CLFD - Earnings call 4 2023 | Clearfield, Inc.

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Operator

Good day and welcome to Clearfield's Fiscal Fourth Quarter and Full Year 2023 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.I would now like to turn the conference over to Greg McNiff, Investor Relations for Clearfield. Please go ahead.

Greg McNiff

Thank you.

Joining me on the call today are Cheri Beranek, Clearfield's President and CEO; Dan Herzog, Clearfield's CFO; and Kevin Morgan, Clearfield's CMO.As a reminder, the slides in this presentation are controlled by you, the listener. the the through remarks. presents forward advance presentation speaker as their Please of note management and future performance call, during the company. be financial Please this regarding will that making remarks future the events statements These Private the Reform for remarks Litigation constitute purposes the provisions Securities safe of Act. of harbor forward-looking no that the important from to These in those law. obligation uncertainties risks the forward-looking company to results except actual forward-looking by to subject cause statements is also expressed that note to undertakes are statements.It statements required such and could differ update materially as The cause and in presentation, company cautions you today's those to materially contained consider earnings risk release, on factors this actual that to in could press statements conference results the call. forward-looking from differ with filings Exchange and risks. The risk factors Form section on in Clearfield's description Securities filing its Commission the of subsequent most provide XX-K XX-Q a recent these and Form on are I turn like to that, also of and They Cheri presentation.With over President summarized the earnings would Clearfield's CEO, call Slide the X to Beranek. Cheri?

Cheryl Beranek

and everyone, joining fourth discuss results year thank for afternoon, Good to XXXX. fiscal and full for quarter us Clearfield's the today you

We new also time has is an intend XX last reflection, business on pendulum on extreme. of months, been for reflect as the year and I a trends. market the to and current market our swings provide A update our

pace and managing for in their fiscal reduction importantly, high-speed quarter Total that higher including CapEx industry with rates. throughout includes and year the results we for more on disbursement first, our financial funding will detail the Dan Cables. NTIA. drafting program, known guidelines to quarter the for reflect for fourth the million million, Equity of and an demand commentary this Nestor Administration, the which update Telecommunications $XX.X and quarter interest the their want I shortly.But provided were discuss the Currently, programs, in of as consistent reduction are Yet in state one budget pace, states broadband.Our $XX.X the National proposals is forecasting end-user necessary customers fiscal into industry. the need end fiber no from the put by a period and fiscal the current from the have the and the BEAD of equipment possible.In As the inventory the pandemic if been deployment their making as deploy out expect has the deployment of the the many goals a reduce does cost building expansion emerging have the reasons the on cite addition insatiable operators pandemic are the of numerous and network on They efficient Yet seemed our to constraints reduce reduce the to past obstacles levels to for of is coming providers across that we labor reporting toward to torrid year this service own navigating service focused materials reality hard, difficulty challenging overbuild some of started they market, as down XXXX, demand industry in lens through and year. Deployment working the results as process the as Broadband are net the XXXX eased.Unfortunately, ensuring best, specifically their the had XXXX. provider to contribution Clearfield fiber to analysts Access industry they and sales socioeconomic Information slow the a government extend and what and provide BEAD. fourth

to we in we the fiscal and believe contribution year-end revenue. in We initial revenue of by to part to a which be point year make 'XX, related half for will our these to expect recognize first second see year. Based assumptions, announcements of provider the XXXX.However, expect on BEAD finalized BEAD in meaningful late programs is sometime calendar with demand increased proposals award these next service the

our driving over higher the to BEAD cost rural the our funding this a and and fiscal will with market. winter will to environments equate per market align impacting revenue Clearfield months. long overhang larger half passing expect in that BEAD longer be and ongoing undergoes to first the we expected with opportunity per typically a believe remain home connections term. fiber connected underserved for the target on broadband available industry, expand which unserved between the connections a expect inventory longer as the coupled community Based slowdown total XXXX in cycle, challenging.Additionally, of homes We We these industry

and impacted next For discuss these comparisons revenue the reasons, these we strategy returns. significantly quarters our to now Accordingly, results year-over-year expect demand we to for dynamics.I growth several by revenue expect be soften. when to seasonally want

to levels, demand required to pain First, of designing while hardware. our significant customers' are reduce adjust the continue and address committed products amount labor points to our to we to we install skilled most

makes and and to the providers our possible. and recently than announced labor ideal rural generating reminder, our an a the to into all-in-one gating service economically rural deployment smaller service FieldSmart FieldSmart the areas.Another provide X-inch million variant, cabinet as and and reduce XXXX fiber, achieving secure providers more to are FiberFlex tailored of recently to projects. FiberFirst for products These active up our active capable size of with outdoor also active approximately power, a Pedestal. is After deploy total new the end-to-end of single $X looking rural revenue deploy FiberFirst into for solutions. with any Pedestal regional environment, ideal service a lower of is Both version from areas total a active success goal in for Both factor the provider deployment.We the design the a time CraftSmart are new As X and cost the deployment. reflect CraftSmart pedestals and its product, announced revenue bill a we looking as in toward XX-inch in access is cabinet step smaller and initial broadband integrating FiberFlex another efficiently fit ground XX% FiberFirst of designed which customers of pedestal, Pedestal cabinet, cost providing It's point ideal equipment. today FiberFlex

We are pedestal XXXX.For compliant welcome are market year other working be Kevin? to by the a Chief Morgan, additional offerings long-term calendar what opportunity, our product ensure seeing the these in BABA significant insight will would we Marketing to and and some end in Kevin the call. all Officer, of like I to

Kevin Morgan

you, Thank Cheri.

us of us. historic in now buildout behind with ahead than are middle more of We a the fiber

know, territories. BEAD with underway is initial As the $XX.X to many of you and program the billion states now disbursements

because forecasts with the boost in network the bring to growth company.Coming delays driving slide building federal fiber walk the the product at homes Cheri this back revenue and development underserved fourth a against value up I'd XXXX Clearfield is long-term the buildout needed revenue homes This focused as our areas than has their pass will additional our on X-year well to years service internal will funding industry hard believe results CFO, expectation is next million call proposition the to passed because rural remains providers like additional that same X, the the the over helping and as indicate internet amount of is Clearfield's that million in to improve passed market both market will total products and Clearfield's The to to our financial time XX to grown on network. through approach builds. may performance, for a connect in unserved As industry period. why for next Clearfield's associated we homes.As initiatives.Our of the variability who will as see deploy awards faster pace Slide market. and of us a opportunity has in XX These XXXX. time performance fiber periods homes X to illustrated now the U.S. the Clearfield's noted, work. revenue fiber Herzog, from company's access RVA skill on full the set illustrates to high-speed fiber reduce to over focus year fiscal to X-year with in to that rewarded quarter and programs Dan extend beyond the market over period developing

Daniel Herzog

decrease afternoon, at Slide million, net XXXX from in over $XX.X sales in same XXXX Nestor quarter fiscal were in organic and primarily and $XX our sequential the revenue decrease of $XX.X from Consolidated due fourth year-ago detail. of million the XX% fourth and $XX.X in year period. figure seasonality. you, to Thank million results This look Cables Clearfield good net turn quarter for Please Cables.The to a to Nestor Kevin, contribution is more previous the fiscal X full million includes sales a everyone. quarter

on at in Nestor XXXX. can the backlog equipment and to higher-margin investing to products dynamics Order and XXXX, XX, described was market.The year-over-year sales decrease XXXX, million focused million efficient strong peers several $XX.X exhibited in declined from on on costs due remain September ongoing $XX.X to more last reducing that and specialty and the marketplace connectivity our over produce margins $XXX.X growth, XX, have Clearfield Nestor European and While we net reported Cheri XX, improving on Nestor in year-over-year earlier segment industry our months. that from the cables cables total higher-margin manufacturing in introducing plug-and-play Clearfield sell top-line by June million the September XX%

noted, align with lead open their with collaborate are our than deployment weeks now to We Cheri times X product continue across to orders our less schedules.As customers lines. most their

more as become regional We normally calendar have to to our on the outlook a for providers visibility basis. quarter be an fulfilled received. MSO we of expect from scheduled they sales backlog year-end, most don't indicator are who our of future and Due within will year the XXXX customers timing less book to orders service yet the

broadband, QX, in work customers our our net to to generated $XX.X we by fiscal million monitor X, markets. sales quarter and to same community demand.Turning from Slide Sales will continue the In sales broadband period now their primary market, review comprised XX% last XX% inventory year. We levels long-term to approximately community the with of of net XXXX. in key our net fourth sales down closely I our of

our the accounted service compared quarter.For our MSO of were year XXXX and prior market in decreased this XXX,XXX Net fiscal providers were year.Our quarter regional the for sales down national year with regional of for declined approximately XX% our community year down by of as market the quarter in to or million, the fourth year. year For the sales broadband fourth the in fiscal net quarter versus the in we net fourth the disclose year was fourth $XXX segment XX% fourth sales sales our and carrier revenue the XX% providers market quarter our subscribers compared prior our net to the broken fiscal year. fourth and net down in sales, $X.X fiscal prior total of the customer versus to market and of from XXXX, of out net sales which compared Net a down fourth fiscal XX% to comprising which carrier were above, from X% prior this our in totaled $XXX,XXX footprints quarter. year comprised broadband as national fiscal as quarter XXXX, this sales sales in sales was market XX% fiscal refer this fourth providers. in total prior quarter. in fourth for large the service quarter XX% XX% versus prior XXXX fiscal X% fiscal XX% the large as Net Net for community to business fiscal smaller declined of approximately million, we ILECs from and year.As traditional reminder, have our previous approximately

and year XXXX contributed in year this due the international for the were Net of segment sales fourth million quarter of XXXX comprised fiscal net fiscal Nestor fiscal last XXX% sales in quarter XXXX. XX% million acquisition total period of $XX.X increased to which were Finally, in Cables, up fourth XX% same our market the and sales net fourth $XX.X quarter. toward in of the compared to the

same discussed year. to and fiscal year-over-year, $XXX to XXXX, was total of net X, the consolidated million Slide on of July from a XXXX quarter The sales in XXXX.Turning from was Slide to million Nestor's our to margin XX% the Nestor were full we declined the sales down profit XX.X% gross $XXX the middle in acquired fiscal sales net due the X% dynamics quarter. fiscal in the XXXX. of for decrease XX.X% contribution net was in for net sales year-ago detailed $XX $XXX of decreased fourth organic Clearfield million we year in which reminder, than a net As industry sales earlier.As fiscal million, quarter little fourth less XX,

due overhead XXXX. demand continues of profit our continues margin year capacity slide, to fiscal levels production to market manufacturing impacted net to margin declined conditions.Turning for gross and to in adjust XXXX Our next from align XX.X% the by to of company facilities full lower net sales in its of sales be to The fiscal demand. unabsorbed current XX.X% gross to the

highlighted, increases. in the XXXX, in should half we to expect half of gross inventory an by fiscal impact we the XXXX which be seasonality, normal to uptick second continued performance.As capacity As lead margin fiscal we Cheri also enter in first improvement anticipate the well demand, revenue of the build season digestion as gross in our as utilization as an will margin impacted which

long-term well, while ensuring relationships. the our We work as of to also will continue preservation discipline price customer uphold to

we quarter. our customers.Now million, fourth costs lower in quarter million performance-based reduced well last decrease of address turn from Slide which related forward, for remain decreased professional year's Operating acquisition how will in to accruals to the year-ago result Nestor expenses with thoughtful same as and these that were fees of is $XX.X year-over-year fourth Cables please compensation XX. Moving we legal the quarter. $XX.X This occurred the primarily the as in

$XX expenses for down fiscal of to on operating fiscal As same from sales, net slightly detailed sales were million, year for XXXX. XXXX $XX operating next XX%, lower volumes.As from year-ago period fourth quarter million percentage the were full XX% a the in expenses in slide, the year the up due

net were XX%, fiscal of in fiscal operating percentage from unchanged XXXX. a expenses As sales, for XXXX XX% year

decreased in variable of align the ensure year-ago return XXXX. to that We to same continue the period quarter income investment down is million from net strong.Turning and was our activities fourth $XX third from Slide our and monitor quarter million our million the in XX, sales marketing to and costs $X.X in on $X.X fiscal

year-ago percentage a XX% the to million fourth the net fiscal net third from XXXX.Turning full of $XX.X slide, of next down for and income XXXX. XXXX from fiscal for net down decreased year $XX.X period As the same from was the income sales, million X%, XX% in in fiscal quarter X% quarter in to

sheet XXXX.As from mainly investments cash, As manufacturing our a in illustrated million our capital percentage was XX% expenditures just and net for million X% remains operations. sales, $XXX income fiscal We of Slide net long-term short-term of $X the of on down to fiscal XX, XXXX year quarter, balance had and support in strong with debt. $X.X million in

with balance Our demand industry the stocking Reflecting discussed. million inventory in to to decreased align million quarter the in $XX fourth lower we the from quarter. reduced by dynamics levels June have driven $XXX

we visibility at continue XXXX.Please to XX. in fiscal we've expect reasons We quarterly balance to the Slide level time. inventory annual discussed to turn Due limited off to guidance than this will to related rather provide

fiscal of range in to million a $XX of $XX net million. quarter sales the first expect XXXX be We to

loss completed generate the that per We range of may $X.XX to next does guidance thereafter This season. net beyond first in we share of share into providing to the are impact seasonality any normal in the a the not range potential build reflect expect quarter, repurchases the would $X.XX. we expect not continue to quarter.While be

our our my reflects undervalued conviction effectively potential to to our believe compete that clear fourth back sheet our long-term as Board's of well Cheri. call product announcing business full the The Directors $XX authorization drive enhance of balance opportunities we our positions and in leaving work as our $XX million concludes We that the buyback is for the and $XX appreciate support current the to strategic to are opportunity. of now ensures has relative to a commitment buyback move and strength proactive balance Likewise, that share available positioned XXXX. company.That authorization our approximately are to our the and turn strong quarter over in share manage our price remarks our million, also on prepared pursue strong strong portfolio. strategic for will for to cash us enduring the opportunities repurchases. fiscal customer This value.I million Our market we long increased larger Board is our from and shareholder investors increase continue part to we year for to term.We

Cheryl Beranek

the Thanks update, that term. dynamics Dan. balance affecting is financial for to over weather position our in a the market sheet, good the With strong the company short are

which We are approach on meet strategic strategic provide plan, taking long-term update to our like we product capitalize how LEAP industry ahead.Turning we a demand Slide to significant significant offerings. the LEAP. our our roadmap new would intention, positioning mentioned an to the for begins demand I recover. to intend company now XX, multi-year when is previously on with ahead the labeled I have to opportunities

a Now emphasize connectivity intend we our especially expertise cross-sell Europe, leverage recruiting we additional Nestor in we to markets, products are pursuing.First, platform to in few actively where initiatives I'd like new Europe. that are into to

investing We systems. ongoing business to updating profit gross unify connectivity efficiency our and improve.And reduction systems microduct our manufacturing.Second, our are third, in operational our operational and Estonia to conditions improve continue company we to to and ERP initiatives are drive once improve for facilities also cost

new year the demonstrated proud has pandemic.Since this while Clearfield that power, under-absorbed the infrastructure delivering substantial the negatively our in affect scale, inception, consistent investments achieve few grown that will am over As beginning said comes of earnings overhead organization reflections quarters. of of To profitability. resulting has made our past. strategically today, next of Clearfield our I the Clearfield the execution at the with call since a the I start many

absolute market that as to returns that, the future open will normalized pace.And remain call growth Clearfield and with questions. deliver that to in demand stands the we your our ready its fiber is to confident However, we on

Operator

Jason [Operator comes with first Schmidt question Instructions] Lake Your from Street.

Jaeson Schmidt

seasonal of first traditionally the years given in couple of quarter point? for trough of the the pattern, Understanding about sort you Just thrown think half the softness just kind year? is low us should remind how we the potentially of the the you've weather, can this being December of normal December seasonality if window, and sort what due kind past to seen of the getting out year

Cheryl Beranek

we're holidays in first the for and actually, in usually that slow out spring. back quarter season, and budget the down Historically, strong the then start then that are come for and similar building second pretty and and October we the still up

in So weather the quickly much isn't spring might in but second how stronger second influence be could bigger the get issue first quarter we than first. quarter, how it's quarter to that

Jaeson Schmidt

Okay. point? facility have over this Mexico product all the transitioned And you lines at then, Nestor your to

Cheryl Beranek

case-by-case into producing is kind are we the inventory of Yes, basis. X in it of facility. on a Mexican And or but the of movement we're strategic of inventory Mexican not transferred we Part products that fibers to manufacturing that the plant. that some can in the have X continues would that we that do have that related we all so really yet

being done conditions inventory as So it's dictate.

Jaeson Schmidt

And through we queue. about then the OpEx in just the and took how step trending fiscal last think 'XX? should into one Dan, from quarter. back back jump a I'll me OpEx September

Daniel Herzog

a OpEx, place. look of this of little were And you that took to bit our is QX in at bit there. past Yes, our quarter so lower, at obviously, benefit if but this you a some we year, had little savings QX, if QX have did look a historical

If QX, somewhere going steady from closer you going to that. it's to be forward on there. pretty probably rate it's our basis, run a And look probably at

Operator

Capital Searle with Partners. question, Scott Next ROTH

Scott Searle

quarter, categories fiscal Dan, start you pretty obviously start I in in in up the seeing that little it to your would margins, of there, outlook color December expect if low, quarters goes but was a Cheri, gross the as more you relates that that the this gross in as the that's think provide fourth third, terms specific then bit I back customers to could weakness. you're the pick to December of margins, apologize take but wondering you second, I where in the and earlier, covered was 'XX? a to quickly utilization guidance And utilization embedding to hit, quarter. does come How it the

Daniel Herzog

the Yes, us. really capacity gross in has to right are right, away there I'll margin issues definite a yes, go and volume some that on that, volume huge the you're effect

better low. slightly expect it up we QX be and that. really then to And So start would in pick QX. potentially to we is QX than

a labor -- so may QX, better stronger. that starts much to be And We'd get and we QX coverage fixed we in But making exit at much it excess QX may exit capacity, Scott. capacity, up overhead and more.

Scott Searle

Okay.

Cheryl Beranek

secondarily, from in based have seen the weakness, plans upon step to Yes, regards taken hit balance a taking The they've of based a where large and back back regionals. that And to as-- in sheet regionals of realigning pulling their we're back large availability the numbers. a their you've and seeing combination upon step another numbers at carrier then some it's kind on previous reductions CapEx

Daniel Herzog

CapEx, yes.

Cheryl Beranek

come bigger plans more the financial issue more eventually, to large as guys, large But not against a ACAM there be say play, more stronger, weakness. particular kind money against the it a is plans -- going underway, broadband, any a to and is take fighting large buildup that's rhythm they're a of order. normalized a whether Today, a dollars carrier, players, MSOs cadence. their came. out seems market. the of get or where kind as and be the they back the see any prudent. migratory little But versus going large and And to their in community the more normalized you, the I for fighting and I larger financial the temporary they're of community guys first. which no race. the figure where today who to with the ago inventory issue. would the the carriers a BEAD regional, to where CapEx, thank they're -- get the the we'll carrier, it's to a go big The regionals going result, year broadband of for and dollars all an as really It as Their year And race all say cadence of uncertainty longer difference of and ago seems of was practical because was is less

Scott Searle

here run looking what of when versus a at is working customers? maybe it guess you're Cheri, your that into deployments as is through absorption sounds normalized the factoring follow-up, ACAM that, rate, inventory I at just part Ultimately, calculus terms like figure And I think would they that's terms that as well is BEAD? of But good a of customers delays. or in a pausing thing here out as BEAD. in is culprit primary ACAM as

Cheryl Beranek

Right. definitely community broadband. in the It smaller carrier, applies in so

is come to either-or to it ensure often still that.Back an as the engineering to that mean, come there's have with what peers programs As the we with some an in government. marketplace can they the of think engineering cadence, provides billion a mistake. thing to to I calls making don't see carefully going design the expansion going more to enough us. fantastic market, normalized need that about a very -- a first calendar And outlined to BEAD for But is the we do their X originally design really you closely BEAD going see closer as allow work a in do what to into in the is And play of it's continuation more work but and BEAD the they're closely watch as was get And another few in it cut bullish as -- or our decision ACAM off time our I that these shovel, most to you from who decision. be those weeks, we what for service our the time in thought by in last that than X XX% time until was companies situations, year. make and the from They're world, providers is it our do very to $XX companies. short extremely months, in to a almost into result,

so 'XX strong next really activity and for of fiber And into the companies how is watch of those show be 'XX second I engineering to to year construction. going half would the

Operator

Ryan with question, Needham Koontz & Company. Next

Ryan Koontz

comment longer You you. the the loops for a TAM about with market being made market a rural higher

opposed on I TAM bigger actual Is that that the expand itself per having larger. need and the connectivity. of why cable lower fewer you Maybe because as on homes fiber you unit as to just spend the can connectivity think is of number is on homes? more a passed a on impact density to

Cheryl Beranek

No, indicated, actual you our most cable cost fiber, the goes itself. in the as home, we back the it percentage -- of to actually largest with the that of the association a connecting fiber is

drop cable heavily going miles, XXX XXX the of And influences mile cost is home is so it box, terminal if be. to from your your feet yes, your box a versus terminal what from the

that further things off there Again, drop being in feeding for both opportunity and the you might the see of out other are, cable those and strung going so we're connecting to that market the be historically And think larger.In to every homes. to devices. with to to houses with has is to is company general, end, which market of is last why to more range available we deploying. a working another that strongly multiple into is sometimes total one individual each order we'll terminals And Clearfield of pretty with -- a the used been terminal overlooked as It's investing -- I get that's come that cabinet be able which going going passing be with low, we're much came marketplace associated knowledge a in year vault pedestals. we're homes, out increase available not the during out this our Clearfield is to reason that is total gets common

additional to more saw we field have of be revenue to last presence we initiative year, a course trials the opportunities spring, and And next represent you get of so year for believe over this strong market using And change is additional TAM the Clearfield beyond. equipment. connected first announced undergoing homes will using our and which which very fee about a being

Ryan Koontz

quick market. comments there. follow-up any a a little pauses numbers the there just can programs? between, the that's Maybe depressed you in architecture, difference you inventory on issues? any about cable that been changes seeing similar Is Are Any make cable? obviously And broad have in

Cheryl Beranek

those the architectures. no to To in being think to build to individuals, is, Home, companies commitment Fiber for those who new and continue committed market The cable committed that been and the individual they are there's I change

remained, who change, those I the seen and taking have but areas collapses a for involved a have they're deeper their number and been DOCSIS fiber have a passive who For of positions, space. hub larger into companies, what and with companies to retained a haven't of into result, the is as we higher to need that in networks their serve cabinets active types which other both commitment

Operator

Mesniaeff with Next Greg question, WestPark.

Greg Mesniaeff

earlier to do the mentioned that be expect you have times and lead you shrunk going prepared of And pricing? impacted forward has it than weeks business less How how in business. will your the majority X and impact that that remarks and ship will book

Cheryl Beranek

should we assure very industry. pandemic best that always a with the See our time equipment in of needed some times of what they're are a that customer that on that the align time standpoint, to customers are at from ship ship. providers in service regard was it. the to in we manufacturer think in market always And discipline the ensure been See, we and be commanding, Clearfield's closely inappropriate pressure lead the pricing there's I the we that they business, price have the could strongest marketplace but we pricing, mean, in good sustainable, not is that book I they're could the oversupply. a price tempted be the But buyers, to businesses had not really will in also worked fact, we before And general, that there pricing with position. the won't we that call in lose toward working we will on share follow. in There is

Greg Mesniaeff

will be program some like much companion as impact how Is a Or in impact? Great. program And BEAD question, to pay, things be that pretty as it that you do changes to there unfolds, willingness that? expect no just to going to the pricing?

Cheryl Beranek

is the BEAD definition materials. that that U.S. there's market, of the to to ifs, we costs as that, same bring which no ands, back no labor build, into in it's the buts BABA U.S. the the cost I any it's that such is product be going fiber if that by the or more way the lot the termination in just connectivity, there's of -- America, intensive of increase mean, initiative, takes of labor, labor program, about Build a amount it There'll

selling we meet when have talking X different And the labor of most SKUs in we'll costs, trade a my lower-cost and one X at a the fact market, America in have been of different so product, show, and one that prices. made about have made peers, just X same they'll

Operator

from [Operator Tim Instructions] Next question comes Capital Markets. Savageaux Northland with

Timothy Savageaux

your typically. guidance? what's First are for revenue. question some expecting international there, was or in on I seasonality out And implied international know you there's What QX of

Cheryl Beranek

Finland in very and dark. cold It's

is European for business our of XX% percentage, in good a Finland. So

slightly So the less than-- is quarter guidance first for

Daniel Herzog

$X say or About to to Yes, range in $X $X, I'd right roughly yes. $X now. that $X to $X

Timothy Savageaux

a percentage dollars? absolute â€“ Is or dollar that an

Daniel Herzog

Absolute dollar.

Timothy Savageaux

helpful. that's That's No, of kind you. And super where had sorry. Yes. I

in And mean, at was up that, broadband doesn't note mean, have looking I community your So much decline, September. go is -- X. to the given magnitude to the I regional farther of interesting it sequentially already seems it's to

kind at maybe, primary mean, but to in front pretty is know, expect it I broadband to don't X. in want the go much So of the driver I I looking community pausing of or BEAD, make assume to, Because of that to that that regard. you I be know I'm I right. to no, unless whether just has And inventory sure decline

Cheryl Beranek

go -- sorry, yes, I'm a ahead. there's Yes,

Timothy Savageaux

No, please.

Cheryl Beranek

one absolutely can of there's from to there, important is you're that is broadband the one quarter in any note of I community the but the think I one Yes, think, on the at a size things next looking from broadband customer significantly next. and community to mix that to pie change

at business look as a trend to And quarter. the so a important single as not line overall it's and

of Dakotas I tends so, community large right, months, ILECs, picture. X if the are last you to mean, of put, months community the Texas. most broadband and a much the more space the And better into a if get it's we we of the X carrier the broadband put and between in kind be regional standpoint -- last in then space

space much I more weather who our indicate much is seasonal are coast. it affects that providers trend certainly, But a more standpoint. market we of some more wouldn't than based. based trend see so I And the than market cable on might it think, from It's,

Timothy Savageaux

the it in gross next like or at maybe it million expect And into in mid-teens or look sense. looks revenue is margins kind into a sounds down, makes the level seems calendar like gross low reasonable at? to quarter the that minus, depending of of it somewhere side margins with dipping the are side the $XX seasonality, year. plus like how terms here range, that in under-absorption, flip your And then but positive second might heading you to quarter breakeven on are the of of Yes,

Daniel Herzog

around the $XX I'd million put somewhere Yes, that mark.

product that's too Some but could than like not lower -- pricing everything so. of and and you're your it far million slightly off. will be $XX mix be that, It

Timothy Savageaux

it. Got

or came little be warms in funding. through, warming we're behind seasonality? As I having by And bit that a seems process the this and proposals like unlocking we initial commented pretty some BEAD have do the late, that should it it is but ] already, when this also the the real-time in you much [ think states submitted to position, have process you with go BEAD sorry up, may a been on up, happening

Cheryl Beranek

initiatives, dollars start case, get -- behind shovel-ready regard engineering I think will BEAD like in companies to I I the their seasonality. engineering and money, we'll think be the to is Because but engineering next best talked months X to at for we're the about shovel-ready see behind summer. we're going start

of So BEAD over the for numbers and a come warming behind it'll should help us winter. and the that the seasonal be course then us, then

come to I a way from just just leading you're it. a the generalized timing. way, into of in the play. probably points on be the in not so messy, a bad marketplace result, to see a difficult absolutely to It's many data going of some and matter will because be But going have think messy is As recovery recovery to the in which competing going indicators, it's

Operator

the over turn comments. call for Cheri I to will closing now

Cheryl Beranek

opportunity speak the today. you amazing in Thank with an to time This for is you the marketplace.

As I This talked has insatiable appeared over swing to the in today, been, prudent, disciplined about is and demand in that we are last to more which execution. company our a pragmatic, unpredictable. I happen. years not earlier, demand leader pendulum outlook, is strategic could a But make Clearfield measured much from and more we XX that and to what is think, be the looking

we and in we behind rural our in is importantly, Clearfield the the the than us, fulfill. there to and market, have us of front and is outlined market, designed market, in that market which As front market in more materials, place us is built was the more the underserved of

we And so the future. forward we we also to look value and tenacious, in being are a patient, standpoint shareholder are but in of delivering

Operator

today's teleconference. concludes This

thank at you lines for your and this time, participation. disconnect may You your

Clearfield (CLFD) 9 Nov 232023 Q4 Earnings call transcript