Clearfield, Inc. (NASDAQ: CLFD),
the specialist in fiber management for communication service
providers, reported results for the fiscal first quarter ended
December 31, 2020.
Fiscal Q1 2021
Financial Summary |
|
(in millions
except per share data and percentages) |
Q1 2021 |
vs. Q1 2020 |
Change |
Change (%) |
Net Sales |
$ |
27.1 |
|
$ |
19.4 |
|
$ |
7.7 |
|
40 |
% |
|
|
|
|
|
Gross Profit ($) |
$ |
11.4 |
|
$ |
7.7 |
|
$ |
3.6 |
|
47 |
% |
Gross Profit (%) |
|
42.0 |
% |
|
39.9 |
% |
|
2.1 |
% |
5 |
% |
|
|
|
|
|
Income from Operations |
$ |
3.7 |
|
$ |
0.4 |
|
$ |
3.3 |
|
826 |
% |
Income Tax Expense |
$ |
0.7 |
|
$ |
0.1 |
|
$ |
0.6 |
|
456 |
% |
|
|
|
|
|
Net
Income |
$ |
3.2 |
|
$ |
0.5 |
|
$ |
2.7 |
|
531 |
% |
Net
Income per Diluted Share |
$ |
0.23 |
|
$ |
0.04 |
|
$ |
0.19 |
|
475 |
% |
|
|
|
|
|
Management Commentary“The first quarter of
fiscal 2021 was an exceptionally strong start to our new fiscal
year,” said Company President and CEO Cheri Beranek. “The $27.1
million we generated in revenue was a 40% increase over last year
and marked the highest revenue level for any fiscal first quarter
in Clearfield history. Our growth in the period was again led by
double-digit increases from our Community Broadband and
Multiple-System Operator (MSO or Cable TV) markets, which were up
71% and 30%, respectively. Our extended and ongoing strong topline
performance over the last several quarters also enabled us to
exceed the $100 million revenue level on a trailing 12-month (TTM)
basis for the first time. Additionally, we generated solid gross
profit dollars, which totaled $11.4 million or 42.0% of total
revenue, marking the highest gross profit margin we have achieved
as a company in more than two years.
“The surging demand and need for high-speed internet access,
accelerated by COVID-19, is prevalent across the country,
especially in the Community Broadband market in which Clearfield
commands a strong market leadership. Our track record and
reputation in the Community Broadband market has positioned us
extremely well to take share and further capitalize on the
expansion that is currently underway as our base of independent
telephone providers is joined by utilities and municipalities in
delivering high-speed broadband to consumers and businesses. We
believe demand will accelerate in 2021 as construction is initiated
for the awards recently granted under the Rural Digital Opportunity
Fund (RDOF), which will fund up to $20.4 billion of gigabit speed
broadband over the next 10 years. Further, we are encouraged by the
meaningful strides we made this quarter in advancing our product
portfolio. This included achieving Telcordia Certification for our
Aerial Strand-mount FDH as well as receiving approval by a Tier 1
carrier for the use of this product in its network. Due to the
COVID crisis gripping our country and market, the launch of our new
technologies into the Tier 1 market faces headwinds associated with
product introduction and training. As 5G deployments into the
access network increase, we are optimistic for increasing revenue
among Tier 1 markets moving forward.
“Our strategic plan has been a multi-year initiative to prepare
Clearfield for an accelerated rate of demand and growth. We are
ready to ‘Come of Age,’ which is the next phase of our multi-year
growth plan to further strengthen our core business and position
our Company for disruptive growth opportunities. This next
phase is defined by three major pillars: building a better
broadband - one community at a time, delivering innovation for true
‘one-fiber’ deployment, and scaling operational excellence for a
superior customer experience. While the underlying objectives are
unchanged, the three pillars upholding our ‘Comes of Age’ Plan have
evolved to better align with where Clearfield is today as a
Company, our end markets and customer needs, and the near- and
long-term trends we are seeing in the industry. As we embark on
this next phase, an integral part of our continued success and
realization of our mission will be our employees’ unwavering
commitment to providing best-in-class products and unmatched
customer support.
“Looking ahead, due to the ongoing volatility from COVID-19 we
are currently in a position to provide only limited financial
guidance. We are, however, confident the demand for fiber-fed
broadband will continue throughout fiscal 2021 and beyond. Nearer
term, we anticipate second quarter to be consistent with the
traditional seasonality of revenue being slightly down on a
sequential basis. Longer term, our enhanced ‘Comes of Age’ Plan,
which targets growth in fiber-fed broadband and 5G access fiber
positions us for continued success for Clearfield in the years
ahead.”
First Quarter of Fiscal 2021 Financial
ResultsRevenues for the first quarter of fiscal 2021
increased 40% to $27.1 million from $19.4 million in the same
year-ago quarter. The increase in revenues was primarily due to
higher sales in the Company’s Community Broadband and MSO markets,
partially offset by decreases in our legacy and national carrier
revenue markets.
Gross profit for the first quarter of fiscal 2021 increased 47%
to $11.4 million, or 42.0% of revenue, from $7.7 million, or 39.9%
of revenue, in the same year-ago quarter. The increase in gross
profit dollars was due to higher sales volume. The increase in
gross profit percent was due to a favorable product mix associated
with the increased revenue in Community Broadband markets and cost
reduction efforts across the Company’s product lines, including
increased production at its Mexico manufacturing plants, and
efficiencies realized from supply chain programs.
Operating expenses for the first quarter of fiscal 2021 totaled
$7.7 million, which compares to $7.3 million in the same year-ago
quarter. The increase in operating expenses consisted primarily of
higher compensation costs related to performance compensation
accruals.
Income from operations for the first quarter of fiscal 2021
increased 826% to $3.7 million from $0.4 million in the same
year-ago quarter.
Income tax expense for the first quarter of fiscal 2021
increased 456% to $684,000 from $123,000 in the same year-ago
quarter due to higher taxable income. Net income for the first
quarter of fiscal 2021 totaled $3.2 million, or $0.23 per diluted
share, an improvement from $0.5 million, or $0.04 per diluted
share, in the same year-ago quarter.
Conference CallClearfield management will hold
a conference call today, January 28, 2021 at 5:00 p.m. Eastern Time
(4:00 p.m. Central Time) to discuss these results and provide an
update on business conditions.
Clearfield President and CEO Cheri Beranek and CFO Dan Herzog
will host the presentation, followed by a question-and-answer
period.
U.S. dial-in: 1-877-407-0792International dial-in:
1-201-689-8263Conference ID: 13715280
The conference call will be webcast live and available for
replay here:
http://public.viavid.com/index.php?id=143097
Please call the conference telephone number 10 minutes prior to
the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at
1-949-574-3860.
A replay of the call will be available after 8:00 p.m. Eastern
time on the same day through February 11, 2021.
U.S. replay dial-in: 1-844-512-2921International replay dial-in:
1-412-317-6671Replay ID: 13715280
About Clearfield, Inc. Clearfield, Inc.
(NASDAQ: CLFD) designs, manufactures, and distributes fiber optic
management, protection and delivery products for communications
networks. Our “fiber to anywhere” platform serves the unique
requirements of leading incumbent local exchange carriers
(traditional carriers), competitive local exchange carriers
(alternative carriers), and MSO/cable TV companies, while also
catering to the broadband needs of the utility/municipality,
enterprise, data center and military markets. Headquartered in
Minneapolis, MN, Clearfield deploys more than a million fiber ports
each year. For more information, visit www.SeeClearfield.com.
Cautionary Statement Regarding Forward-Looking
InformationForward-looking statements contained herein and
in any related presentation or in the related FieldReport are made
pursuant to the safe harbor provisions of the Private Litigation
Reform Act of 1995. Words such as “may,” “will,” “expect,”
“believe,” “anticipate,” “estimate,” “outlook,” or “continue” or
comparable terminology are intended to identify forward-looking
statements. Such forward looking statements include, for example,
statements about the expected impact of COVID-19 and related
economic uncertainty, the Company’s future revenue and operating
performance, the impact of the CARES Act or other government
programs on the demand for the Company’s products or timing of
customer orders, and trends in and growth of the FTTx markets,
market segments or customer purchases and other statements that are
not historical facts. These statements are based upon the Company's
current expectations and judgments about future developments in the
Company's business. Certain important factors could have a material
impact on the Company's performance, including, without limitation:
the as yet-unknown impact of COVID-19 and related economic
uncertainty; to compete effectively, we must continually improve
existing products and introduce new products that achieve market
acceptance; our expected growth is based upon the expansion of the
telecommunications market; our operating results may fluctuate
significantly from quarter to quarter, which may make budgeting for
expenses difficult and may negatively affect the market price of
our common stock; our success depends upon adequate protection of
our patent and intellectual property rights; intense competition in
our industry may result in price reductions, lower gross profits
and loss of market share; we rely on single-source suppliers, which
could cause delays, increases in costs or prevent us from
completing customer orders, all of which could materially harm our
business; a significant percentage of our sales in the last three
fiscal years have been made to a small number of customers, and the
loss of these major customers or significant decline in business
with these major customers would adversely affect us; further
consolidation among our customers may result in the loss of some
customers and may reduce sales during the pendency of business
combinations and related integration activities; we may be subject
to risks associated with acquisitions that could adversely affect
future operating results; product defects or the failure of our
products to meet specifications could cause us to lose customers
and sales or to incur unexpected expenses; we are dependent upon
key personnel; we face risks associated with expanding our sales
outside of the United States; our business is dependent on
effective management information systems and information technology
infrastructure; our results of operations could be adversely
affected by economic conditions and the effects of these conditions
on our customers’ businesses; changes in government funding
programs may cause our customers and prospective customers to delay
or reduce purchases; and other factors set forth in Part I, Item
IA. Risk Factors of Clearfield's Annual Report on Form 10-K for the
year ended September 30, 2020 as well as other filings with the
Securities and Exchange Commission. The Company undertakes no
obligation to update these statements to reflect actual events
unless required by law.
Investor Relations Contact:Matt Glover
and Tom ColtonGateway Investor
Relations1-949-574-3860CLFD@gatewayir.com
CLEARFIELD, INC.STATEMENTS OF
EARNINGS(Unaudited)
|
|
|
|
|
|
|
Three Months
Ended |
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Net
sales |
$ |
27,092,147 |
|
$ |
19,377,991 |
|
|
|
|
|
|
Cost of
sales |
|
15,722,902 |
|
|
11,650,456 |
|
|
|
|
|
|
Gross
profit |
|
11,369,245 |
|
|
7,727,535 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
Selling, general and |
|
|
|
|
|
administrative |
|
7,655,537 |
|
|
7,326,620 |
Income from
operations |
|
3,713,708 |
|
|
400,915 |
|
|
|
|
|
|
Interest income |
|
133,731 |
|
|
223,243 |
Income
before income taxes |
|
3,847,439 |
|
|
624,158 |
|
|
|
|
|
|
Income tax
expense |
|
684,000 |
|
|
123,000 |
|
|
|
|
|
|
Net
income |
$ |
3,163,439 |
|
$ |
501,158 |
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
Basic |
$ |
0.23 |
|
$ |
0.04 |
Diluted |
$ |
0.23 |
|
$ |
0.04 |
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
Basic |
|
13,692,533 |
|
|
13,512,094 |
Diluted |
|
13,696,815 |
|
|
13,622,226 |
|
|
|
|
|
|
CLEARFIELD, INC.BALANCE
SHEETS
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
December
31, |
|
|
September
30, |
|
|
2020 |
|
|
2020 |
Assets |
|
|
|
|
|
Current
Assets |
|
|
|
|
|
Cash and
cash equivalents |
$ |
19,151,076 |
|
$ |
16,449,636 |
Short-term
investments |
|
9,125,527 |
|
|
10,582,527 |
Accounts
receivable, net |
|
9,797,641 |
|
|
10,496,672 |
Inventories,
net |
|
13,687,589 |
|
|
14,408,538 |
Other
current assets |
|
449,596 |
|
|
585,436 |
Total
current assets |
|
52,211,429 |
|
|
52,522,809 |
|
|
|
|
|
|
Property,
plant and equipment, net |
|
5,002,750 |
|
|
5,109,988 |
|
|
|
|
|
|
Other
Assets |
|
|
|
|
|
Long-term
investments |
|
26,142,000 |
|
|
25,143,000 |
Goodwill |
|
4,708,511 |
|
|
4,708,511 |
Intangible
assets, net |
|
4,747,450 |
|
|
4,829,047 |
Right of use
lease assets |
|
2,930,911 |
|
|
2,539,100 |
Deferred tax
asset |
|
178,118 |
|
|
178,118 |
Other |
|
266,515 |
|
|
266,857 |
Total other
assets |
|
38,973,505 |
|
|
37,664,633 |
Total
Assets |
$ |
96,187,684 |
|
$ |
95,297,430 |
|
|
|
|
|
|
Liabilities
and Shareholders Equity |
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
Current
portion of lease liability |
$ |
874,476 |
|
$ |
665,584 |
Accounts
payable |
|
1,866,249 |
|
|
3,689,587 |
Accrued
compensation |
|
3,118,895 |
|
|
4,856,885 |
Accrued
expenses |
|
1,909,236 |
|
|
1,202,753 |
Total
current liabilities |
|
7,768,856 |
|
|
10,414,809 |
|
|
|
|
|
|
Other
Liabilities |
|
|
|
|
|
Long-term
portion of lease liability |
|
2,307,390 |
|
|
2,129,343 |
Total other
liabilities |
|
2,307,390 |
|
|
2,129,343 |
Total
Liabilities |
|
10,076,246 |
|
|
12,544,152 |
|
|
|
|
|
|
Shareholders
Equity |
|
|
|
|
|
Common
stock |
|
137,279 |
|
|
136,500 |
Additional
paid-in capital |
|
57,696,847 |
|
|
57,502,905 |
Retained
earnings |
|
28,277,312 |
|
|
25,113,873 |
Total
Shareholders Equity |
|
86,111,438 |
|
|
82,753,278 |
Total
Liabilities and Shareholders Equity |
$ |
96,187,684 |
|
$ |
95,297,430 |
|
|
|
|
|
|
CLEARFIELD, INC.STATEMENTS OF CASH
FLOWS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Three Months
Ended |
|
|
|
|
December 31, |
|
|
December 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
Cash flows
from operating activities |
|
|
|
|
|
|
|
Net
income |
|
|
$ |
3,163,439 |
|
|
$ |
501,158 |
|
Adjustments to reconcile net income to cash provided |
|
|
|
|
|
|
|
by (used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
567,718 |
|
|
|
606,972 |
|
Amortization of discount on investments |
|
|
|
- |
|
|
|
(28,051 |
) |
Stock-based compensation expense |
|
|
|
289,057 |
|
|
|
240,586 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
699,031 |
|
|
|
2,092,912 |
|
Inventories, net |
|
|
|
720,949 |
|
|
|
(1,617,461 |
) |
Other assets |
|
|
|
136,182 |
|
|
|
(47,538 |
) |
Accounts payable and accrued expenses |
|
|
|
(2,859,717 |
) |
|
|
(1,848,409 |
) |
Net cash
provided by (used in) operating activities |
|
|
|
2,716,659 |
|
|
|
(99,831 |
) |
|
|
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
|
Purchases of property, plant and equipment and |
|
|
|
|
|
|
|
intangible assets |
|
|
|
(378,883 |
) |
|
|
(788,469 |
) |
Purchase of investments |
|
|
|
(3,968,000 |
) |
|
|
(3,211,000 |
) |
Proceeds from maturities of investments |
|
|
|
4,426,000 |
|
|
|
4,438,000 |
|
Net cash
provided by investing activities |
|
|
|
79,117 |
|
|
|
438,531 |
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities |
|
|
|
|
|
|
|
Proceeds from issuance of common stock under |
|
|
|
179,081 |
|
|
|
169,652 |
|
employee stock purchase plan |
|
|
|
|
|
|
|
Tax withholding related to exercise of stock options |
|
|
|
(262,470 |
) |
|
|
2,580 |
|
Tax withholding related to vesting of restricted stock |
|
|
|
|
|
|
|
grants and exercise of stock options |
|
|
|
(10,947 |
) |
|
|
(5,803 |
) |
Net cash
(used in) provided by financing activities |
|
|
|
(94,336 |
) |
|
|
166,429 |
|
Increase in
cash and cash equivalents |
|
|
|
2,701,440 |
|
|
|
505,129 |
|
Cash and
cash equivalents, beginning of period |
|
|
|
16,449,636 |
|
|
|
10,081,721 |
|
Cash and
cash equivalents, end of period |
|
|
$ |
19,151,076 |
|
|
$ |
10,586,850 |
|
|
|
|
|
|
|
|
|
Supplemental
disclosures for cash flow information |
|
|
|
|
|
|
|
Cash paid
during the year for income taxes |
|
|
$ |
17,000 |
|
|
$ |
29,907 |
|
|
|
|
|
|
|
|
|
Non-cash
financing activities |
|
|
|
|
|
|
|
Cashless
exercise of stock options |
|
|
$ |
996,182 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
Clearfield (NASDAQ:CLFD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Clearfield (NASDAQ:CLFD)
Historical Stock Chart
From Apr 2023 to Apr 2024