UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): January 23, 2020
CLEARFIELD, INC.
(Exact Name of Registrant as Specified in Charter)
| Minnesota | 0-16106 | 41-1347235 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 7050 Winnetka Avenue North, Suite 100, Brooklyn Park, Minnesota 55428 |
| (Address of Principal Executive Offices) (Zip Code) |
(763) 476-6866
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered |
| Common Stock, $0.01 par value | CLFD | The NASDAQ Stock Market LLC |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
| | [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Items under Sections 1, 3, 4, and 6 through 8 are not applicable and therefore omitted.
Item 2.02. Results of Operations and Financial Condition.
On January 23, 2020, Clearfield, Inc. (the “Company”) issued a press release announcing the results of its first quarter of fiscal 2020 ended December 31, 2019. A copy of that press release is furnished hereto as Exhibit 99.1 and is hereby incorporated by reference. Also furnished hereto as Exhibit 99.2 is the slide presentation that is part of the Company’s “FieldReport” to be used by Cheryl Beranek, the Company’s President and Chief Executive Officer, and Daniel Herzog, the Company’s Chief Financial Officer, during the live webcast and telephone conference relating to the first quarter ended December 31, 2019 results.
Item 9.01. Financial Statements and Exhibits.
The following exhibits are being furnished herewith:
99.1 Press release of Clearfield, Inc. dated January 23, 2020
99.2 Presentation of Clearfield, Inc. for January 23, 2020 Live Webcast and Telephone Conference
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | CLEARFIELD, INC. |
| | | |
| | | |
| Date: January 23, 2020 | By: | /s/ Cheryl Beranek |
| | | Cheryl Beranek |
| | | Chief Executive Officer |
| | | |
EXHIBIT 99.1
Clearfield Reports Fiscal First Quarter 2020 Results
National Carrier Revenue up 33% Year-over-Year, Driven by Continued Strong Adoption of FieldShield Pushable Fiber and FieldSmart Fiber Management Solutions
MINNEAPOLIS, Jan. 23, 2020 (GLOBE NEWSWIRE) -- Clearfield, Inc. (NASDAQ: CLFD), the specialist in fiber management for communication service providers, reported results for the fiscal first quarter of 2020 ended December 31, 2019.
| Fiscal Q1 2020 Financial Summary (GAAP) |
| (in millions except per share data and percentages) | Q1 2020 | vs. Q1 2019 | Change | Change (%) |
| Revenue | $ | 19.4 | | $ | 20.1 | | $ | (0.7) | | -4 | % |
| | | | | |
| Gross Profit ($) | $ | 7.7 | | $ | 7.9 | | $ | (0.2) | | -3 | % |
| Gross Profit (%) | | 39.9% | | | 39.6% | | | 0.3% | | 1 | % |
| | | | | |
| Income from Operations | $ | 0.4 | | $ | 1.2 | | $ | (0.8) | | -66 | % |
| Income Tax Expense | $ | 0.1 | | $ | 0.3 | | $ | (0.2) | | -58 | % |
| | | | | |
| Net Income | $ | 0.50 | | $ | 1.01 | | $ | (0.51) | | -50 | % |
| Net Income per Diluted Share | $ | 0.04 | | $ | 0.08 | | $ | (0.04) | | -50 | % |
Management Commentary
“Bookings for the first quarter of fiscal 2020 were consistent with our expectations for the period,” said Clearfield CEO, Cheri Beranek. “From a topline perspective, we saw strong contributions from our National Carrier and MSO markets, which were up 33% and 22% year-over-year, respectively. However, our overall revenue results in the first quarter were impacted by the timing of received orders, resulting in a $1.6 million increase in backlog over the prior quarter. We remain confident with respect to reaching our previously stated financial guidance for the fiscal year.”
“From an efficiency standpoint, we increased our gross profit margin to 39.9%, reflecting operating enhancements in multiple product categories. In fact, this quarter marked our best margin performance for any quarter out of the past seven.”
“We are encouraged by this margin expansion, yet recognize we must continually drive down costs as we expand our presence in broader markets. To address this need and to ensure the capacity required for the growth initiatives we are pursuing, we are in the process of signing a lease for a second manufacturing facility in Mexico. This 50,000 square foot facility, which is in the same industrial park as our current Mexico facility, will double our footprint. We aim to establish enhanced lean manufacturing initiatives by dedicating one facility to connectivity and the other to splicing operations associated with our enclosures.”
“As it relates to our ‘Coming of Age’ plan, we are continuing to execute within each of our three mandates and we are especially gaining increased visibility within our third initiative, which involves capitalizing on our 5G opportunities within the wireline markets of National Carriers and all wireless markets. As we look into fiscal Q2, we believe we are entering an early stage of realizing Tier 1 revenue, which is directly tied in with 5G deployment and the hand-off between the wireline and wireless network.”
“Based on increased traction with Tier 1 carriers, our robust order backlog and pipeline, we continue to believe fiscal 2020 will be a period of solid growth and profitability for Clearfield, especially in the second half of the year. Going forward, we are well positioned with industry-leading solutions, a strong competitive position, and a proven business model to capitalize on the disruptive growth opportunities within the fiber optics industry.”
Financial Results for the Quarter Ended December 31, 2019
Revenue for the first quarter of fiscal 2020 decreased 4% to $19.4 million from $20.1 million in the same year-ago quarter. The product mix during the period was relatively consistent with last year with the exception of the company’s Active Cabinet products which showed a revenue decline for the period.
Gross profit decreased 3% to $7.7 million, or 39.9% of revenue, from $7.9 million, or 39.6% of revenue, in the first quarter of fiscal 2019. The decrease in gross profit was due to decreased sales volume in the period. The increase in gross profit percent was due to cost reduction efforts across the product lines, including expanded use of the Company’s Mexico manufacturing plant, supply chain programs, and initiatives to reduce the impact of tariffs for products sourced from China.
Operating expenses were $7.3 million, an increase of 8% compared to $6.8 million in the same year-ago quarter. The increase in operating expenses was primarily due to an expansion of sales resources and the costs associated with product testing required for Tier 1 certification.
Income from operations in the first quarter of fiscal 2020 totaled $0.4 million compared to $1.2 million in the same year-ago quarter. This decrease in income from operations was attributable to higher selling, general and administrative expenses. Income tax expense decreased 58% from $296,000 in the first quarter of fiscal 2019 to $123,000 in the first quarter of fiscal 2020, primarily due to lower taxable income as well as a lower effective tax rate.
Net income in the first quarter of fiscal 2020 totaled $501,000, or $0.04 per diluted share, compared to $1.0 million, or $0.08 per diluted share, in the same year-ago quarter.
As of December 31, 2019, cash, cash equivalents and investments totaled $46.8 million compared to $47.5 million as of the end of the prior quarter. The Company had no debt as of quarter end.
Order backlog (defined as purchase orders received but not yet fulfilled) as of December 31, 2019 increased 37% to $5.8 million from $4.2 million as of September 30, 2019 and increased 31% from $4.4 million as of December 31, 2018. The increase in backlog was primarily from customers within the Company’s Community Broadband market.
Fiscal 2020 Financial Outlook
Clearfield reiterates its revenue guidance for fiscal 2020 to be between $92 million and $95 million. The Company also reiterates its gross profit as a percentage of total revenue to range between 37% and 38%, with some variability on a quarter-to-quarter basis. In addition, Clearfield reiterates its operating expense guidance to be between 31% and 33% of total revenue, and net income as a percentage of revenue to be between 3% and 5%.
Conference Call
Clearfield management will hold a conference call today, January 23, 2020 at 5:00 p.m. Eastern Standard Time (4:00 p.m. Central Standard Time) to discuss these results and provide an update on business conditions.
Clearfield’s President and CEO Cheri Beranek and CFO Dan Herzog will host the presentation, followed by a question and answer period.
Date: Thursday, January 23, 2020
Time: 5:00 p.m. Eastern time (4:00 p.m. Central time)
U.S. dial-in: 1-877-407-0792
International dial-in: 1-201-689-8263
Conference ID: 13698148
The conference call will be webcast live and available for replay here.
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 6, 2020.
U.S. replay dial-in: 1-844-512-2921
International replay dial-in: 1-412-317-6671
Replay ID: 13698148
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 Information
Forward-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 Company’s future revenue and operating performance, integration of the acquired active cabinet line, trends in and growth of the FTTx markets, market segments or customer purchases, effectiveness of the Company’s sales and marketing strategies and organization, utilization of manufacturing capacity, and the development and marketing of products. 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: 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, 2019 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 Colton
Gateway Investor Relations
949-574-3860
[email protected]
CLEARFIELD, INC.
STATEMENTS OF OPERATIONS
UNAUDITED
| | |
| | Three Months Ended |
| | December 31, |
| | 2019 | | 2018 |
| | | | | | |
| Net sales | $ | 19,377,991 | | $ | 20,089,150 |
| | | | | | |
| Cost of sales | | 11,650,456 | | | 12,142,452 |
| | | | | | |
| Gross profit | | 7,727,535 | | | 7,946,698 |
| | | | | | |
| Operating expenses | | | | | |
| Selling, general and | | | | | |
| administrative | | 7,326,620 | | | 6,775,875 |
| Income from operations | | 400,915 | | | 1,170,823 |
| | | | | | |
| Interest income | | 223,243 | | | 135,137 |
| Income before income taxes | | 624,158 | | | 1,305,960 |
| | | | | | |
| Income tax expense | | 123,000 | | | 296,000 |
| | | | | | |
| Net income | $ | 501,158 | | $ | 1,009,960 |
| | | | | | |
| Net income per share: | | | | | |
| Basic | $ | 0.04 | | $ | 0.08 |
| Diluted | $ | 0.04 | | $ | 0.08 |
| | | | | | |
| Weighted average shares outstanding: | | | | | |
| Basic | | 13,512,094 | | | 13,400,383 |
| Diluted | | 13,622,226 | | | 13,400,383 |
| | | | | | |
CLEARFIELD, INC.
BALANCE SHEETS
| | | | | | |
| | | (Unaudited) | | | |
| | | December 31, | | | September 30, |
| | | 2019 | | | 2019 |
| Assets | | | | | |
| Current Assets | | | | | |
| Cash and cash equivalents | $ | 10,586,850 | | $ | 10,081,721 |
| Short-term investments | | 14,523,321 | | | 13,524,270 |
| Accounts receivable, net | | 7,025,727 | | | 9,118,639 |
| Inventories, net | | 10,630,441 | | | 9,012,980 |
| Other current assets | | 825,065 | | | 769,161 |
| Total current assets | | 43,591,404 | | | 42,506,771 |
| | | | | | |
| Property, plant and equipment, net | | 5,682,166 | | | 5,413,241 |
| | | | | | |
| Other Assets | | | | | |
| Long-term investments | | 21,704,000 | | | 23,902,000 |
| Goodwill | | 4,708,511 | | | 4,708,511 |
| Intangible assets, net | | 5,059,707 | | | 5,147,135 |
| Right of use lease asset | | 2,215,103 | | | - |
| Other | | 202,539 | | | 210,905 |
| Total other assets | | 33,889,860 | | | 33,968,551 |
| Total Assets | $ | 83,163,430 | | $ | 81,888,563 |
| | | | | | |
| Liabilities and Shareholders’ Equity | | | | | |
| Current Liabilities | | | | | |
| Current portion of lease liability | $ | 516,167 | | $ | - |
| Accounts payable | | 2,316,100 | | | 3,173,599 |
| Accrued compensation | | 2,120,735 | | | 3,224,860 |
| Accrued expenses | | 327,154 | | | 208,603 |
| Total current liabilities | | 5,280,156 | | | 6,607,062 |
| | | | | | |
| Other Liabilities | | | | | |
| Long term portion of lease liability | | 1,940,024 | | | - |
| Deferred taxes | | 101,690 | | | 101,690 |
| Deferred rent | | - | | | 246,424 |
| Total other liabilities | | 2,041,714 | | | 348,114 |
| Total Liabilities | | 7,321,870 | | | 6,955,176 |
| | | | | | |
| Shareholders’ Equity | | | | | |
| Common stock | | 136,575 | | | 136,418 |
| Additional paid-in capital | | 57,383,020 | | | 56,976,162 |
| Retained earnings | | 18,321,965 | | | 17,820,807 |
| Total Shareholders’ Equity | | 75,841,560 | | | 74,933,387 |
| Total Liabilities and Shareholders’ Equity | $ | 83,163,430 | | $ | 81,888,563 |
| | | | | | |
CLEARFIELD, INC.
STATEMENT OF CASH FLOWS
UNAUDITED
| |
| | Three Months Ended | | Three Months Ended |
| | December 31, | | December 31, |
| | 2019 | | 2018 |
| Cash flows from operating activities | | | | | |
| Net income | $ | 501,158 | | | $ | 1,009,960 | |
| Adjustments to reconcile net income to cash provided | | | | | |
| by operating activities: | | | | | |
| Depreciation and amortization | | 606,972 | | | | 529,414 | |
| Amortization of discount on investments | | (28,051 | ) | | | - | |
| Stock-based compensation expense | | 240,586 | | | | 538,524 | |
| Changes in operating assets and liabilities | | | | | |
| Accounts receivable, net | | 2,092,912 | | | | 4,653,817 | |
| Inventories, net | | (1,617,461 | ) | | | 424,019 | |
| Other assets | | (47,538 | ) | | | 102,481 | |
| Accounts payable, accrued expenses and | | | | | |
| deferred rent | | (1,848,409 | ) | | | (432,340 | ) |
| Net cash (used in) provided by operating activities | | (99,831 | ) | | | 6,825,875 | |
| | | | | | |
| Cash flows from investing activities: | | | | | |
| Purchases of property, plant and equipment and | | | | | |
| intangible assets | | (788,469 | ) | | | (276,599 | ) |
| Purchase of investments | | (3,211,000 | ) | | | (1,558,000 | ) |
| Proceeds from maturities of investments | | 4,438,000 | | | | 1,680,000 | |
| Net cash provided by (used in) investing activities | | 438,531 | | | | (154,599 | ) |
| | | | | | |
| Cash flows from financing activities | | | | | |
| Proceeds from issuance of common stock under | | 169,652 | | | | 145,940 | |
| employee stock purchase plan | | | | | |
| Proceeds from issuance of common stock | | 2,580 | | | | 17 | |
| upon exercise of stock options | | | | | |
| Tax withholding related to vesting of restricted stock | | | | | |
| grants and exercise of stock options | | (5,803 | ) | | | (6,676 | ) |
| Net cash provided by (used in) financing activities | | 166,429 | | | | 139,281 | |
| Increase in cash and cash equivalents | | 505,129 | | | | 6,810,557 | |
| Cash and cash equivalents, beginning of period | | 10,081,721 | | | | 8,547,777 | |
| Cash and cash equivalents, end of period | $ | 10,586,850 | | | $ | 15,358,334 | |
| | | | | | |
| Supplemental disclosures for cash flow information | | | | | |
| Cash paid during the year for income taxes | $ | (29,907 | ) | | $ | (1,043 | ) |
| | | | | | |
| Non-cash financing activities | | | | | |
| Cashless exercise of stock options | $ | - | | | $ | 9,658 | |
| | | | | | |
Exhibit 99.2
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD The Industry Leader in Craft Friendly Fiber Optic Management and Connectivity Solutions Fiscal Q1 2020 Earnings Call FieldReport
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Important Cautions Regarding Forward - Looking Statements Forward - 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,” “est ima te,” “outlook,” or “continue” or comparable terminology are intended to identify forward - looking statements. Such forward looking statements includ e, for example, statements about the Company’s future revenue and operating performance, integration of the acquired active cabinet line, tre nds in and growth of the FTTx markets, market segments or customer purchases, effectiveness of the Company’s sales and marketing strategies and organizatio n, utilization of manufacturing capacity, and the development and marketing of products. These statements are based upon the Company's curre nt 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: to compete effectively, we must continually improve existing products and introdu ce new products that achieve market acceptance; our expected growth is based upon the expansion of the telecommunications market; our operating re sul ts may fluctuate significantly from quarter to quarter, which may make budgeting for expenses difficult and may negatively affect the market p ric e of our common stock; our success depends upon adequate protection of our patent and intellectual property rights; intense competition in ou r i ndustry may result in price reductions, lower gross profits and loss of market share; we rely on single - source suppliers, which could cause delays, in creases in costs or prevent us from completing customer orders, all of which could materially harm our business; a significant percentage of our sales in th e 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 the se major customers would adversely affect us; further consolidation among our customers may result in the loss of some customers and may reduce sal es during the pendency of business combinations and related integration activities; we may be subject to risks associated with acquisitions th at could adversely affect future operating results; product defects or the failure of our products to meet specifications could cause us to lose cu stomers 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 o per ations could be adversely affected by economic conditions and the effects of these conditions on our customers’ businesses; changes in govern men t funding programs may cause our customers and prospective customers to delay or reduce purchases; and other factors set forth in Part I, Item I A. Risk Factors of Clearfield's Annual Report on Form 10 - K for the year ended September 30, 2019 as well as other filings with the Securities and E xchange Commission. The Company undertakes no obligation to update these statements to reflect actual events unless required by law. © Copyright 2020 Clearfield, Inc. All Rights Reserved. NASDAQ:CLFD 2
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Welcome Cheri Beranek PRESIDENT & CEO NASDAQ:CLFD 3
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD FQ1 2020 Highlights NASDAQ:CLFD 4 • Revenue of $19.4M • 33% growth in National Carrier revenue, driven by strong market adoption of FieldShield and other fiber connectivity solutions • 22% growth in MSO revenue • Order backlog increased $1.6M (37% sequentially) to $5.8M • Solid gross profit margin of 39.9%, the highest level in seven quarters • Reiterating financial guidance for fiscal 2020 $20.1M $19.1M $21.9M $24.0M $19.4M Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Quarterly Revenue $80.9M $ 84.3M Q1-19 Q1-20 TTM Quarterly Revenue
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Revenue Comparison by Market NASDAQ:CLFD 5 1) Based on revenue of $84.3 million and Point of Sales (POS) reporting from distributors who resell our product line into these markets. TTM Revenue Composition Ended 12/31/2019 1 Community Broadband (Tier 2 & 3, utilities, municipalities, and alternative carriers) National Carrier (Tier 1 Wireline and all Wireless Markets) MSO (Cable TV) International (Canada, Mexico, and Caribbean Markets) Build - to - Print (Legacy contract manufacturing and misc. sales) 62% 15% 10% 7% 6% $53.6 $9.6 $7.9 $5.6 $4.2 $52.1 $12.7 $8.8 $6.1 $4.6 Community Broadband National Carrier MSO International Build-to-Print FQ1 19 FQ1 20 Quarterly Revenue TTM Revenue $13.0 $2.3 $1.9 $1.6 $1.3 $11.6 $3.1 $2.3 $1.2 $1.2 Community Broadband National Carrier MSO International Build-to-Print FQ1 19 FQ1 20
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Financial Update Dan Herzog CHIEF FINANCIAL OFFICER NASDAQ:CLFD 6
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Quarterly Financial Performance 7 NASDAQ:CLFD Note: Dollar figures in millions $20.1 $19.1 $21.9 $24.0 $19.4 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Revenue +19% +13% +2% +7% - 4% Year - over - Year Growth Rate
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Quarterly Financial Performance 8 NASDAQ:CLFD 39.6% 36.8% 38.4% 38.8% 39.9% Gross Profit (%) Note: Dollar figures in millions $20.1 $19.1 $21.9 $24.0 $19.4 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Revenue +19% +13% +2% +7% - 4% Year - over - Year Growth Rate $7.9 $7.0 $8.4 $9.3 $7.7 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Gross Profit
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Quarterly Financial Performance 9 NASDAQ:CLFD 33.7% 35.3% 31.4% 29.7% 37.8% OPEX as % of Revenue Note: Dollar figures in millions ** $20.1 $19.1 $21.9 $24.0 $19.4 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Revenue +19% +13% +2% +7% - 4% Year - over - Year Growth Rate 39.6% 36.8% 38.4% 38.8% 39.9% Gross Profit (%) $6.8 $6.7 $6.9 $7.1 $7.3 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Operating Expenses $7.9 $7.0 $8.4 $9.3 $7.7 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Gross Profit
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Quarterly Financial Performance 10 NASDAQ:CLFD Note: Dollar figures in millions ** $1.0 $0.4 $1.3 $1.8 $0.5 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Net Income 5.0% 1.9% 5.9% 7.9% 2.1% Net Margin $6.8 $6.7 $6.9 $7.1 $7.3 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Operating Expenses $20.1 $19.1 $21.9 $24.0 $19.4 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Revenue +19% +13% +2% +7% - 4% Year - over - Year Growth Rate 33.7% 35.3% 31.4% 29.7% 37.8% OPEX as % of Revenue $7.9 $7.0 $8.4 $9.3 $7.7 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Gross Profit 39.6% 36.8% 38.4% 38.8% 39.9% Gross Profit (%)
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Strong Balance Sheet Supports Profitable Growth • $46.8 million in cash and cash investment balances • Zero Debt NASDAQ:CLFD 11 $ in Millions Cash and Investment Balances $34.3 $44.2 $44.3 $35.5 $47.5 $46.8 2015 2016 2017 2018 2019 2020
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Clearfield’s ‘Coming of Age’ Plan NASDAQ:CLFD 12 Expanding Core Community Broadband Business Attracting utilities, co - ops and CLECs as they enter underserved communities, maintaining a steady growth rate
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Clearfield’s ‘Coming of Age’ Plan NASDAQ:CLFD 13 Expanding Core Community Broadband Business Attracting utilities, co - ops and CLECs as they enter underserved communities, maintaining a steady growth rate Enhancing Competitive Position and Operational Effectiveness Investing in products, manufacturing and supply chain to increase competitiveness and maintain and reduce costs
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Clearfield’s ‘Coming of Age’ Plan NASDAQ:CLFD 14 Expanding Core Community Broadband Business Attracting utilities, co - ops and CLECs as they enter underserved communities, maintaining a steady growth rate Enhancing Competitive Position and Operational Effectiveness Investing in products, manufacturing and supply chain to increase competitiveness and maintain and reduce costs Capitalizing on Disruptive Growth Opportunities Within National Wireline and Wireless Markets Leveraging customer relationships and application knowledge to capture opportunities related to 5G, NG - PON, and edge computing initiatives
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Fiscal 2020 Outlook & Guidance NASDAQ:CLFD 15 $92M - $95M REVENUE $60.3 $75.3 $73.9 $77.7 $85.0 $92 - $95 2015 2016 2017 2018 2019 2020F Revenue Growth Outlook ($ in Millions) 37% - 38% GROSS MARGINS 31% - 33% OPERATING EXPENSES as % of revenue 3% - 5% NET INCOME as a % of revenue
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Q&A Cheri Beranek PRESIDENT & CEO NASDAQ:CLFD 16 Dan Herzog CHIEF FINANCIAL OFFICER
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD 17 NASDAQ:CLFD
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Thank You Cheri Beranek PRESIDENT & CEO NASDAQ:CLFD 18
FieldReport / Fiscal Q1 2020 Earnings Call / January 23, 2020 NASDAQ:CLFD Contact Us NASDAQ:CLFD 19 COMPANY CONTACT: Cheri Beranek President & CEO Clearfield, Inc. [email protected] INVESTOR RELATIONS: Matt Glover and Tom Colton Gateway Investor Relations (949) 574 - 3860 [email protected]