Clearfield, Inc. Reports Third Quarter FY2010 Performance
Record Quarterly Operating Income is Fueled by Gross Margin Gains and Revenue Stabilization
MINNEAPOLIS, July 29, 2010 (GLOBE NEWSWIRE) --
* Revenue: $6.8 million, up 43.5% from last quarter; down 5.3% from
previous year's third quarter
* Gross profit: $2.6 million, up 50.2% from last quarter; down 3.0% from
previous year's third quarter
* Gross margin: 38.4%, up from 37.5% in previous year's third quarter
$611,000, up $68,000 or 12.6% from previous year's third
* Operating income: quarter
$629,000, up $42,000 or 7.2% from previous year's third
* Net income: quarter
* Basic and diluted
net income per
share: $.05
Clearfield, Inc. (Nasdaq:CLFD), the specialist in fiber management solutions for Fiber to the Premises (FTTp) deployments, today announced results for the third fiscal quarter of 2010 which ended June 30, 2010. Net income was $629,000 or $.05 per basic and diluted income per share, up 7.2% from the previous year's third quarter. Operating income rose 12.6% to $611,000, up $68,000 from the previous year's third quarter. Gross margin improvements of nearly 1% as compared to prior year's third quarter off-set a 5.3% reduction in revenue for the quarter as compared to the third quarter of 2009. Revenue for the quarter ended June 30, 2010 was $6,778,000 in comparison to $7,160,000 for the quarter ended June 30, 2009. Gross profit dollars for the third quarter of fiscal 2010 were $2,603,000 in comparison to $2,684,000 for the third quarter of fiscal 2009, a decrease of 3.0%. Gross margins for the quarter improved one percent to 38.4% from the same quarter of last fiscal year. The year-over-year improvement is the result of product mix, material cost improvements and manufacturing efficiency. Operating expenses were $1,993,000, a decrease of 7% from $2,142,000 in the same quarter of fiscal 2009. While the Company continues to invest in sales, marketing and engineering resources during this period, these increased costs were off-set by a $300,000 reduction in incentive compensation expense.
Year to Date
Revenue for the first three quarters of fiscal 2010 was $16,446,000 in comparison to $18,326,000 for the same period of 2009, a decrease of 10%. Gross profit for the nine month period was $6,038,000 in comparison to $6,517,000 for the comparable period for fiscal 2009, a decrease of 7%. Gross margins have continued to improve year-to-date to 37% for the nine months ended June 30, 2010 compared to 36% from the same period of last fiscal year. Operating expenses were $5,747,000 for the nine months ended June 30, 2010 an increase of 2% from $5,637,000 in the same period of fiscal 2009. The Company's operating income through the first three quarters of fiscal 2010 was $291,000 compared to $880,000 in the same period of fiscal 2009 with net income for the same respective periods of $361,000 and $936,000.
Comments on Operations
"Our market is building momentum as the economy strengthens," commented Cheri Beranek, President and Chief Executive Officer of Clearfield. "Our continual improvement programs focused on enhancing gross margins are fueling the significant gains in operating income for the Company this quarter. Strong summer fiber optic deployments and the funding associated with the broadband stimulus programs are just now beginning to bear fruit for Clearfield."
"As our market landscape changes due to consolidation of our customers and competitors, Clearfield's long-standing commitment to nimble product development initiatives, aggressive sales strategies and a customer-first value system is resonating strongly with customers and our pipeline of active quotes continues to expand."
About Clearfield, Inc.
Clearfield, Inc. designs and manufactures the FieldSmart Fiber Management Platform, which includes its latest generation FieldSmart Fiber Crossover Distribution System (FxDS), FieldSmart Fiber Scalability Center (FSC) and FieldSmart Fiber Delivery Point (FDP) series. The FxDS, FSC and FDP product lines are based upon the patent pending technologies of the Clearview and xPAK cassettes and support a wide range of panel configurations, densities, connectors and adapter options, and are offered alongside an assortment of passive optical components. Clearfield provides a complete line of fiber and copper assemblies for inside plant, outside plant and access networks. Clearfield is a public company, traded on Nasdaq:CLFD. www.ClearfieldConnection.com
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 the effect of the significant downturn in the U.S. economy on Clearfield's customers; the impact of the American Recovery and Reinvestment Act or any other legislation on customer demand and purchasing patterns; cyclical selling cycles; need to introduce new products and effectively compete against competitive products; dependence on third-party manufacturers; limited experience in manufacturing, reliance on key customers; rapid changes in technology; the negative effect of product defects; the need to protect its intellectual property; the impact on its financial results or stock price of its ability to use its deferred tax asset, consisting primarily of net operating loss carryforwards, to offset future taxable income; the valuation of its goodwill and the effect of its stock price, among other factors, on the evaluation of goodwill; and other factors set forth in Clearfield's Annual Report on Form 10-K for the year ended September 30, 2009 as well as other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update such statements to reflect actual events.
CLEARFIELD, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED
Three Months Ended Nine Months Ended June
June 30, 30,
---------------------- ------------------------
2010 2009 2010 2009
---------- ---------- ----------- -----------
Revenues $6,778,193 $7,160,039 $16,445,626 $18,325,930
Cost of sales 4,174,998 4,475,573 10,407,347 11,809,104
---------- ---------- ----------- -----------
Gross profit 2,603,195 2,684,466 6,038,279 6,516,826
Operating expenses
Selling, general and
administrative 1,992,576 2,142,074 5,746,913 5,637,002
---------- ---------- ----------- -----------
Income from
operations 610,619 542,392 291,366 879,824
Other income
(expense)
Interest income 36,491 34,764 112,125 83,758
Interest expense -- (1,260) (820) (4,751)
Other income 11,498 48,243 35,850 75,818
---------- ---------- ----------- -----------
47,989 81,747 147,155 154,825
---------- ---------- ----------- -----------
Income before income
taxes 658,608 624,139 438,521 1,034,649
Income tax expense 29,595 37,119 77,559 99,093
---------- ---------- ----------- -----------
Net income $629,013 $587,020 $360,962 $935,556
========== ========== =========== ===========
Net income per share:
---------- ---------- ----------- -----------
Basic $.05 $.05 $.03 $.08
========== ========== =========== ===========
Diluted $.05 $.05 $.03 $.08
========== ========== =========== ===========
Weighted average
shares outstanding:
Basic 11,995,331 11,938,131 11,987,793 11,938,131
Diluted 12,437,853 11,945,419 12,460,069 12,945,419
CLEARFIELD, INC.
BALANCE SHEETS
UNAUDITED
June 30, September
2010 30, 2009
------------ ------------
Assets
Current Assets
Cash and cash
equivalents $4,886,316 $4,731,735
Short-term investments 1,345,566 2,108,566
Accounts receivable, net 2,473,885 2,723,414
Inventories 1,431,792 1,153,862
Other current assets 213,553 180,635
------------ ------------
Total Current Assets 10,351,112 10,898,212
Property, plant and
equipment, net 1,385,062 1,319,492
Other Assets
Long-term investments 3,760,163 2,840,000
Goodwill 2,570,511 2,570,511
Intangibles 27,649 --
Deferred taxes --long
term 2,168,674 2,231,990
Other 176,368 568,554
------------ ------------
Total other assets 8,703,365 8,211,055
------------ ------------
Total Assets $20,439,539 $20,428,759
============ ============
Liabilities and
Shareholders' Equity
Total current
liabilities $2,006,903 $2,493,006
Deferred rent 82,320 87,942
------------ ------------
Total Liabilities 2,089,223 2,580,948
Shareholders' Equity
Common stock 119,953 119,746
Additional paid-in
capital 52,513,475 52,372,139
Accumulated deficit (34,283,112) (34,644,074)
------------ ------------
Total Shareholders'
Equity 18,350,316 17,847,811
------------ ------------
Total Liabilities and
Shareholders' Equity $20,439,539 $20,428,759
============ ============
CONTACT: Clearfield, Inc.
Cheryl P. Beranek, Chief Executive Officer and President
763-476-6866
Investor-relations@clfd.net
Released July 29, 2010