Clearfield, Inc. (CLFD) Bundle
Understanding Clearfield, Inc. (CLFD) Revenue Streams
Understanding Clearfield, Inc.’s Revenue Streams
Clearfield, Inc. reported net sales of $166.7 million for the fiscal year 2024, a decrease of 38% from $268.7 million in fiscal year 2023.
Breakdown of Primary Revenue Sources
The company's revenue streams are primarily derived from the sale of fiber connectivity products. The following table illustrates the net sales for the fourth quarter and the full fiscal year:
| Period | Net Sales (in millions) | Year-over-Year Change |
|---|---|---|
| Q4 2024 | $46.8 | -6% |
| Q4 2023 | $49.7 | N/A |
| FY 2024 | $166.7 | -38% |
| FY 2023 | $268.7 | N/A |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown a significant decline. The fiscal year 2024 experienced a 38% decrease in net sales compared to fiscal year 2023.
Contribution of Different Business Segments to Overall Revenue
Clearfield's revenue is influenced heavily by its sales to multiple market segments, particularly:
- Multiple System Operators (MSOs)
- Large Regional Service Providers
- Products for home connectivity
However, specific revenue contributions from these segments are not detailed in the current report.
Analysis of Significant Changes in Revenue Streams
In Q4 2024, net sales decreased by $2.9 million compared to Q4 2023, reflecting a 6% decline. The decrease in revenue is attributed to lower demand and challenges in the supply chain affecting product availability. Additionally, operating expenses rose by 33.1% in Q4 2024, impacting overall profitability.
The gross profit margin for the fourth quarter of fiscal 2024 was 22.8%, down from 24.1% in the same quarter of the previous year.
Looking ahead, the company has projected revenue guidance for fiscal year 2025 in the range of $170 million to $185 million, indicating an expected recovery in growth.
A Deep Dive into Clearfield, Inc. (CLFD) Profitability
A Deep Dive into Clearfield, Inc.'s Profitability
Gross Profit Margin: For the fiscal year 2024, the gross profit was $28.9 million, resulting in a gross profit margin of 17.3%, a decrease from 31.7% in 2023.
Operating Profit: The loss from operations for fiscal year 2024 was $(23.2) million, compared to an income of $37.3 million in 2023.
Net Profit Margin: The net loss for the fiscal year 2024 was $(12.5) million, translating to a net loss margin of (7.5%), a significant decline from a net income of $32.5 million and a margin of 12.1% in 2023.
Trends in Profitability Over Time
The following table outlines the key profitability metrics for Clearfield, Inc. over the last two fiscal years:
| Metric | Fiscal Year 2024 | Fiscal Year 2023 | Change |
|---|---|---|---|
| Net Sales | $166.7 million | $268.7 million | -38% |
| Gross Profit | $28.9 million | $85.3 million | -66% |
| Gross Profit Margin | 17.3% | 31.7% | -14.4% |
| Operating Income (Loss) | $(23.2) million | $37.3 million | -162% |
| Net Income (Loss) | $(12.5) million | $32.5 million | -138% | Net Income (Loss) per Share | $(0.85) | $2.17 | -139% |
Comparison of Profitability Ratios with Industry Averages
As of 2024, the industry average gross profit margin for similar companies is approximately 25%. Clearfield's gross profit margin of 17.3% indicates underperformance relative to its peers.
Operating margins in the telecommunications equipment industry average around 10%. Clearfield's operating margin of (13.9%) highlights significant operational challenges.
Analysis of Operational Efficiency
The following table summarizes the operational efficiency metrics for Clearfield, Inc. in fiscal year 2024:
| Metric | Value |
|---|---|
| Operating Expenses | $52.1 million |
| Operating Expenses as % of Net Sales | 31.2% |
| Cost of Sales | $137.8 million |
| Cost of Sales as % of Net Sales | 82.5% |
| Inventory Levels | $66.8 million |
| Cash Flow from Operations | $22.2 million |
In conclusion, the company has seen a decline in profitability metrics over the fiscal year 2024, with significant drops in gross profit margin, operating income, and net income compared to the previous year. The operational efficiency indicators suggest that cost management remains a critical area for improvement as the company navigates a challenging market environment.
Debt vs. Equity: How Clearfield, Inc. (CLFD) Finances Its Growth
Debt vs. Equity: How Clearfield, Inc. Finances Its Growth
Long-term Debt: As of September 30, 2024, the company reported $2.228 million in long-term debt.
Short-term Debt: The current portion of lease liability amounted to $3.357 million, while the current maturities of long-term debt were $0.
Total Liabilities: The total liabilities stood at $39.512 million at the end of fiscal year 2024.
Debt-to-Equity Ratio: The debt-to-equity ratio can be calculated as follows:
| Metric | Value |
|---|---|
| Total Liabilities | $39.512 million |
| Total Shareholders' Equity | $275.763 million |
| Debt-to-Equity Ratio | 0.143 |
This ratio is significantly lower than the industry average, indicating a conservative approach to leveraging.
Recent Debt Issuances: In the fiscal year 2024, the company issued $2.171 million in long-term debt and also repaid $2.171 million during the same period.
Credit Ratings: The company has maintained a stable credit profile, with no specific ratings disclosed in the latest reports.
Refinancing Activity: There has been no indication of major refinancing activities in the recent fiscal year.
Balance Between Debt Financing and Equity Funding: The company has focused primarily on equity funding, with $159.582 million in additional paid-in capital reported as of September 30, 2024. The total shareholders' equity decreased from $315.163 million in the previous year to $275.763 million in 2024.
The strategy reflects a balanced approach to financing growth while minimizing reliance on debt.
Assessing Clearfield, Inc. (CLFD) Liquidity
Assessing Clearfield, Inc.'s Liquidity
Current and Quick Ratios
The current ratio as of September 30, 2024, stands at 9.43, calculated from current assets of $229.6 million and current liabilities of $24.4 million. The quick ratio, which excludes inventories, is 0.62, derived from quick assets of $162.8 million against current liabilities of $24.4 million.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is $205.2 million, indicating a significant liquidity buffer. This reflects a decrease from $267.3 million in the previous year, primarily due to reduced current assets and the decline in inventory levels from $98.1 million to $66.8 million.
Cash Flow Statements Overview
For the year ended September 30, 2024, the cash flow from operating activities was $22.2 million, down from $18.4 million in 2023. Cash flows from investing activities showed a net usage of $6.9 million, compared to $112.2 million in the prior year, indicating a significant reduction in capital expenditures. Financing activities resulted in a net cash outflow of $36.9 million due to share repurchases totaling $33.4 million.
| Cash Flow Activities | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $22,223 | $18,424 |
| Net Cash Used in Investing Activities | ($6,896) | ($112,247) |
| Net Cash (Used in) Provided by Financing Activities | ($36,906) | $115,002 |
Potential Liquidity Concerns or Strengths
Despite a strong current ratio, the quick ratio indicates a potential liquidity concern if immediate obligations arise, as it is below 1.0. The significant decrease in cash equivalents from $37.8 million to $16.2 million raises flags regarding liquidity management. However, the positive cash flow from operations and the ability to reduce capital expenditures are strengths that might mitigate short-term liquidity risks.
Is Clearfield, Inc. (CLFD) Overvalued or Undervalued?
Valuation Analysis
To determine if the company is overvalued or undervalued, we will analyze key financial ratios, stock price trends, dividend yields, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a significant indicator of valuation. As of the latest fiscal year, the company reported a net loss of $(12.5) million for 2024 with a diluted loss per share of $(0.85). This results in a P/E ratio that cannot be calculated as the earnings are negative.
Price-to-Book (P/B) Ratio
The P/B ratio provides insight into how the market values the company's equity compared to its book value. The total shareholders' equity is $275.8 million as of September 30, 2024. If the current stock price is $16.04, the book value per share is calculated as:
- Book Value per Share = Total Shareholders' Equity / Shares Outstanding
- Shares Outstanding = 14.2 million
- Book Value per Share = $275.8M / 14.2M = $19.42
- P/B Ratio = Stock Price / Book Value per Share = $16.04 / $19.42 = 0.825
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is another critical metric for valuation. As of September 30, 2024, the company reported:
- Enterprise Value = Market Capitalization + Total Debt - Cash
- Market Capitalization = $16.04 14.2M = $227.4 million
- Total Debt = $2.2 million
- Cash = $16.2 million
- Enterprise Value = $227.4M + $2.2M - $16.2M = $213.4 million
- EBITDA for 2024 = Net Loss + Interest + Taxes + Depreciation + Amortization = $(12.5M) + $0.5M + $3.8M + $7.4M = $6.4 million
- EV/EBITDA = $213.4M / $6.4M = 33.37
Stock Price Trends
Over the last 12 months, the stock price has shown significant volatility. The stock was priced at approximately $32.00 a year ago and has since decreased to $16.04, representing a decline of 50%.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, thus the dividend yield is 0%. The payout ratio is not applicable due to the absence of earnings.
Analyst Consensus
As of the latest reports, the consensus among analysts is a Hold rating, reflecting the mixed financial performance and uncertain market conditions.
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Negative Earnings) |
| P/B Ratio | 0.825 |
| EV/EBITDA Ratio | 33.37 |
| Stock Price (Current) | $16.04 |
| Stock Price (1 Year Ago) | $32.00 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Clearfield, Inc. (CLFD)
Key Risks Facing Clearfield, Inc.
Clearfield, Inc. is exposed to various internal and external risks that could impact its financial health. Below is a detailed analysis of these risks.
Industry Competition
The telecommunications equipment industry is characterized by intense competition. Clearfield faces significant competition from larger and more established companies, which could pressure pricing and market share. The company reported a 38% decrease in net sales year-over-year, from $268.7 million in fiscal year 2023 to $166.7 million in fiscal year 2024.
Regulatory Changes
Changes in government regulations can significantly affect Clearfield's operations. The company achieved BABA self-certification from the NTIA, aligning with new federal requirements, which may provide opportunities but also impose compliance costs.
Market Conditions
Adverse global economic conditions and geopolitical issues could negatively impact demand for Clearfield's products. The company reported a backlog of $25.1 million as of September 30, 2024, down 56.1% from $57.3 million a year earlier.
Operational Risks
Operational risks include reliance on single-source suppliers and potential supply chain disruptions. The company noted that reliance on specific suppliers could lead to increased costs or delays.
Financial Risks
Clearfield reported a net loss of $12.5 million for fiscal year 2024, a stark contrast to a net income of $32.5 million in fiscal year 2023. This significant decline highlights financial instability and potential liquidity issues.
Strategic Risks
The company faces strategic risks related to its growth initiatives and market expansion. If the telecommunications market does not continue to expand, Clearfield's growth may be hindered.
Mitigation Strategies
Clearfield is focusing on reducing inventory levels and enhancing cash flow from operations, with a reported positive cash flow of approximately $22.2 million for the full year. The company is also guiding for revenue growth in fiscal year 2025, with expected sales between $170 million and $185 million.
| Risk Factor | Description | Impact | Recent Financial Data |
|---|---|---|---|
| Industry Competition | High competition in the telecom sector | Pressure on pricing and market share | Net sales decreased by 38% year-over-year |
| Regulatory Changes | Compliance with new federal regulations | Increased compliance costs | BABA self-certification achieved |
| Market Conditions | Adverse economic conditions | Reduced demand for products | Order backlog of $25.1 million, down 56.1% |
| Operational Risks | Reliance on single-source suppliers | Potential for increased costs or delays | Operational disruptions noted |
| Financial Risks | Significant net loss | Liquidity issues | Net loss of $12.5 million in FY 2024 |
| Strategic Risks | Growth initiatives may not yield expected results | Hindered growth potential | Revenue guidance for FY 2025: $170-$185 million |
Future Growth Prospects for Clearfield, Inc. (CLFD)
Future Growth Prospects for Clearfield, Inc.
Analysis of Key Growth Drivers
The company is poised for growth through several key drivers:
- Product Innovations: The ongoing development of new fiber connectivity solutions is expected to enhance market competitiveness.
- Market Expansions: Expansion into underserved regions, particularly in rural broadband markets, is projected to increase sales.
- Acquisitions: Potential acquisitions aimed at broadening product offerings and market reach are under consideration.
Future Revenue Growth Projections and Earnings Estimates
For fiscal year 2025, the company has provided a revenue guidance of $170 million to $185 million. This reflects an anticipated recovery from the previous fiscal year, where net sales totaled $166.7 million, down from $268.7 million in fiscal 2023.
| Fiscal Year | Projected Revenue ($ million) | Previous Year Revenue ($ million) | Percentage Change (%) |
|---|---|---|---|
| 2024 | 166.7 | 268.7 | -38% |
| 2025 (Projected) | 170-185 | N/A | N/A |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company plans to leverage public and private funding initiatives to support rural broadband expansion, including the Broadband Equity, Access, and Deployment (BEAD) Program. Initial revenue from this initiative is expected in late 2025. Additionally, the self-certification recognition from the NTIA for the Build America Buy America (BABA) requirements positions the company favorably for upcoming contracts.
Competitive Advantages That Position the Company for Growth
Key competitive advantages include:
- Strong Order Backlog: As of September 30, 2024, the order backlog was $25.1 million, providing a solid foundation for future revenue.
- Operational Efficiency: The company reported positive cash flow from operations of approximately $22.2 million for the full year.
- Market Leadership: With a focus on fiber optic management, the company benefits from a growing demand for high-speed internet solutions.
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Updated on 16 Nov 2024
Resources:
- Clearfield, Inc. (CLFD) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of Clearfield, Inc. (CLFD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Clearfield, Inc. (CLFD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.