Clearfield, Inc. has recently released its 10-K report, providing a detailed overview of its business operations and financial performance. The company, headquartered in Minneapolis, Minnesota, specializes in manufacturing and selling fiber connectivity products, including panels, cabinets, enclosures, optical components, and fiber pathway protection methods for communication networks. Clearfield serves a wide range of customers, including community broadband providers, regional service providers, national carriers, and multiple system operators.
In the year ended September 30, 2024, Clearfield reported a 38% decrease in net sales, amounting to $166,705,000 compared to $268,720,000 in the previous fiscal year. International sales represented 27% of net sales in 2024, compared to 19% in 2023. The decrease in net sales was primarily attributed to lower demand across Clearfield's core markets, with sales to the Community Broadband market decreasing by 41%, sales to MSO/Cable TV market decreasing by 49%, and sales to National Carriers decreasing by 2%.
The cost of sales for fiscal year 2024 was $137,816,000, a 25% decrease from $183,441,000 in 2023. This led to a 66% decrease in gross profit, which amounted to $28,889,000 in 2024 compared to $85,278,000 in 2023. The gross profit margin was negatively affected by unabsorbed overhead in manufacturing facilities due to lower demand and an increase in inventory reserves of $9,841,000.
Selling, general and administrative expenses for fiscal year 2024 amounted to $52,111,000, reflecting an increase of 9% compared to $47,992,000 in 2023. This increase was primarily due to higher performance-based compensation, stock-based compensation, and professional fees.
The company reported a loss from operations of $23,222,000 for fiscal year 2024, compared to income from operations of $37,286,000 in 2023. The net loss for fiscal year 2024 was $12,453,000, or $(0.85) per basic and diluted share, in contrast to the net income of $32,533,000, or $2.17 per basic and diluted share, for fiscal year 2023.
In the year ended September 30, 2023, Clearfield's net sales decreased by 1% to $268,720,000 from $270,883,000 in 2022. The company's cost of sales increased by 16% to $183,441,000 in 2023, leading to a 25% decrease in gross profit. Selling, general and administrative expenses for fiscal year 2023 decreased by 2% compared to 2022.
The acquisition of Nestor Cables in July 2022 led to the reassessment of Clearfield's operating segments. The company's reportable segments are based on its method of internal reporting and are defined based on the reporting and review process used by the Chief Executive Officer.
These figures provide a comprehensive insight into Clearfield's financial performance and the challenges it faced in the past fiscal years. Today the company's shares have moved -4.4% to a price of $28.32. For more information, read the company's full 10-K submission here.
