Clearfield, Inc. (CLFD) has reported 39.21 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $0.91 million, or $0.07 a share in the quarter, compared with $1.49 million, or $0.11 a share for the same period last year. Revenue during the quarter grew 4.16 percent to $17.65 million from $16.95 million in the previous year period. Gross margin for the quarter contracted 79 basis points over the previous year period to 42.16 percent. Total expenses were 92.74 percent of quarterly revenues, up from 87.35 percent for the same period last year. That has resulted in a contraction of 539 basis points in operating margin to 7.26 percent.
Operating income for the quarter was $1.28 million, compared with $2.14 million in the previous year period.
“Revenue growth of 4% for second quarter and 10% year-to-date is beneath our expectation for this six month period,” said Clearfield chief executive officer, Cheri Beranek. "While momentum in our international markets has been renewed and our progress along our Tier 1 initiatives has been accelerating, we did experience a noticeable dip in demand for our solutions from our customers in the wireless market. We see this as a short-term shift in procurement as these carriers reduce their near-term capital expenditures in preparation for the enhancement of optical fiber required for higher speed networks. In addition, momentum within our alternative carrier markets has stalled consistent with the market speculation that has surrounded this customer group. Due to the volatility of this market space, we are unable to forecast when we may see strong demand re-establish itself here.
Operating cash flow turns negativeClearfield, Inc. has spent $0.01 million cash to meet operating activities during the first half as against cash inflow of $3.03 million in the last year period. The company has spent $5.66 million cash to meet investing activities during the first six months as against cash outgo of $0.38 million in the last year period.
Cash flow from financing activities was $0.14 million for the first six months as against cash outgo of $0.17 million in the last year period.
Cash and cash equivalents stood at $22.48 million as on Mar. 31, 2017, up 9.40 percent or $1.93 million from $20.55 million on Mar. 31, 2016.
Working capital increases
Clearfield, Inc. has recorded an increase in the working capital over the last year. It stood at $42.31 million as at Mar. 31, 2017, up 6.47 percent or $2.57 million from $39.74 million on Mar. 31, 2016. Current ratio was at 9.39 as on Mar. 31, 2017, up from 7.92 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 57 days for the quarter from 80 days for the last year period. Days sales outstanding went down to 33 days for the quarter compared with 35 days for the same period last year.
Days inventory outstanding has decreased to 44 days for the quarter compared with 71 days for the previous year period. At the same time, days payable outstanding went down to 20 days for the quarter from 25 for the same period last year.
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