Clearfield, Inc. Net Income surged on 11.1% and Revenue increased on 5.0%
11/08/2018 • About Clearfield, Inc. (
$CLFD) • By InTwits
Clearfield, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Clearfield, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $1m in FY2018, $2m in FY2017, $2m in FY2016, $5m in FY2015, $1m in FY2014
- The company has business model with low profitability: ROIC is 7.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Clearfield, Inc.'s Revenue increased on 5.0%. Revenue growth showed acceleration in FY18Q4 - it increased 22.0% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 55.5 pp from -99.8% to -155% in FY2018.
Gross Margin decreased slightly on 1.0 pp from 40.9% to 39.9% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. SG&A as a % of Revenue stuck to a growing trend at 1.6 pp per annum in FY2014-FY2018.
Net Income margin showed almost no change in FY2018.
Investments (CAPEX, working capital and M&A)
Clearfield, Inc.'s CAPEX/Revenue was 1.4% in FY2018. CAPEX/Revenue decreased on 6.1 pp from 7.5% in FY2015 to 1.4% in FY2018. It's average level of CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at low ROIC (7.6%) and ROE (6.4%). ROIC decreased slightly on 0.73 pp from 8.3% to 7.6% in FY2018. ROE showed almost no change in FY2018.
Leverage (Debt)
The company has no debt. Cash dropped on 53.9%.
Valuation and dividends
Clearfield, Inc.'s trades at EV/EBITDA 21.5x and P/E 37.8x.
Management team
Clearfield, Inc.'s CEO is Cheryl Podzimek Beranek "Cheri". Cheryl Podzimek Beranek "Cheri" is a founder and has 12 years tenure with the company. Daniel R Herzog is a the company's CFO. Daniel R Herzog has spent 7 years at the company.
Financial and operational results
FY ended 09/30/2018
Clearfield, Inc. ($CLFD) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 58.045 | 60.324 | 75.288 | 73.948 | 77.651 | 5.0% |
| Gross Profit | 24.599 | 24.868 | 32.870 | 30.264 | 30.997 | 2.4% |
| SG&A | 16.081 | 17.817 | 22.139 | 24.952 | 25.926 | 3.9% |
| EBITDA | 9.218 | 8.267 | 12.181 | 6.934 | 7.119 | 2.7% |
| Net Income | 5.433 | 4.682 | 8.013 | 3.848 | 4.275 | 11.1% |
Balance Sheet
|
|---|
| Cash | 18.191 | 18.071 | 28.014 | 18.536 | 8.548 | -53.9% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 1.418 | 4.519 | 1.550 | 1.952 | 1.066 | -45.4% |
Ratios
|
|---|
| Revenue growth | 8.8% | 3.9% | 24.8% | -1.8% | 5.0% | |
| EBITDA growth | 16.4% | -10.3% | 47.3% | -43.1% | 2.7% | |
|
|---|
| Gross Margin | 42.4% | 41.2% | 43.7% | 40.9% | 39.9% | -1.0% |
| EBITDA Margin | 15.9% | 13.7% | 16.2% | 9.4% | 9.2% | -0.2% |
| SG&A, % of revenue | 27.7% | 29.5% | 29.4% | 33.7% | 33.4% | -0.4% |
| Net Income Margin | 9.4% | 7.8% | 10.6% | 5.2% | 5.5% | 0.3% |
| CAPEX, % of revenue | 2.4% | 7.5% | 2.1% | 2.6% | 1.4% | -1.3% |
|
|---|
| ROIC | 19.6% | 14.2% | 18.6% | 8.3% | 7.6% | -0.7% |
| ROE | 12.5% | 9.6% | 14.1% | 6.1% | 6.4% | 0.4% |
| Net Debt/EBITDA | -2.0x | -2.2x | -2.3x | -2.7x | -1.2x | 1.5x |
Clearfield, Inc. ($CLFD) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 17 | 17 | 21 | 22 | | -7.7% | -4.7% | 9.5% | 22.0% |
| EBITDA | 1 | 0 | 3 | 3 | | -31.6% | -98.3% | 71.4% | 57.6% |
| Net Income | 1 | -0 | 2 | 2 | | 7.6% | -133.6% | 118.5% | 49.3% |
Balance Sheet
|
|---|
| Cash | 20 | 9 | 9 | 9 | | -7.3% | -59.3% | -53.0% | -53.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 42.1% | 40.3% | 39.5% | 38.3% | | 2.7% | -1.9% | -0.9% | -3.3% |
| EBITDA Margin | 6.4% | 0.2% | 13.8% | 13.6% | | -2.2% | -9.4% | 5.0% | 3.1% |
| Net Income Margin | 5.6% | -1.8% | 8.2% | 8.4% | | 0.8% | -7.0% | 4.1% | 1.5% |
Peers in Communications Equipment
Below you can find Clearfield, Inc. benchmarking vs. other companies in Communications Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | | 30.6% | 75.2% |
| Extreme Networks, Inc. ($EXTR) | | 6.4% | -4.4% | 13.2% | 64.4% |
| Optical Cable Corporation ($OCC) | | -11.3% | -12.2% | -0.8% | 37.0% |
| ParkerVision Inc ($PRKR) | | | 37,601.2% | -97.5% | 35.0% |
| Network-1 Technologies, Inc. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
| |
|---|
| Median (66 companies) | | -0.4% | 7.3% | 5.6% | 2.8% |
|---|
| Clearfield, Inc. ($CLFD) | | 3.9% | 24.8% | -1.8% | 5.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.1% | 82.7% | 83.1% | 83.1% | 83.3% |
| Radware Ltd. ($RDWR) | 82.1% | 82.4% | 81.8% | 81.3% | 82.2% |
| Radcom Ltd. ($RDCM) | 63.2% | 76.8% | 69.6% | 71.8% | 74.0% |
| Casa Systems, Inc. ($CASA) | | 70.8% | 69.1% | 73.4% | 73.4% |
| NetScout Systems, Inc. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 41.4% | 44.0% | 43.9% | 41.7% | 41.2% |
|---|
| Clearfield, Inc. ($CLFD) | 42.4% | 41.2% | 43.7% | 40.9% | 39.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 35.5% | 33.7% | 50.6% | 37.8% | 42.8% |
| InterDigital, Inc. ($IDCC) | 50.8% | 58.1% | 73.6% | 67.3% | 41.9% |
| EchoStar Corporation ($SATS) | 25.7% | 39.7% | 40.3% | 38.1% | 37.4% |
| Ubiquiti Networks, Inc. ($UBNT) | 34.7% | 25.5% | 37.3% | 34.3% | 32.8% |
| Ituran Location and Control Ltd. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| |
|---|
| Median (65 companies) | 5.3% | 4.7% | 5.5% | 6.0% | 4.6% |
|---|
| Clearfield, Inc. ($CLFD) | 15.9% | 13.7% | 16.2% | 9.4% | 9.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Resonant Inc. ($RESN) | | | 132.5% | 124.8% | 245.2% |
| ViaSat, Inc. ($VSAT) | 22.8% | 26.5% | 26.7% | 33.0% | 32.1% |
| Applied Optoelectronics, Inc. ($AAOI) | 31.5% | 30.1% | 19.0% | 17.5% | 26.9% |
| EchoStar Corporation ($SATS) | 19.7% | 43.8% | 39.9% | 30.9% | 26.5% |
| Finisar Corporation ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.2% | 2.2% | 1.9% | 1.8% | 1.7% |
|---|
| Clearfield, Inc. ($CLFD) | 2.4% | 7.5% | 2.1% | 2.6% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 33.9% | 40.8% | 43.1% | 46.9% | 47.9% |
| Ubiquiti Networks, Inc. ($UBNT) | 61.4% | 31.5% | 41.5% | 38.5% | 39.1% |
| Motorola Solutions, Inc. ($MSI) | -16.1% | 18.9% | 26.4% | 39.5% | 35.3% |
| Ituran Location and Control Ltd. ($ITRN) | 50.9% | 46.8% | 50.1% | 48.5% | 35.1% |
| Casa Systems, Inc. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 1.2% | 2.0% | 2.2% | 2.1% | 0.3% |
|---|
| Clearfield, Inc. ($CLFD) | 19.6% | 14.2% | 18.6% | 8.3% | 7.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Extreme Networks, Inc. ($EXTR) | | | -2.2x | -1.5x | 7.1x |
| ViaSat, Inc. ($VSAT) | 3.4x | 2.5x | 3.2x | 2.5x | 5.8x |
| CommScope Holding Company, Inc. ($COMM) | 2.3x | 9.6x | 4.3x | 4.6x | 4.4x |
| Inseego Corp. ($INSG) | | | | | 3.9x |
| Finisar Corporation ($FNSR) | -0.3x | 0.2x | -0.5x | 1.6x | 3.8x |
| |
|---|
| Median (45 companies) | -0.7x | -0.6x | -0.8x | -0.6x | 0.2x |
|---|
| Clearfield, Inc. ($CLFD) | -2.0x | -2.2x | -2.3x | -2.7x | -1.2x |
