscal year 2021 to $15,276,000 in fiscal year 2022[198] - The company plans to continue investing in information technology and manufacturing equipment, including expansion of its facility in Mexico[236] Market Risks - The company's ability to predict future orders is limited due to potential supply chain disruptions and changes in customer ordering patterns influenced by COVID-19[199] - Rising costs from inflation are negatively impacting profitability, with increased expenses in wages, logistics, and components[247] - The company does not hedge against foreign currency fluctuations, which could materially impact financial results due to the Euro's relationship with the U.S. dollar[246]