Clearfield(CLFD) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 2024 were $48.79 million, a 20$61.28 million in Q3 2023[97] - Net sales for the nine months ended June 30, 2024 were $119.93 million, a 45$219.04 million in the same period of 2023[105] - Gross profit margin for Q3 2024 was 21.9%, down from 31.1% in Q3 2023[100] - Gross profit margin for the nine months ended June 30, 2024 was 15.2%, down from 33.5% in the same period of 2023[107] - Net loss for Q3 2024 was $447,000, compared to net income of$5.22 million in Q3 2023[104] - Loss from operations for the nine months ended June 30, 2024 was $20.21 million, compared to income of$35.57 million in the same period of 2023[108] - The company recorded a net loss of $11,626,000 for the nine months ended June 30, 2024, compared to a net income of$29,837,000 in the same period of 2023[110] Segment Performance - Net sales from the Clearfield segment decreased by 30% to $33,670,000 for the three months ended June 30, 2024, and by 52$89,371,000 for the nine months ended June 30, 2024[114] - Net income (loss) in the Clearfield segment decreased by 109% to $(196,000) for the three months ended June 30, 2024, and by 129$(8,464,000) for the nine months ended June 30, 2024[115] - Net sales in the Nestor Cables segment increased by 13% to $15,123,000 for the three months ended June 30, 2024, but decreased by 6$30,562,000 for the nine months ended June 30, 2024[116] - Net loss in the Nestor Cables segment increased by 55% to $(252,000) for the three months ended June 30, 2024, and by 549$(3,162,000) for the nine months ended June 30, 2024[117] International Sales and Currency Impact - International sales accounted for 34% of total net sales in Q3 2024, up from 23% in Q3 2023[97] - If the Euro had appreciated or depreciated by 10% relative to the U.S. Dollar, the company's operating expenses would have increased or decreased by approximately $164,000 and$544,000 for the three and nine months ended June 30, 2024, respectively[131] Order Backlog and Capital - Order backlog as of June 30, 2024 was $32.58 million, a 56$107.29 million in June 2023[99] - The company completed a capital raise of $130.26 million in Q1 2023[108] Cash Flow and Investments - The company's cash, cash equivalents, and short-term investments totaled$123,819,000 as of June 30, 2024, compared to $168,113,000 as of September 30, 2023[118] - Net cash provided by operating activities totaled$8,464,000 for the nine months ended June 30, 2024, compared to $13,481,000 in the same period of 2023[120][121] - The company used$33,374,000 to repurchase common stock under its stock repurchase program for the nine months ended June 30, 2024[124] - Net investment income for the nine months ended June 30, 2024 was $5.65 million, up from$3.33 million in the same period of 2023[108] Cost and Profitability Challenges - Rising costs including wages, logistics, components, and commodity prices are negatively impacting the company's profitability[132] - The company does not hedge commodity prices, which may have a material impact on its financial statements[132] Internal Controls and Legal Matters - The company's disclosure controls and procedures were effective as of June 30, 2024[133] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2024[134] - No pending legal proceedings are likely to have a material adverse effect on the company's financial position or results of operations[135] Interest Expense - Interest expense decreased to $381,000 for the nine months ended June 30, 2024, from$551,000 in the same period of 2023, due to the repayment of the company's line of credit[109]