clfd20251231

clfd20251231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to ___________________

Commission File Number 0-16106

CLEARFIELD, INC.

(Exact name of registrant as specified in its charter)

Minnesota	41-1347235
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7050 Winnetka Avenue North

Suite 100

Brooklyn Park, Minnesota

55428

(Address of principal executive offices)

(Zip Code)

(763) 476-6866

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	CLFD	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Non-accelerated filer ☐

Accelerated filer ☒

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class:	Outstanding as of February 2, 2026
Common stock, par value $0.01	13,685,411

CLEARFIELD, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION	4
ITEM 1. FINANCIAL STATEMENTS	4
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 4. CONTROLS AND PROCEDURES	28
PART II. OTHER INFORMATION	28
ITEM 1. LEGAL PROCEEDINGS	28
ITEM 1A. RISK FACTORS	28
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	28
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	29
ITEM 4. MINE SAFETY DISCLOSURES	29
ITEM 5. OTHER INFORMATION	29
ITEM 6. EXHIBITS	29
SIGNATURES	30

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CLEARFIELD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
	December 31, 2025 (Unaudited)		September 30, 2025
Assets
Current assets
Cash and cash equivalents	$	13,879	$	21,493
Short-term investments		82,556		84,484
Accounts receivables, net		14,971		17,991
Inventories, net		40,201		42,031
Prepaid and other current assets		14,132		11,152
Current assets held for sale		-		21,337
Total current assets		165,739		198,488
Property, plant and equipment, net		9,479		9,682
Long-term investments		60,291		59,822
Goodwill		4,709		4,709
Intangible assets, net		8,929		9,353
Right-of-use lease assets		7,759		8,420
Deferred tax asset		10,610		10,263
Other non-current assets		534		608
Non-current assets held for sale		-		4,828
Total assets	$	268,050	$	306,173

Liabilities and Shareholders’ Equity
Current liabilities
Current portion of lease liability	$	2,890	$	2,823
Accounts payable		3,852		7,028
Accrued compensation		4,197		6,598
Accrued expenses		2,270		2,197
Current liabilities held for sale		-		17,957
Total current liabilities		13,209		36,603
Other liabilities
Long-term portion of lease liability		5,189		5,934
Non-current liabilities held for sale		-		7,473
Total liabilities		18,398		50,010

Shareholders’ equity
Preferred stock, $0.01 par value; 500,000 shares; no shares issued or outstanding		-		-
Common stock, authorized 50,000,000, $0.01 par value; 13,838,883 and 13,839,675 shares issued and outstanding as of December 31, 2025 and September 30, 2025, respectively		138		138
Additional paid-in capital		143,053		147,382
Accumulated other comprehensive income		163		1,731
Retained earnings		106,298		106,912
Total shareholders’ equity		249,652		256,163
Total Liabilities and Shareholders’ Equity	$	268,050	$	306,173

SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CLEARFIELD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
	Three Months Ended			Three Months Ended
	December 31,			December 31,
	2025			2024

Net sales	$	34,341		$	29,698

Cost of sales		22,953			21,023

Gross profit		11,388			8,675

Operating expenses
Selling, general and administrative		13,212			10,721
Loss from continuing operations		(1,824	)		(2,046	)

Net investment income		1,546			1,744

Loss from continuing operations before income taxes		(278	)		(302	)

Income tax (benefit) expense		(1	)		53
Loss from continuing operations, net of tax		(277	)		(355	)

Loss from discontinued operations, net of tax		(337	)		(1,551	)

Net loss	$	(614	)	$	(1,906	)

Loss per share
Basic
Continuing operations	$	(0.02	)	$	(0.02	)
Discontinued operations		(0.02	)		(0.11	)
Basic loss per share	$	(0.04	)	$	(0.13	)

Diluted
Continuing operations	$	(0.02	)	$	(0.02	)
Discontinued operations		(0.02	)		(0.11	)
Diluted loss per share	$	(0.04	)	$	(0.13	)

Weighted average shares outstanding:
Basic		13,869,510			14,213,025
Diluted		13,869,510			14,213,025

SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CLEARFIELD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(UNAUDITED)
(IN THOUSANDS)
	Three Months Ended			Three Months Ended
	December 31,			December 31,
	2025			2024

Comprehensive loss:
Net loss	$	(614	)	$	(1,906	)
Other comprehensive loss, net of tax
Unrealized gain (loss) on available-for-sale investments		105			(125	)
Unrealized loss on foreign currency translation		(1,673	)		(971	)
Total other comprehensive loss		(1,568	)		(1,096	)

Total comprehensive loss	$	(2,182	)	$	(3,002	)

SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CLEARFIELD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(UNAUDITED)
(IN THOUSANDS)

For three months ended December 31, 2025										Accumulated other
	Common Stock						Additional			comprehensive			Retained			Total share-
	Shares			Amount			paid-in capital			income			earnings			holders’ equity
Balance as of September 30, 2025		13,840		$	138		$	147,382		$	1,731		$	106,912		$	256,163
Stock based compensation expense		-			-			1,765			-			-			1,765
Issuance of common stock under employee stock purchase plan		10			-			239			-			-			239
Issuance of common stock under equity compensation plans, net		198			2			(2	)		-			-			-
Repurchase of shares for payment of withholding taxes for vested restricted stock grants		(34	)		-			(997	)		-			-			(997	)
Exercise of stock options, net of shares exchanged for payment		4			-			(57	)		-			-			(57	)
Repurchase of common stock		(179	)		(2	)		(5,277	)		-			-			(5,279	)
Other comprehensive loss		-			-			-			(1,568	)		-			(1,568	)
Net loss		-			-			-			-			(614	)		(614	)
Balance at December 31, 2025		13,839			138			143,053			163			106,298			249,652

For three months ended December 31, 2024										Accumulated other
	Common Stock						Additional			comprehensive			Retained			Total share-
	Shares			Amount			paid-in capital			income (loss)			earnings			holders’ equity
Balance as of September 30, 2024		14,229		$	142		$	159,579		$	1,079		$	114,963		$	275,763
Stock based compensation expense		-			-			1,139			-			-			1,139
Issuance of common stock under employee stock purchase plan		11			-			301			-			-			301
Issuance of common stock under equity compensation plans, net		105			1			(1	)		-			-			-
Repurchase of shares for payment of withholding taxes for vested restricted stock grants		(17	)		-			(491	)		-			-			(491	)
Repurchase of common stock		(196	)		(2	)		(6,273	)		-			-			(6,275	)
Other comprehensive loss		-			-			-			(1,096	)		-			(1,096	)
Net loss		-			-			-			-			(1,906	)		(1,906	)
Balance at December 31, 2024		14,132		$	141		$	154,254		$	(17	)	$	113,057		$	267,435

SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CLEARFIELD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
	Three Months Ended			Three Months Ended
	December 31,			December 31,
	2025			2024
Cash flows from operating activities (continuing)
Net loss	$	(614	)	$	(1,906	)
Loss from discontinued operations, net of tax		337			1,551
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		1,615			1,513
Amortization of premium and discount on investments, net		(117	)		(766	)
Deferred taxes		(375	)		(135	)
Stock-based compensation		1,271			1,050
Changes in operating assets and liabilities, net of acquired amounts:
Accounts receivable		3,020			3,577
Inventories, net		1,830			6,279
Other assets		(2,905	)		(903	)
Accounts payable and accrued expenses		(5,502	)		(2,221	)
Net cash (used in) provided by operating activities (continuing)		(1,440	)		8,039

Cash flows from investing activities (continuing)
Purchases of property, plant and equipment and intangible assets		(988	)		(1,751	)
Purchases of investments		(19,953	)		(39,015	)
Proceeds from maturities of investments		21,660			54,476
Cash paid on disposal of business		(1,012	)		-
Net cash (used in) provided by investing activities (continuing)		(293	)		13,710

Cash flows from financing activities (continuing)
Proceeds from issuance of common stock under employee stock purchase plan		239			301
Repurchase of shares for payment of withholding taxes for vested restricted stock grants		(997	)		(491	)
Withholding related to exercise of stock options		(57	)		-
Repurchase of common stock		(5,279	)		(6,275	)
Net cash used in financing activities (continuing)		(6,094	)		(6,465	)

Cash flows from discontinued operations
Net cash provided by (used in) operating activities		1,380			(889	)
Net cash used in investing activities		-			(318	)
Net cash (used in) provided by financing activities		(1,196	)		77
Net cash provided by (used in) discontinued operations		184			(1,130	)

Effect of exchange rates on cash and cash equivalents		(13	)		132
Net (decrease) increase in cash and cash equivalents		(7,656	)		14,286
Change in cash held for sale		42			1,065
Cash and cash equivalents, beginning of period		21,493			14,148
Cash and cash equivalents, end of period	$	13,879		$	29,499
Supplemental disclosures for cash flow information
Cash paid for income taxes, net	$	(12	)	$	405
Non-cash financing activities
Cashless exercise of stock options	$	419		$	9

SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

Unless the context otherwise requires, for purposes of this Quarterly Report on Form 10-Q, the words “we,” “us,” “our,” the “Company,” and “Clearfield,” refer to Clearfield, Inc. On November 11, 2025, the Company completed the sale of its Nestor Cables business. In connection with this sale, the historical results of the Nestor Cables business and certain assets and liabilities of this business are reported in our condensed consolidated financial statements as held for sale/discontinued operations. Our continuing operations comprise one operating segment and one reportable segment.

Basis of Presentation

The accompanying (a) condensed consolidated balance sheet as of September 30, 2025, which has been derived from audited financial statements, and (b) unaudited interim condensed consolidated financial statements as of and for the three months ended December 31, 2025 and 2024, have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position, results of operations, and cash flows of the interim periods presented. Operating results for the interim periods presented are not necessarily indicative of results to be expected for the full year or for any other interim period, due to variability in customer purchasing patterns, seasonality, and other factors. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025.

In preparation of the Company’s condensed consolidated financial statements, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses during the reporting periods. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Clearfield, Inc. and its wholly owned subsidiaries through November 11, 2025, the date on which Clearfield, Inc. completed the sale of its Nestor Cables business. As of and subsequent to that date, Clearfield, Inc. had no subsidiaries requiring consolidation. All significant intercompany accounts and transactions have been eliminated in consolidation.

New Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance is expected to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. The amendments should be applied on a prospective basis; however, retrospective application is permitted. The standard is effective for our annual period beginning October 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of this standard on our financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU No. 2024-03 addresses the disaggregation of income statement expenses and aims to provide more detailed information about the types of expenses included in commonly presented expense captions, such as cost of sales, selling, general, and administrative expenses (SG&A), and research and development. ASU 2024-03 can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating its adoption approach for ASU 2024-03 and anticipates adopting the standard for the annual period starting October 1, 2027.

In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. The ASU replaces the current stage-based capitalization model with a principles-based approach that permits capitalization of internal-use software costs once (1) management has authorized and committed to fund the project, and (2) it is probable the project will be completed and the software will function as intended. Costs incurred while significant development uncertainty exists must be expensed as incurred. ASU 2025-06 can be applied prospectively, retrospectively, or using a modified retrospective approach. The Company is evaluating its adoption approach for ASU 2025-06 and anticipates adopting the standard for the annual period starting October 1, 2028.

Note 2. Net Loss Per Share

Basic net loss per common share (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding for the reporting period. Diluted EPS equals net loss divided by the sum of the weighted average number of shares of common stock outstanding plus all additional common stock equivalents, such as stock options, when dilutive.

SEC Form 10-Q filed by Clearfield Inc.