Clearfield Stock

Clearfield, Inc., together with its subsidiaries, designs, manufactures and distributes fiber protection, fiber management and fiber delivery solutions to enable rapid and cost-effective fiber-fed deployment throughout the broadband service provider space primarily across North America.

The company's fiber to anywhere platform serves the unique requirements of Community Broadband customers (Tier 2 and 3 telco carriers, utilities, municipalities, and alternative carriers), Multiple System Operators (cable television), Large Regional Service Providers (ILEC operating a multi-state network with more than 500,000 subscribers), National Carriers (wireline/wireless national telco carriers (Tier 1)), and International customers (primarily Europe, Canada, Mexico, and Caribbean Markets).

In 2022, the company launched a transformative multi-year strategy plan called LEAP. To leap means jumping higher, further and with greater force. The LEAP plan is the company's roadmap to how it intends to scale as a company to seize the opportunity Clearfield was built to achieve. There are four tenets in the company's LEAP plan, one for each letter.

Segments

The company operates through two segments, the Clearfield and the Nestor Cables.

Clearfield

Clearfield focuses on providing fiber management, fiber protection, and fiber delivery products that accelerate the turn-up of fiber-based networks in residential homes, businesses, and network infrastructure in the wireline and wireless access network. The company offers a broad portfolio of fiber products that allow service providers to build fiber networks faster, meet service delivery demands, and align build costs with take rates.

Clearfield's products allow its customers to connect twice as many homes in their Fiber to the Home (FTTH) builds by using fewer resources in less time. The company's products speed up the time to revenue for its service provider customers in Multiple Dwelling Units (MDUs) and Multiple Tenant Units (MTUs) by reducing the amount of labor and materials needed to provide gigabit service. The company's products help make business services more profitable through faster building access, easier reconfiguration, and quicker services turn-up. Finally, Clearfield is removing barriers to wireless 4G/5G deployments in backhaul from the tower to the cloud and fiber fronthaul from the tower to the antenna at the cell site through better fiber management, test access, and fiber protection.

Nestor Cables

As of July 26, 2022, Clearfield, through its newly created Finnish subsidiary, Clearfield Finland Oy, acquired Nestor Cables. Nestor Cables is based in Oulu, Finland, with operations in Estonia through its wholly owned subsidiary, Nestor Cables Baltics OÜ. Nestor Cables manufactures fiber optic and copper telecommunication cables and equipment which it distributes to telecommunication operators, network owners, electric companies, building contractors, and industrial companies.

Products

The company's product strategy involves analyzing the broadband communications industry environment and technology, with a particular focus on simplifying its customers' business, and developing innovative, high-quality products utilizing modular designs wherever possible. The company is committed to make fiber deployment success easier by providing craft-friendly, pre-connectorized plug-and-play fiber assemblies, fiber management and pathway products to speed deployments and provide the lowest total cost of ownership for its customer's networks.

Throughout the fiber deployment journey from the Inside Plant (ISP) to the Outside Plant (OSP), into the Access Network and all the way to the fiber connection at the home, the company's labor lite solutions solve service provider fiber network design and installation challenges.

Product development for the company's product line program has mainly been conducted internally. Some of the company's products offered are described below:

FieldSmart is a series of panels, cabinets, wall boxes and other enclosures that provide a consistent design from the inside plant of the telco's central office or cable television's head-end, all the way through the outside plant to the access network to within the home or business. The Clearview Cassette is the core building block of every product within the FieldSmart fiber management system. Clearview configuration options support tool-less installation, in-cassette buffer tube/ribbon slack storage as well as front access-only designs. The small footprint reduces real estate costs and improves density without compromising critical design elements of access, bend-radius protection, physical fiber protection and route path diversity. All types of fiber cable construction can be integrated within the cassette to support all patch only, patch and splice (in-cassette splicing), passive optical component hardware and plug-and-play scenarios.

WaveSmart optical components are integrated for signal coupling, splitting, termination, multiplexing, demultiplexing and attenuation for a seamless integration within the company's fiber management platform.

Active Cabinets using the company's FiberFlex product lines feature either fully integrated, fully engineered cabinets equipped with specific active electronics configurations or universal cabinets ready for mounting other electronic equipment. This product line features Clearfield's fiber management solutions housing the Clearview Cassette. The FieldSmart FiberFlex product line of outdoor active cabinets feature multiple sizes for universal configurations of electronic equipment.

CraftSmart FiberFirst pedestals are designed to support fiber-only networks. Purpose-built to support a wide variety of service network designs, the pedestal eliminates the need for multiple, specialty pedestals and can support a passive optical network (PON) option, a splice-only option, or an access terminal option. The FiberFirst Pedestal Access Terminal options provide a cable management and mounting bracket kit that supports the deployment of all Clearfield access terminals.

Access Terminals from Clearfield are designed to ensure every service provider has the freedom of choice to match drop cable configuration and technology with the needs of their environment and first-cost priorities. The patented SeeChange terminal and hardened connector system lets the operator push fiber deeper in the neighborhood using a completely plug-and-play approach. The YOURx access terminals also offer flexibility with cable mid-span and internal splicing options. Clearfield access terminals can be deployed in a variety of locations, including pedestal, vault, flowerpot, pole-mount, smart-pole, or strand mounted options.

FieldShield platform is a patented fiber pathway and protection method aimed at reducing the cost of broadband deployment. The company's FieldShield fiber drop cable assemblies are designed to connect the fiber access point (hand hole, pedestal or aerial) to the optical network terminal (ONT), on the home, in a fiber to the home (FTTH) network. FieldShield starts with a ruggedized microduct designed to support all aerial, direct bury, and inside plant last mile needs. FieldShield microduct is strong enough to be placed using traditional methods of boring and plowing, leveraging existing conduit placement equipment, as well as newer, less disruptive technologies, such as micro trenching or saw cutting.

Fiber Assemblies - Clearfield manufactures high quality fiber assemblies with an industry-standard or customer-specified configuration. In addition, Clearfield's engineering services team works alongside the engineering design departments of the company's original equipment manufacturer (OEM) customers to design and manufacture custom solutions for both in-the-box, as well as network connectivity assemblies specific to that customer's product line.

Fiber Optic Cables manufactured by Nestor Cables include a comprehensive range of optical fiber cables that offer dependable solutions for various installation conditions and special requirements, including direct buried cables, duct cables, microduct cables, indoor/outdoor cables, aerial cables and submarine cable.

Copper Cables manufactured by Nestor cables include copper conducted instrumentation and automation cables, as well as central and signaling cables Nestor also manufactures copper cable for telecommunications networks.

Nestor Optimus product family is a complete solution which includes all needed products - cables, microducts, microduct accessories and tools - for construction of microduct networks which are easily expandable, suitable for changing and growing urban and suburban areas, and enables the use of lighter installation techniques, which reduces construction costs and interference during installation.

NesCon Connectivity Products is a product family by Nestor Cables that includes essential installation and connection accessories for fiber optic networks, all of which are compatible with Nestor Cable's optical fiber cables.

Markets and Customers

The company's products are sold across broadband service providers, which it categorizes as National Carrier (wireline/wireless national telco carriers (Tier 1)), Community Broadband (Tier 2 and 3 telco carriers, utilities, municipalities, and alternative carriers), Large Regional Service Providers (ILEC operating a multi-state network with more than 500,000 subscribers), Multiple System Operators (cable television), International (primarily Europe, Central/Latin America and Canada), and Legacy build-to-print copper and fiber assemblies (primarily contract manufacturing). Nestor's products are sold to telecommunication wholesalers and telecommunication operators, primarily in Europe.

The company's products are sold direct to customers through its sales force, as well as through authorized distributors. In addition, the company uses manufacturing sales representatives and sales agents for customer and geography specific needs.

The company considers the primary markets for its products to be as follows:

FTTP

Fiber to the Premise (also called Fiber to the Home) is a means of delivering the highest possible level of bandwidth directly to the user. The company's sales and marketing efforts have principally been focused on the U.S., with additional efforts in Canada and Central/Latin America. The company intends to leverage its Nestor platform to cross sell connectivity products into Europe.

FTTB

Fiber to the Business is principally for Multiple System Operators (cable television) and wireline/wireless national telco carriers (Tier 1) to penetrate the business marketplace.

FTT-Cell site

Fiber to the Cell site is the trend in which wireless service providers enhance their coverage for bandwidth. The majority of these cell sites are served by fiber backhaul and fronthaul.

Build to Print

In addition to a proprietary product line designed for the broadband service provider marketplace, Clearfield provides contract manufacturing services for original equipment manufacturers requiring copper and fiber cable assemblies built to their specification.

Competition

Competitors to the FieldSmart product lines include, but are not limited to, products offered by Corning Cabling Systems, Inc., OFS (Furukawa Electric North America, Inc.), AFL Telecommunications (a subsidiary of Fujikura Ltd.), Fujikura Ltd., Nokia, Hextronics Group and CommScope, Inc. Competitors to the CraftSmart and FiberFlex active cabinet product lines include products offered by Emerson Network Power, a subsidiary of Vertiv Co., and Charles Industries, Ltd., a subsidiary of Amphenol. Competitors to FieldShield product lines include products offered by PPC Broadband, a subsidiary of Belden, Inc and Emtelle UK Limited.

Major Customers and Financial Information about Geographic Areas

For the fiscal year ended September 30, 2023, the company had one customer that consists of 16% of net sales. This customer is a distributor.

As of September 30, 2023, three customers accounted for a combined 40% of accounts receivable. These customers are all distributors.

The company allocates sales from external customers to geographic areas based on the location to which the product is transported. Sales outside the United States are principally to customers in Canada, as well as countries in the Caribbean, Europe and Central and South America.

Patents and Trademarks

As of September 30, 2023, Clearfield had 47 patents granted and multiple patent applications pending both inside and outside the United States. These patents begin to expire in 2028. The company has also developed and are using multiple trademarks and logos to market and promote its products.

Seasonality

The company is affected by the seasonal trends in the industries it serves. The company typically experiences sequentially lower sales in its first and second fiscal year quarters, primarily due to customer budget cycles, deployment schedules of outdoor products, some customer geographical concentrations, as well as standard vacation and holiday calendars. Sales have usually reached a seasonal peak in the company's third and fourth fiscal quarters.

History

The company, a Minnesota corporation, was founded in 1979. It was formerly known as APA Enterprises, Inc. and changed its name to Clearfield, Inc. in 2008.