Clearfield, Inc. EBITDA jumped on 62.0% and Revenue increased on 9.5%
11/04/2020 • About Clearfield, Inc. (
$CLFD) • By InTwits
Clearfield, Inc. reported FY2020 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 2.2%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: $5m in FY2020, $11m in FY2019, $7m in FY2018, $10m in FY2017, $6m in FY2016
- The company has business model with average profitability: ROIC is 10.6%
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 9.5%. Revenue growth showed acceleration in FY20Q4 - it increased 14.0% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from -4.8% to -6.7% in FY2020. During the last 5 years EBITDA Margin bottomed in FY2019 at 8.7%.
Gross Margin increased on 2.3 pp from 38.4% to 40.7% in FY2020. During FY2016-FY2020 Gross Margin bottomed in FY2019 at 38.4%. SG&A as a % of Revenue decreased slightly on 0.61 pp from 32.3% to 31.7% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2017 at 33.7% and was declining since that time.
Net Income margin increased on 2.5 pp from 5.4% to 7.8% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Clearfield, Inc. had CAPEX/Revenue of 1.9%. The company showed small CAPEX/Revenue decline of 0.70 pp from 2.6% in FY2017 to 1.9% in FY2020. It's average level of CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at low ROIC (10.6%) and ROE (9.3%). ROIC increased on 3.3 pp from 7.2% to 10.6% in FY2020. ROE increased on 2.9 pp from 6.4% to 9.3% in FY2020. During the last 5 years ROIC bottomed in FY2019 at 7.2%.
Leverage (Debt)
Debt level is -1.1x Net Debt / EBITDA and 0.2x Debt / EBITDA. Debt jumped while cash surged on 63.2%.
Clearfield, Inc. has no short term refinancing risk: cash is higher than short term debt (2,471.5%).
Valuation and dividends
The company's trades at EV/EBITDA 24.4x and P/E 41.8x.
Management team
Cheryl Podzimek Beranek "Cheri" is a Clearfield, Inc.'s CEO. Cheryl Podzimek Beranek "Cheri" has spent 13 years with the company. Daniel R Herzog is a Clearfield, Inc.'s CFO. Daniel R Herzog has spent 9 years at the company.
Financial and operational results
FY ended 09/30/2020
Clearfield, Inc. ($CLFD) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 75.288 | 73.948 | 77.651 | 85.034 | 93.075 | 9.5% |
| Gross Profit | 32.870 | 30.264 | 30.997 | 32.689 | 37.914 | 16.0% |
| SG&A | 22.139 | 24.952 | 25.926 | 27.501 | 29.530 | 7.4% |
| EBITDA | 12.181 | 6.934 | 7.119 | 7.367 | 11.932 | 62.0% |
| Net Income | 8.013 | 3.848 | 4.275 | 4.566 | 7.293 | 59.7% |
Balance Sheet
|
|---|
| Cash | 28.014 | 18.536 | 8.548 | 10.082 | 16.450 | 63.2% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.666 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 2.129 | |
Cash flow
|
|---|
| Capex | 1.550 | 1.952 | 1.066 | 2.512 | 1.806 | -28.1% |
Ratios
|
|---|
| Revenue growth | 24.8% | -1.8% | 5.0% | 9.5% | 9.5% | |
| EBITDA growth | 47.3% | -43.1% | 2.7% | 3.5% | 62.0% | |
|
|---|
| Gross Margin | 43.7% | 40.9% | 39.9% | 38.4% | 40.7% | 2.3% |
| EBITDA Margin | 16.2% | 9.4% | 9.2% | 8.7% | 12.8% | 4.2% |
| SG&A, % of revenue | 29.4% | 33.7% | 33.4% | 32.3% | 31.7% | -0.6% |
| Net Income Margin | 10.6% | 5.2% | 5.5% | 5.4% | 7.8% | 2.5% |
| CAPEX, % of revenue | 2.1% | 2.6% | 1.4% | 3.0% | 1.9% | -1.0% |
|
|---|
| ROIC | 18.6% | 8.3% | 7.6% | 7.2% | 10.6% | 3.3% |
| ROE | 14.1% | 6.1% | 6.4% | 6.4% | 9.3% | 2.9% |
| Net Debt/EBITDA | -2.3x | -2.7x | -1.2x | -1.4x | -1.1x | 0.2x |
Clearfield, Inc. ($CLFD) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 19 | 20 | 26 | 27 | | -3.5% | 6.9% | 18.6% | 14.0% |
| EBITDA | 1 | 2 | 4 | 5 | | -26.5% | 92.1% | 115.2% | 67.1% |
| Net Income | 1 | 1 | 3 | 3 | | -50.4% | 103.3% | 130.3% | 61.5% |
Balance Sheet
|
|---|
| Cash | 11 | 9 | 9 | 16 | | -31.1% | 8.5% | 53.9% | 63.2% |
| Short Term Debt | 1 | 1 | 1 | 1 | | - | - | - | - |
| Long Term Debt | 2 | 2 | 2 | 2 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 39.9% | 39.9% | 41.5% | 41.2% | | 0.3% | 3.1% | 3.1% | 2.3% |
| EBITDA Margin | 6.5% | 7.8% | 17.3% | 16.8% | | -2.0% | 3.5% | 7.8% | 5.3% |
| Net Income Margin | 2.6% | 3.7% | 11.5% | 11.2% | | -2.4% | 1.7% | 5.6% | 3.3% |
Peers in Communications Equipment
Below we provide Clearfield, Inc. benchmarking against other companies in Communications Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | - | 116.2% | -19.8% | 40.3% | 329.9% |
| Franklin Wireless Corp ($FKWL) | - | -18.8% | -38.1% | 21.3% | 105.9% |
| Ribbon Communications Inc. ($RBBN) | - | 30.6% | 75.2% | -2.6% | 49.8% |
| Inseego Corp. ($INSG) | - | -10.0% | -7.7% | 8.4% | 43.0% |
| Casa Systems, Inc. ($CASA) | - | 11.2% | -15.5% | -5.0% | 39.3% |
| |
|---|
| Median (35 companies) | 7.5% | 5.6% | 2.8% | 3.7% | 2.1% |
|---|
| Clearfield, Inc. ($CLFD) | - | -1.8% | 5.0% | 9.5% | 9.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| F5 Networks, Inc. ($FFIV) | 83.1% | 83.1% | 83.3% | 84.1% | 82.6% |
| Radware Ltd. ($RDWR) | 81.8% | 81.3% | 82.2% | 82.1% | 82.0% |
| Radcom Ltd. ($RDCM) | 69.6% | 71.8% | 74.0% | 70.0% | 71.4% |
| AudioCodes Ltd. ($AUDC) | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% |
| Arista Networks, Inc. ($ANET) | 64.0% | 64.5% | 63.8% | 64.1% | 63.9% |
| |
|---|
| Median (33 companies) | 43.9% | 41.7% | 41.2% | 44.3% | 46.8% |
|---|
| Clearfield, Inc. ($CLFD) | 43.7% | 40.9% | 39.9% | 38.4% | 40.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| InterDigital, Inc. ($IDCC) | 73.6% | 67.3% | 41.9% | 37.5% | 39.5% |
| EchoStar Corporation ($SATS) | 40.3% | 38.1% | 37.4% | 36.4% | 35.0% |
| Arista Networks, Inc. ($ANET) | 23.3% | 29.8% | 14.0% | 35.7% | 33.1% |
| Motorola Solutions, Inc. ($MSI) | 22.2% | 25.5% | 22.0% | 26.7% | 25.9% |
| F5 Networks, Inc. ($FFIV) | 30.3% | 29.9% | 30.1% | 26.2% | 22.9% |
| |
|---|
| Median (32 companies) | 5.5% | 6.0% | 4.6% | 3.1% | 8.8% |
|---|
| Clearfield, Inc. ($CLFD) | 16.2% | 9.4% | 9.2% | 8.7% | 12.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | 132.5% | 124.8% | 245.2% | 109.7% | 22.3% |
| EchoStar Corporation ($SATS) | 39.9% | 30.9% | 26.5% | 22.2% | 21.7% |
| KVH Industries, Inc. ($KVHI) | 3.2% | 8.0% | 9.3% | 7.9% | 8.9% |
| Harmonic Inc. ($HLIT) | 3.7% | 3.2% | 1.7% | 2.6% | 8.5% |
| Applied Optoelectronics, Inc. ($AAOI) | 19.0% | 17.5% | 26.9% | 15.1% | 6.7% |
| |
|---|
| Median (32 companies) | 1.9% | 1.8% | 1.7% | 2.4% | 2.2% |
|---|
| Clearfield, Inc. ($CLFD) | 2.1% | 2.6% | 1.4% | 3.0% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Franklin Wireless Corp ($FKWL) | 12.2% | 4.7% | -14.9% | -13.0% | 37.5% |
| Motorola Solutions, Inc. ($MSI) | 26.4% | 39.5% | 35.3% | 34.0% | 26.4% |
| Arista Networks, Inc. ($ANET) | 25.7% | 33.9% | 14.5% | 33.3% | 23.5% |
| AudioCodes Ltd. ($AUDC) | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% |
| F5 Networks, Inc. ($FFIV) | 43.1% | 46.9% | 47.9% | 34.1% | 16.5% |
| |
|---|
| Median (35 companies) | 2.2% | 2.1% | 0.3% | -1.6% | 1.9% |
|---|
| Clearfield, Inc. ($CLFD) | 18.6% | 8.3% | 7.6% | 7.2% | 10.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inseego Corp. ($INSG) | - | - | 3.9x | 82.5x | 26.9x |
| CommScope Holding Company, Inc. ($COMM) | 4.3x | 4.6x | 4.4x | 27.0x | 10.5x |
| Harmonic Inc. ($HLIT) | - | - | 3.4x | 1.9x | 6.5x |
| Ribbon Communications Inc. ($RBBN) | -17.2x | - | - | - | 3.5x |
| Casa Systems, Inc. ($CASA) | -0.2x | 0.3x | 0.2x | 32.1x | 3.2x |
| |
|---|
| Median (24 companies) | -0.8x | -0.6x | 0.2x | -0.1x | -0.3x |
|---|
| Clearfield, Inc. ($CLFD) | -2.3x | -2.7x | -1.2x | -1.4x | -1.1x |
