Clearfield(US:CLFD)2025-11-25 14:32Financial Data and Key Metrics Changes - Fourth quarter net sales from continuing operations were $41.1 million, up 13% year-over-year from $36.2 million [4][12] - For the full year, net sales from continuing operations grew 20% to $150.1 million, compared to $125.6 million in fiscal year 2024 [4][13] - Gross margin improved from 26.6% to 34.6% in the fourth quarter, driven by better manufacturing efficiencies [12] - Net income per share from continuing operations was $0.13 in the fourth quarter, compared to a loss of $0.01 per share in the same period last year [12] Business Line Data and Key Metrics Changes - The divestiture of the Nestor segment allows the company to focus on core North American operations and higher return opportunities [5][10] - Community broadband was flat year-over-year in the fourth quarter, indicating a soft performance impacted by the government shutdown and delays in the BEAD program [21][22] Market Data and Key Metrics Changes - The company reported that 18 of the 52 submitted proposals for the BEAD program were approved, indicating a positive outlook for fiber deployment [9] - The company anticipates that the government shutdown and delays in BEAD will pressure investments in the community broadband market early in the year [15][22] Company Strategy and Development Direction - The company is focused on its "Better Broadband and Beyond" strategy, which includes protecting its core community broadband business and expanding into new applications [6][10] - New product launches, including a complete line of splice cases and a next-generation fiber management cassette, are expected to enhance market reach and customer engagement [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to normal operations by the second quarter of fiscal 2026 following the government shutdown [20] - The company expects net sales from continuing operations in fiscal 2026 to be in the range of $160-$170 million, driven by steady demand for fiber connectivity [14][15] Other Important Information - The company ended the quarter with approximately $166 million in cash and investments, reflecting a strong balance sheet [14] - The board of directors increased the share buyback authorization from $65 million to $85 million, providing additional funds for repurchases [14] Q&A Session Summary Question: Impact of government shutdown on revenue and bookings - Management noted that the government shutdown affected bookings across various programs, particularly ACAM, leading to a soft outlook for the first quarter [18][21] Question: Timeline for normalization post-shutdown - Management expects operations to normalize by the second quarter, with no long-term impact on the total year [20] Question: Outlook for gross margins - Management indicated that gross margins are expected to improve modestly with higher revenues, although the first quarter may be lighter [23] Question: Concerns about fiber supply - Management acknowledged ongoing concerns regarding fiber supply due to high demand from data centers, affecting allocations from suppliers like Corning [24] Question: Nestor's revenue in the previous quarter - Nestor's revenue for the fourth quarter was reported at $9.4 million, with Clearfield's revenue at $41.1 million [29] Question: Community broadband outlook - Management indicated that community broadband is under pressure due to BEAD delays and government shutdowns, but large regional customers are performing well [30] Question: Revenue expectations from new products - Management does not expect significant revenue from new product introductions in the near term, projecting more substantial contributions in 2027 [34] Question: Addressable market for BEAD - Management confirmed that 4-5% of BEAD deployment costs are addressable by the company, with a potential market opportunity of around $500 million [44][45]