Clearfield, Inc. (NASDAQ:CLFD) Q1 2023 Earnings Call Transcript

Ryan Koontz: Got you, that is helpful. And if you could reflect on the strength in the quarter from the cable segment look like it was real strong is that coming from your active cabinets into the DAA or more your fiber the home customers and maybe give us a color on the strike?

Cheri Beranek: Yes, it is coming from both areas. And that there was different types of cable companies. The both the regional, as well as the national have different philosophies and how they can best provide high speed broadband to their customers. And the architecture of our product line that allows us to support whether it is a pawn based deployment or a non-pawn based deployment, active cabinets versus the your X terminal, we are actively involved in both and both have similar high gross profit margins. And we are excited about all of that opportunity moving forward. Like everything else in our space, I think we will probably see some bubbles with that over the course of the next couple of quarters, but the demand is absolute and really exciting to see the cable community come and play.

Ryan Koontz: Alright terrific and in terms of your latest quarter and bookings, any mix shifts there between passings and connected home in the product lines?

Cheri Beranek: We are starting to see a more initial increase in the end of connecting, and that people are looking at their samples that they made the investment in the passing of the homes, and now by connecting the homes, they can turn that into a revenue producing customer that is at a higher rate of revenue for them. So it is still – passing of the home is still a higher percentage of our revenue, but definitely seeing connecting homes increasing and seeing it is exciting to see the success of those deployments take place.

Ryan Koontz: Got you and one last one, any new commentary around the RDOF and ARPA contributions to your recent business? Is it still gaining momentum? And kind of where do you feel like we are relative to those programs contributing?

Cheri Beranek: Still gaining momentum but still very early. This is almost entirely privately funded. So and that is why we are comfortable making the capacity enhancements that we are. One of the things that is very frustrating as an industry, right, is how long it takes for government money to fund through the programs you can get into the market. We have seen it time and time again in regard to 2012, 2008. I mean, all of those times were, we were excited about the money and then we had to wait two years. So we know it is coming. We just haven’t seen a lot of it yet.

Ryan Koontz: Okay, great. I will pass it on. Thanks so much.

Cheri Beranek: Thanks Ryan.

Operator: Thank you. Our next question is from Tim Savageaux with Northland Capital Markets. Please proceed with your question.

Tim Savageaux: Actually my question was on capacity, so that is a good place to pick it up. And you have obviously been on this capacity addition planned for a couple of quarters now, but we do have made some additional kind of increases. So I wonder if you can give a sense of where you stand from a kind of quarterly revenue capacity stand point. Currently, I think you are looking for some record quarters in the second half of the fiscal year, but if you want to take it from what you just reported or what you expect here in the current quarter, where are we from a capacity utilization standpoint? And where do you expect that capacity to be by, call it, fiscal year end?