Slide 1: Clearfield Earnings Presentation: Fiscal Q2 2023
Clearfield Earnings Presentation: Fiscal Q2 2023 Earnings Call May 4, 2023 1
Slide 2: Important Cautions Regarding Forward-Looking Statements
Important Cautions Regarding Forward-Looking Statements Forward-looking statements contained herein and in any related presentation or in the related Earnings Release are made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Words such as “may,” “will,” “expect,”
Slide 3: Introduction & Highlights
\7 CLEARFIELD Introduction & Highlights
Slide 4: Our Mission: What We Do
OUR MISSION: WHAT WE DO: Enabling the lifestyle Clearfield provides fiber better broadband protection, fiber provides management and fiber delivery solutions that enable rapid and cost- effective fiber-fed deployment throughout the broadband service provider space 4
Slide 5: Modular and Scalable Products
Modular and Scalable Products SeeChange™ and Clearview® Cassette NASDAQ:CLFD 5
Slide 6: Why We Win
Why We Win Singularly Focused on Serving the Fiber Market Attractive Total Cost of Ownership through Reduced Installation Cost and Maintenance Time Our Testing Shows FastPassTM Approach Cuts Install Time Required for Homes Passed by 50% Ease, Speed, and Cost of Deployment Delivery of a Com
Slide 7: Fiber Deployment shift is occurring in U.S.
FTTH Homes Marketed U.S. Cumulative Fiber Deployment 70 60 shift is occurring in 50 2023 Millions 40 30 20 10 0 FY19 FY20 FY21 FY22 FY23* FY24* FY25* FY26* Tel - ILEC Tier 1 Other Service Providers Source: RVA, February 2023 Proprietary & Confidential * Projected 7 7
Slide 8: Financial Performance
V7 CLEARFIELD Financial Performance
Slide 9: Quarterly Revenue
FINANCIAL PERFORMANCE Quarterly Revenue $100 $90 $80 $95 $86 34% $72 Q2 2023 Growth Rate YOY $70 $60 $50 $88 $40 $78 $71 $30 $61 $20 $10 $53 $72M $- Q2 2023 Revenue Q2 22 Q3 22 Q4 22* Q1 23* Q2 23 * Clearfield Organic Nestor Cables *Includes contribution from subsidiary Nestor Cables, which was acqu
Slide 10: Q2 FY23 Net Sales Comparison by Market
Q2 FY23 Net Sales Q2 FY23 Net Sales Composition Ended Comparison by Market 3/31/231 Quarterly Net Sales TTM Net Sales Legacy International (Legacy contract (Europe, Canada, Mexico, and manufacturing and FQ2 22 $152 Caribbean Markets) misc. sales) FQ2 22 $34 1% FQ2 23 FQ2 23 $27 18% $89 47% MSO 14% (
Slide 11: Q2 FY23 Net Sales Comparison by Market
Q2 FY23 Net Sales Q2 FY23 Net Sales Composition Ended Comparison by Market 3/31/231 Quarterly Net Sales FQ2 22 FQ2 23 Legacy $15 International (Legacy contract $13 (Europe, Canada, Mexico, and manufacturing and $12 $10 Caribbean Markets) misc. sales) 1% $7 18% $2 $2 $1 $1 $1 National Carrier MSO Int
Slide 12: Quarterly Gross Profit and Margin
FINANCIAL PERFORMANCE Quarterly Gross Profit and Margin $40.0 $37.5 50% 45% $35.0 $30.6 40% $29.3 $30.0 35% Gross profit levels have $25.0 $23.2 $23.6 declined due to the unused 30% capacity at our Mexico facility $20.0 25% and Nestor Cables as a higher $15.0 20% percentage of our business 15% this
Slide 13: Quarterly Operating Expenses
FINANCIAL PERFORMANCE Quarterly Operating Expenses $18.0 25% $16.0 $15.3 20% $14.0 $12.7 $12.8 $12.0 $11.2 $11.5 5 Percentage Points 15% YOY Decrease in $10.0 Operating Expenses as a $8.0 percent of Net Sales 10% $6.0 $4.0 5% $2.0 $0.0 0% Q2 22 Q3 22 Q4 22 * Q1 23 * Q2 23* Operating Expenses in $Mil
Slide 14: Quarterly Net Income
FINANCIAL PERFORMANCE Quarterly Net Income $18.0 30% $10.4M $17.0 $16.0 $14.3 25% $14.0 $12.7 Q2 2023 Net Income $12.0 20% $10.4 $10.0 $9.2 15% $8.0 $6.0 10% $4.0 $2.0 5% 14% Q2 2023 Percent of Net Sales $- 0% Q2 22 Q3 22 Q4 22 * Q1 23* Q2 23* Net Income $ Net Margin (%) *Includes contribution from
Slide 15: Balance Sheet
FINANCIAL PERFORMANCE Balance Sheet $166 million of cash, short-term and long-term investments $2 million of debt Raised $130 million in net proceeds in December 2022 secondary offering for working capital and general corporate purposes 15
Slide 16: Business Update & Outlook
\7 CLEARFIELD Business Update & Outlook
Slide 17: Business update: SeeChange, capacity, supply chain
Launched SeeChange™ • Reduces customer deployment times and labor costs Rightsizing capacity • Optimizes cost structure to navigate current market dynamics Strengthening supply chain • Reduces lead times Leverage our decade-long excellence in Community Broadband Pursuing cross-selling opport
Slide 18: Tremendous Market Across Rural Broadband
Tremendous Market Across Rural Broadband $12.5B+ Estimated US FTTH Market ~$200B Cumulative 5G Cycle Spend by 2035 ~55M Committed Fiber Homes Passed By 2030 Allocated For Broadband $100B Under Biden Infrastructure Package Annual Broadband Infrastructure $10B+ Subsidies Over Next 3 Years Target Broad
Slide 19: Long-term Catalysts
Long-term Catalysts Government Funding for unserved and underserved communities European Expansion 5G: Wireless and Wireline Integration Cloud, Edge and IoT Architecture NASDAQ:CLFD 19
Slide 20: Financial Outlook
Financial Outlook Annual Net Sales Net Income Per Share ($ in millions) ($) $380 - $393 $260 to $275 $1.80 to $2.10 $3.57 $271 $1.47 $141 $85 $93 $0.34 $0.53 FY19 Actual FY20 Actual FY21 Actual FY19 Actual FY20 Actual FY21 Actual FY22 Actual FY23 FY22 Actual FY23 Forecast Forecast FY 2023 net sales
Slide 21: Q&A
Q&A Cheri Beranek Dan Herzog Kevin Morgan PRESIDENT & CEO CHIEF FINANCIAL OFFICER CHIEF MARKETING OFFICER 21
Slide 22: Appendix: Net Sales by Market
Appendix Net Sales by Market Trailing 8 Quarters Through March 31, 2023 (in thousands) Q2 23 Q1 23 Q4 22 Q3 22 Q2 22 Q1 22 Q4 21 Q3 21 Market 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 International $13,138 $10,204 $9,345 $2,515 $1,462 $1,994 $3,542 $2,929 Lega
Slide 23: Contact Us
Contact Us COMPANY CONTACT: Cheri Beranek President & CEO Clearfield, Inc. IR@seeclearfield.com INVESTOR RELATIONS: The Blueshirt Group Greg McNiff T: 773-485-7191 clearfield@blueshirtgroup.com 23