Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Clearfield Inc (CLFD, Financial) exited fiscal 2024 with stronger customer relationships and launched several new products that reduce deployment time.
- Revenue from homes connected continues to grow, indicating positive customer response to Clearfield Inc (CLFD)'s active cabinet solutions.
- The company is excited about opportunities from public and private funding for rural broadband expansion, which aligns with their long-term commitment to rural communities.
- Clearfield Inc (CLFD) introduced several new products aimed at reducing the cost and time of connecting homes, including innovative tools and solutions.
- The company generated positive cash flow from operations of approximately $12.9 million in the fourth quarter, driven by a reduction in net inventory.
Negative Points
- Consolidated net sales in the fourth quarter of fiscal 2024 decreased by 6% compared to the same period last year.
- For the full fiscal year, consolidated net sales decreased by 38% from fiscal 2023.
- Clearfield Inc (CLFD) anticipates a slow start to fiscal 2025, with first-quarter net sales expected to be between $33 million to $38 million.
- The company expects to generate a net loss per share in the range of $0.28 to $0.35 in the first quarter of fiscal 2025.
- There is some level of conservatism on capital spending by service providers, impacting the company's growth outlook.
Q & A Highlights
Q: Can you provide more details on the financial performance for the fourth quarter and the full year 2024?
A: Daniel Herzog, CFO, stated that consolidated net sales for the fourth quarter were $46.8 million, a 6% decrease from the previous year but above the guidance range. For the full fiscal year, net sales were $166.7 million, a 38% decrease from 2023. The company generated positive cash flow from operations of $12.9 million in the fourth quarter and $22.2 million for the full year.
Q: What are the expectations for fiscal year 2025 in terms of revenue and growth?
A: Daniel Herzog, CFO, mentioned that Clearfield is guiding revenues of $170 million to $185 million for fiscal year 2025. They anticipate U.S. revenue growth to be in line with or above industry forecasts, with minimal growth from international markets. Growth is expected to accelerate with the impact of BEAD funding in 2026.
Q: How is Clearfield positioning itself for future growth, particularly in the rural broadband segment?
A: Cheryl Beranek, CEO, highlighted that Clearfield is focusing on scalable solutions that reduce deployment costs and skilled labor requirements. They introduced new products like SeeChange and the CraftSmart series to support rural broadband expansion and plan to continue product releases and investments in this segment.
Q: What impact do you expect from public and private funding on Clearfield's business?
A: Cheryl Beranek, CEO, expressed excitement about opportunities from public and private funding for rural broadband expansion. They believe this will serve as a growth catalyst in late 2025 and anticipate significant demand driven by BEAD funding in 2026.
Q: Can you elaborate on the inventory situation and its impact on ordering patterns?
A: Cheryl Beranek, CEO, noted that while inventory overhang is impacting ordering patterns, it is primarily at MSO accounts. The community broadband segment and large regional providers have mostly recovered, returning to normal ordering cadences.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
