Company Performance - Clearfield reported a quarterly loss of $0.13 per share, outperforming the Zacks Consensus Estimate of a loss of $0.31, and showing improvement from a loss of $0.35 per share a year ago, resulting in an earnings surprise of 58.06% [1] - The company posted revenues of $35.48 million for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.49%, but showing an increase from year-ago revenues of $34.23 million [2] - Clearfield has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Stock Outlook - Clearfield shares have increased approximately 19.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 3.1% [3] - The company's earnings outlook will be crucial for determining future stock movements, with current consensus EPS estimates at -$0.22 for the coming quarter and -$0.33 for the current fiscal year [4][7] - The current estimate revisions trend for Clearfield is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Wireless Equipment industry, to which Clearfield belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Net sales for Q1 2025 increased by 4% to $35.5 million compared to $34.2 million in Q1 2024[3]. - Gross profit rose to $8.2 million, a 74% increase from $4.7 million in the same quarter last year, resulting in a gross margin of 23.1%[3][7]. - Net loss narrowed to $1.9 million, or $(0.13) per diluted share, compared to a net loss of $5.3 million, or $(0.35) per diluted share, in Q1 2024[3][8]. - The company anticipates revenue growth in line with or above the industry forecast of 12.5% for fiscal 2025, maintaining annual revenue guidance of $170 million to $185 million[4][9]. - Expected net sales for Q2 2025 are projected to be between $37 million and $40 million, with a net loss per share range of $(0.16) to $(0.21)[9]. Operational Metrics - Order backlog as of December 31, 2024, was $26.0 million, reflecting a 3.6% increase from $25.1 million as of September 30, 2024, but a 40.1% decrease from $43.4 million a year ago[5]. - Operating expenses decreased by 5.5% to $12.2 million, representing 34.3% of net sales, down from 37.6% in the prior year[7]. - The company reported strong quoting activity and the initiation of new multi-year projects beyond connected homes and government-funded initiatives[4]. Cash Flow and Assets - Net cash provided by operating activities was $7,150 thousand, down from $10,800 thousand year-over-year[24]. - Cash and cash equivalents at the end of the year increased to $30,453 thousand from $34,484 thousand, reflecting a decrease of approximately 11.8%[24]. - Total current liabilities decreased from $24,352 million to $18,728 million, a reduction of about 23.2%[22]. - Long-term investments increased significantly from $24,505 million to $41,916 million, representing a growth of approximately 71.5%[22]. - Net cash provided by investing activities rose to $13,392 thousand compared to $908 thousand in the previous year[24]. Shareholder Equity and Stock Activity - Total assets decreased from $315,275 million to $303,230 million, a decline of approximately 3.3%[22]. - The total shareholders' equity decreased from $275,763 million to $267,435 million, a decline of about 3.0%[22]. - Share buy-backs totaled $6.2 million, with $18.7 million remaining available for future repurchases[6][8]. - The company engaged in a cashless exercise of stock options amounting to $9 thousand, indicating ongoing employee stock option activity[24]. Depreciation and Expenses - The company reported a depreciation and amortization expense of $1,838 thousand, up from $1,651 thousand year-over-year[24]. - Net loss for the three months ended December 31, 2024, was $1,906 thousand, an improvement from a net loss of $5,268 thousand in the same period of 2023[23]. Manufacturing and Cost Management - Clearfield's manufacturing sites are designed for redundancy and cost optimization, with a focus on mitigating potential tariff impacts on operations[11][12].

Core Viewpoint - Clearfield, Inc. reported a strong performance in fiscal Q1 2025, with increased revenues and improved gross margins, driven by demand for connected home products and effective cost management strategies [3][4][6]. Financial Performance - Net sales for Q1 2025 were $35.5 million, a 4% increase from $34.2 million in Q1 2024 [2][4]. - Gross profit rose to $8.2 million, up 74% from $4.7 million in the same quarter last year, resulting in a gross margin of 23.1%, compared to 13.7% in Q1 2024 [2][5]. - The company reported a net loss of $1.9 million, or $(0.13) per diluted share, significantly improved from a net loss of $5.3 million, or $(0.35) per diluted share, in Q1 2024 [2][8]. Operational Highlights - Order backlog as of December 31, 2024, was $26.0 million, reflecting a 3.6% increase from $25.1 million as of September 30, 2024, but a 40.1% decrease from $43.4 million a year earlier [4]. - Operating expenses decreased by 5.5% to $12.2 million, representing 34.3% of net sales, down from 37.6% in the prior year [7]. Management Insights - The company expressed optimism about strong quoting activity and new multi-year projects, indicating a robust demand environment [3]. - Management anticipates revenue growth for the Clearfield segment to align with or exceed the industry forecast of 12.5% for fiscal 2025 [3]. Future Outlook - Clearfield maintains its annual revenue guidance for fiscal 2025 between $170 million and $185 million, with expected net sales for Q2 2025 projected to be between $37 million and $40 million [9]. - The company is closely monitoring the evolving tariff situation, which may impact future operations, but believes its manufacturing strategy provides some mitigation against potential cost increases [10][11][12].

Earnings Announcement - Clearfield Inc will release its Q1 fiscal 2025 results on February 6 2025 after market close [1] - The company will host a conference call at 5:00 PM Eastern time to discuss financial results [1] - Financial results and a shareholder letter will be available on the Investor Relations section of the company's website [2] Conference Call Details - Conference call dial-in numbers: US 1-877-407-0792 International 1-201-689-8263 [2] - The call will be webcast live and available for replay [2] - Audio replay available after 8:00 PM Eastern time on February 6 through February 20 2025 [2] - Replay dial-in numbers: US 1-844-512-2921 International 1-412-317-6671 Replay ID 13751115 [3] Company Overview - Clearfield Inc designs manufactures and distributes fiber optic management protection and delivery products [3] - The company serves traditional carriers alternative carriers MSO/cable TV companies utility/municipality enterprise data center and military markets [3] - Clearfield deploys over 1 million fiber ports annually and is headquartered in Minneapolis MN [3]

Financial Performance - Net sales for fiscal year 2024 decreased by 38% to $166.7 million from $268.7 million in fiscal year 2023, primarily due to decreased demand in the Clearfield segment's core markets[159][160] - Gross profit for fiscal year 2024 decreased by 66% to $28.9 million, with gross profit margin dropping to 17.3% from 31.7% in fiscal year 2023, impacted by lower sales and unabsorbed overhead[162][163] - The company reported a net loss of $12.5 million for fiscal year 2024, compared to a net income of $32.5 million in fiscal year 2023[169] - Clearfield segment net sales decreased by 44% ($100.154 million) for fiscal year 2024 compared to 2023, driven by reduced sales to Community Broadband, MSO/Cable TV, and Large Regional customers[185] - Clearfield segment net loss increased by 128% ($41.348 million) for fiscal year 2024, primarily due to lower gross profit margins and inventory reserves[186] - Nestor Cables segment net sales decreased by 4% ($1.861 million) for fiscal year 2024, excluding sales to the Clearfield segment[188] - Nestor Cables segment net loss increased by 112% ($3.638 million) for fiscal year 2024, driven by lower gross profit margins and higher operating expenses[188] Market and Sales Trends - Sales to the Community Broadband market decreased by 41% to $66.0 million in fiscal year 2024, while sales to the MSO/Cable TV market decreased by 49% to $23.5 million[160] - International sales represented 27% of net sales in fiscal year 2024, up from 19% in fiscal year 2023, reflecting the company's growing presence in global markets[159] - The acquisition of Nestor Cables in July 2022 contributed to a 226% increase in international sales to $49.9 million in fiscal year 2023[171] - Company's sales backlog decreased to $25.133 million as of September 30, 2024, from $57.285 million in 2023, due to reduced demand for fiber connectivity products[189] Expenses and Costs - Selling, general, and administrative expenses increased by 9% to $52.1 million in fiscal year 2024, driven by higher performance-based and stock-based compensation[164] - Rising costs including wages, logistics, components, and commodity prices are negatively impacting the company's profitability[234] - The company is subject to market risk from fluctuating market prices of certain purchased commodities and raw materials[234] - Inflation impacts the company's profitability, including cost of sales and operating expenses[234] - Inflation may have a material impact on the company's financial statements[234] Investments and Cash Flow - Net investment income increased to $7.5 million in fiscal year 2024, up from $5.2 million in fiscal year 2023, due to higher average investment balances and interest rates[166] - Company's combined cash, cash equivalents, and investments totaled $155.497 million as of September 30, 2024, compared to $174.456 million in 2023[190] - Net cash provided by operations for fiscal year 2024 totaled $22.223 million, including a net loss of $12.453 million and a decrease in inventory of $31.990 million[196] - Company received $162.064 million from maturities of investments and used $159.393 million to purchase new investments in fiscal year 2024[200] - Net cash used for financing activities during fiscal year 2024 was $36.907 million, primarily due to $33.058 million spent on stock repurchases[203] - Net cash provided by financing activities in fiscal year 2023 was $115,002,000, primarily from $130,262,000 in net proceeds from common stock issuance and $1,587,000 from borrowings on factored accounts receivables[204] - In fiscal year 2022, the company borrowed $16,700,000 to fund the acquisition of Nestor Cables, resulting in net cash provided by financing activities of $9,397,000[205] Stock Repurchase and Compensation - Company repurchased 1,164,190 shares for approximately $33.058 million during fiscal year 2024, leaving $24.923 million available in the $65 million stock repurchase program[195] - Stock-based compensation is measured using the Black-Scholes option pricing model, with fair value determined based on the company's stock price and assumptions about variables like expected stock price volatility and employee exercise behavior[209] Operational and Financial Policies - The company operates in two reportable segments: Clearfield and Nestor Cables, following the acquisition of Nestor Cables in July 2022[182] - The company has non-cancelable operating leases for office equipment in Minnesota, Mexico, Finland, and Estonia, expiring through August 2034, with certain leases having escalating rent provisions[206] - As of September 30, 2024, the company had a Finnish net operating loss (NOL) of $1,851,000 and a state NOL of $64,000, with no U.S. federal or Estonia NOL carry-forwards[214] - The company reviews long-lived assets for impairment if events indicate the carrying amount may not be recoverable, with no impairment charges recorded for the years ended September 30, 2024, 2023, and 2022[218][223] - Inventory is valued at the lower of cost or net realizable value, with regular reviews to identify and write down excess, slow-moving, or obsolete inventory[225] - The company adopted the FASB's CECL model for recognizing credit losses on financial instruments, effective October 1, 2023, with no material impact on consolidated financial statements[227] - The company plans to adopt new FASB standards on segment reporting (ASU 2023-07) and income tax disclosures (ASU 2023-09) for the fiscal year ending September 30, 2025[228][229] Future Outlook - The company expects gross profit margins to remain at or below current levels for several quarters until revenue levels increase[163]

Earnings Performance - Clearfield reported a quarterly loss of $0 06 per share, beating the Zacks Consensus Estimate of a loss of $0 19, representing an earnings surprise of 68 42% [1] - The company's revenue for the quarter ended September 2024 was $46 77 million, surpassing the Zacks Consensus Estimate by 11 63% [2] - Over the last four quarters, Clearfield has surpassed consensus EPS estimates four times and revenue estimates four times [2] Stock Performance and Market Comparison - Clearfield shares have gained approximately 24 7% since the beginning of the year, slightly outperforming the S&P 500's gain of 24 3% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Earnings Outlook and Estimate Revisions - The current consensus EPS estimate for the coming quarter is -$0 26 on $37 25 million in revenues, and -$0 03 on $189 1 million in revenues for the current fiscal year [7] - The estimate revisions trend for Clearfield is mixed, translating into a Zacks Rank 3 (Hold), indicating the shares are expected to perform in line with the market [6] Industry Context - Clearfield belongs to the Zacks Wireless Equipment industry, which is currently in the bottom 37% of the 250 plus Zacks industries [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] Peer Comparison - Okta, another company in the Zacks Computer and Technology sector, is expected to report quarterly earnings of $0 57 per share, representing a year-over-year change of +29 6% [9] - Okta's revenues are expected to be $649 4 million, up 11 2% from the year-ago quarter [10]

Financial Data and Key Metrics - Consolidated net sales in Q4 2024 were $46.8 million, a 6% decrease from $49.7 million in the same period last year, but above the guidance range of $40 million to $43 million [16] - North American net sales accounted for $35.7 million, while international net sales were $11.1 million in Q4 2024 [16] - Full-year consolidated net sales for fiscal 2024 were $166.7 million, a 38% decrease from $268.7 million in fiscal 2023 [18] - The company generated positive cash flow from operations of approximately $12.9 million in Q4 2024 and $22.2 million for the full fiscal year [17][18] - Revenue from homes connected continues to grow and represents a larger portion of overall revenue compared to previous periods [18] Business Line Data and Key Metrics - The company has transitioned into an end-to-end portfolio supplier of products for both passing and connecting homes, positioning it for growth consistent with the general industry outlook [19] - New products introduced in the past year include SeeChange, CraftSmart FiberFirst Pedestal, CraftSmart Deploy Reel TAP Box, and the FiberFlex series of active cabinets, aimed at reducing deployment costs and time [11] - The company is finalizing the design of a new distributed TAP portfolio to be introduced in the coming months [12] Market Data and Key Metrics - The MSO and large regional service provider markets drove stronger-than-expected results in Q4 2024, with inventory levels decreasing in certain product categories [17] - The Community Broadband segment and large regional providers have mostly recovered and returned to a normal ordering cadence, while MSO accounts still face inventory overhang [14] - The company anticipates significant BEAD-driven demand in 2026, particularly in rural markets where it is strongest [15][21] Company Strategy and Industry Competition - The company is focused on supporting rural broadband expansion through scalable solutions that reduce deployment costs and skilled labor requirements [10] - Public and private funding for rural broadband expansion presents significant opportunities for growth [9] - The company expects U.S. revenue growth to align with or exceed industry-focused forecasts, with minimal revenue growth from international markets as it focuses on gross profit improvements [20] Management Commentary on Operating Environment and Future Outlook - The company expects a slow start to fiscal 2025, with Q1 net sales projected in the range of $33 million to $38 million and a net loss per share of $0.28 to $0.35 [22] - The shift to the second phase of the E-ACAM program, focusing on deployment, is expected to serve as a growth catalyst for the latter part of 2025 [15] - Service providers remain bullish on fiber utilization in their build plans, but there is some conservatism in capital spending [21] Other Important Information - The company has introduced a 3D interactive fiber installation tool via the BILT mobile app to simplify the deployment process [11] - Anis Khemakhem has joined the company as Chief Marketing Officer, bringing over 25 years of industry experience [13] - Kevin Morgan will continue to work with the company in an advisory capacity and represent it at industry events [13] Q&A Session Summary - No specific questions or answers were provided in the transcript [22][23]

Revenue Performance - Q4 2024 revenue was $46.8 million, a decrease of 5.9% compared to $49.7 million in Q4 2023[7] - Full-year 2024 revenue was $166.7 million, a decrease of 38% compared to $268.7 million in 2023[3] - Net sales for the year ended September 30, 2024 were $166.7 million, down 38.0% from $268.7 million in 2023[21] - Revenue guidance for fiscal year 2025 is $170 million to $185 million[6] - Q1 2025 revenue is expected to be in the range of $33 million to $38 million, with a net loss per share of $0.28 to $0.35[10] Profitability and Loss - Q4 2024 net loss per share was $(0.06), compared to net income of $0.17 per share in Q4 2023[2] - Net loss for the year was $12.5 million in 2024, compared to a net income of $32.5 million in 2023[21] - Gross margin for Q4 2024 was 22.8%, down from 24.1% in Q4 2023 but improved from 21.9% in the previous quarter[8] - Gross profit for the year decreased by 66.1% to $28.9 million in 2024 from $85.3 million in 2023[21] Cash Flow and Financial Position - Positive cash flow from operations for the full year was approximately $22.2 million[6] - Operating cash flow increased by 20.6% to $22.2 million in 2024 from $18.4 million in 2023[22] - Cash and cash equivalents dropped significantly from $37.8 million in 2023 to $16.2 million in 2024, a 57.2% decrease[19] - The company repurchased $33.4 million worth of common stock in 2024[22] Operating Expenses and Costs - Operating expenses for Q4 2024 increased 33.1% to $13.7 million, primarily due to higher variable compensation and professional fees[9] Assets and Investments - Total assets decreased from $355.5 million in 2023 to $315.3 million in 2024, a decline of 11.3%[19] - Long-term investments increased significantly from $6.3 million in 2023 to $24.5 million in 2024, a 286.3% rise[19] - Inventory levels decreased by 31.9% from $98.1 million in 2023 to $66.8 million in 2024[19] - Accounts receivable decreased by 24.9% from $28.4 million in 2023 to $21.3 million in 2024[19] Backlog and Market Opportunities - Order backlog as of September 30, 2024, was $25.1 million, a decrease of 56.1% compared to $57.3 million in September 2023[7] - The company achieved BABA self-certification recognition from the NTIA, positioning it for opportunities in the BEAD Program[1]

Board of Directors Update - Clearfield Inc announced the election of Kate Kelly and Ademir Sarcevic to its Board of Directors, effective December 11, 2024 [1] - Kate Kelly will serve on the Company's Audit Committee and Nominating and Corporate Governance Committee [3] - Ademir Sarcevic will serve on the Company's Audit Committee and Compensation Committee [5] Kate Kelly's Background - Kate Kelly brings over three decades of experience in the banking industry, with leadership roles at U S Bank and PNC [2] - As Regional President and Executive Vice President at PNC, she achieved 24% average annual revenue growth [2] - She was the founding President and CEO of Minnesota Bank & Trust, driving 30% annual revenue growth [2] - She led Bremer Financial's Wealth Management division, achieving consistent 15% annual growth [2] - Holds an MBA in finance from the University of Minnesota Carlson School of Management and a Bachelor of Arts in Economics and Humanities from St Catherine University [2] Ademir Sarcevic's Background - Ademir Sarcevic has over two decades of experience in financial transformation and business growth across various industries [4] - Currently serves as Vice President, Chief Financial Officer, and Treasurer at Standex International, where he more than doubled market capitalization and stock price while achieving record operating margins and cash flow [4] - Previously held leadership roles at Pentair, playing a key role in spin-out and M&A activities, and at Eisai Inc, managing financial restructuring efforts [4] - Holds a Master of International Management from Thunderbird School of Global Management and a Bachelor of Science in Finance and International Business from the University of Bridgeport [4] Company Overview - Clearfield Inc designs, manufactures, and distributes fiber optic management, protection, and delivery products for communications networks [5] - The company's "fiber to anywhere" platform serves traditional carriers, alternative carriers, MSO/cable TV companies, and markets including utility/municipality, enterprise, data center, and military [5] - Headquartered in Minneapolis, MN, Clearfield deploys more than a million fiber ports each year [5]

Earnings Announcement - Clearfield Inc will release its Q4 2024 financial results on November 7 2024 after market close [1] - The company will host a conference call at 5:00 PM Eastern Time on November 7 to discuss results [1] - Financial results and earnings presentation will be available on the Investor Relations section of the company website [1] - The conference call will be webcast live and available for replay until November 21 2024 [1] Company Overview - Clearfield Inc designs manufactures and distributes fiber optic management protection and delivery products for communications networks [2] - The company serves traditional carriers alternative carriers MSO/cable TV companies as well as utility/municipality enterprise data center and military markets [2] - Clearfield deploys over 1 million fiber ports annually [2] - The company is headquartered in Minneapolis MN [2]