Clearfield, Inc. Continues Profitable Momentum in FY 09

Company Reports 6th consecutive quarter of year over year revenue growth

MINNEAPOLIS--(BUSINESS WIRE)-- Clearfield, Inc. (Nasdaq: CLFD):

    --  Net Sales:                   $5.9M, up 26% from previous year

    --  Gross Profit:                $2.0M, up 39% from previous year

    --  Gross Margin                 34%, up from 31% from previous year

    --  Income from Operations:      $0.2M, 8x previous year

    --  Net Income per share         $.02

Clearfield, Inc. (Nasdaq: CLFD) today announced results for the first fiscal quarter of 2009 which ended December 31, 2008. Revenue for the current quarter was $5,933,000 in comparison to $4,697,000 for 2008, an increase of 26 percent. Gross profit was $2,014,000 in comparison to $1,449,000 for the earlier period, an increase of 39 percent. The Company reported net income of $217,000 or $.02 per share. After consideration for interest income and income recognized from discontinued operations (due to a change in recognition of period costs associated with lease obligations), net income increased by 122% over the previous year.

Comments on Operations

"The Fiber to the Premise (Fttp) market continues to demonstrate strong acceptance of the Clearfield FieldSmart fiber management platform as is evidenced by our continued revenue growth," commented Cheri Beranek Podzimek, president and CEO of Clearfield. "While we operate in a seasonal marketplace, we are pleased with our strong year-over-year performance."

"In reviewing these numbers, it is crucial to note that while the company did report $395,000 in net income during this period of the previous year, only $27,000 was associated with income from continuing operations. This compares to $217,000 in net income this year of which $209K was associated with income from operations. We are exceptionally pleased with the strong increase in gross margin which continues to outpace our revenue growth. While we are carefully monitoring the poor economic conditions and their potential impact on the Company, we remain optimistic in light of this strong start."

"Finally, this quarter the Company was able to reverse the previous non-cash, non-permanent charges to our Balance sheet associated with the 2008 collapse of the Auction Rate Security (ARS) Market. The result is long term assets associated with the ARS market have now been converted to cash at par value. Profit for the quarter and this reversal of previous ARS charges results in an increase of Shareholder Equity of $511,000.

About Clearfield, Inc Clearfield, Inc., designs and manufactures FieldSmart - a modular fiber management platform using the patented Clearview Cassette as an "Any Application, Anywhere" multiplier to meeting the fiber management needs of the broadband service provider. Product lines include the latest generation Fiber Distribution System (FDS) for the inside plant, the Fiber Scalability Center (FSC) for the outside plant, and Fiber Delivery Points (FDP) for access networks. The FDS, FSC and FDP product lines support a wide range of panel configurations, densities, connectors and adapter options, and are offered alongside an assortment of passive optical components and a complete line of fiber and copper assemblies for indoor plant, outside plant and access environments. Clearfield is a public company, traded on Nasdaq:CLFD.

Forward-Looking Statements

Forward-looking statements contained herein are made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. 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, delays in or increased costs of production, delays in or lower than anticipated sales of the Company's new products, the Company's ability to sell such products at a profitable price, the Company's ability to fund operations, and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to update such statements to reflect actual events.


                                           Three Months Ended

                                           December 31,

                                           2008              2007

Revenues                                   $   5,933,287     $   4,697,440

Cost of sales                                  3,919,079         3,247,969

Gross profit                                   2,014,208         1,449,471

Operating expenses

Selling, general and administrative            1,804,978         1,422,459

Income from operations                         209,230           27,012

Interest income                                31,750            87,806

Interest expense                               (1,906     )      (3,136     )

Other income                                   13,644            13,417

                                               43,488            98,087

Income before income taxes                     252,718           125,099

Income tax expense                             35,231            27,170

Net income from continuing operations          217,487           97,929

Net income from discontinued operations        -                 342,390

Net loss on disposal of assets of              -                 (44,951    )
discontinued operations

Total income from discontinued operations      -                 297,439

Net income                                 $   217,487       $   395,368

Net income per share:

Continuing operations                        $ 0.02            $ 0.01

Discontinued operations                      $ 0.00            $ 0.02

Basic and diluted                            $ 0.02            $ 0.03

Weighted average shares outstanding:

Basic and diluted                              11,938,131        11,872,331

FINANCIAL RESULTS (unaudited -continued)

                                                December 31,     September 30,
                                                2008             2008


Current Assets

Cash and cash equivalents                       $ 7,609,966      $ 4,333,709

Accounts receivable, net                          1,750,593        2,533,447

Inventories                                       1,900,233        2,088,769

Other current assets                              182,632          115,344

Total current assets                              11,443,424       9,071,269

Property plant and equipment, net                 1,531,825        1,604,202

Other Assets

Available for sale securities                     -                3,036,000

Goodwill                                          2,570,511        2,570,511

Other                                             288,032          284,309

Notes receivable                                  422,926          432,846

Total other assets                                3,281,469        6,323,666

Total Assets                                    $ 16,256,718     $ 16,999,137

Liabilities and Shareholders' Equity

Current Liabilities

Current maturities of long term debt            $ 63,448         $ 62,126

Accounts payable                                  925,005          1,849,633

Accrued compensation                              721,059          903,276

Accrued expenses                                  148,309          301,859

Total current liabilities                         1,857,821        3,116,894

Long term debt, net of current maturities         16,715           33,081

Deferred rent                                     89,700           89,641

Deferred income taxes                             189,259          166,904

Total Liabilities                                 2,153,495        3,406,520

Shareholders' Equity

Undesignated shares, 4,999,500 authorized         -                -
shares: no shares issued and outstanding

Preferred stock, $.01 par value; 500 shares; no   -                -
shares outstanding

Common stock, authorized 50,000,000, $ .01 par
value; 11,938,131 and 11,872,331 shares issued    119,381          119,381
and outstanding at December 31, 2008 and 2007,

Additional paid-in capital                        52,195,338       52,166,219

Accumulated deficit                               (38,211,496 )    (38,428,983 )

Accumulated other comprehensive loss              -                (264,000    )

Total shareholders' equity                        14,103,223       13,592,617

Total Liabilities and Shareholders' Equity      $ 16,256,718     $ 16,999,137

    Source: Clearfield, Inc.