Clearfield, Inc.

Good day, and welcome to the Clearfield Fiscal Fourth Quarter 2025 Conference Call. All participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. At this time, I'd like to turn the floor over to Gregory McNiff, Investor Relations. Sir, please go ahead.

Thank you. Joining me on today's call are Sherry Baranek, Clearfield's President and CEO, and Dan Herzog, Clearfield's CFO. As a reminder, Clearfield publishes a quarterly shareholder letter which provides an overview of the company's financial results, operational highlights, and future outlook. You can find both the shareholder letter and the earnings release on Clearfield's investor relations website. After brief prepared remarks, we will open the floor for a question and answer session. Please note that during this call, management will be making remarks regarding future events and the future financial performance of the company. These remarks constitute forward-looking statements for purposes of the safe harbor provisions of the private securities litigation reform act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. It is important to also note that the company undertakes no obligation to update such statements except as required by law. The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward-looking statements contained in today's press release, shareholder letter, and on this conference call. The risk factors section in Clearfield's most recent Form 10-K filing with the Securities and Exchange Commission and its subsequent filings on Form 10-Q provide a description of these risks. Additionally, as announced on November 12, 2025, Clearfield has sold its Nestor Cables business. Following the divestiture of Nestor, we are reporting only on the Clearfield segment. Beginning with this release, Clearfield is reflected as continuing operations, with Nestor classified as discontinued operations and held for sale for fiscal 2025 and all prior periods on our financials. With that, I would like to turn the call over to Clearfield's president and CEO, Sherry Baranek. Sherry?

Good morning, everyone, and thank you for joining us to discuss Clearfield's fourth quarter and full year fiscal 2025 results. I'll begin with a brief overview of the quarter, discuss our decision to divest the Nester business, share updates on our long-term strategy, and then turn the call over to Dan for a summary of our financial performance and outlook for fiscal 2026. Fourth quarter net sales from Clearfield's continuing operations of $41.1 million were up 13% year-over-year. For the full year, Clearfield's continuing operations net sales grew 20% to $150 million, demonstrating solid execution as we continue to focus on growing faster than the industry and driving market share gains. After a thorough and comprehensive review of the Nestor segment, we made the decision to divest the business. This move allows us to redeploy resources toward our core North American operations and higher return opportunities. Our acquisition of Nestor was focused on gaining access to a key technology, namely the ability to manufacture our own line of FieldShield cable, and we achieved our objectives. We strengthened our vertical integration and Build America, Buy America compliance through the successful transfer of cable manufacturing technology into our US and Mexico facilities. However, expanding Nestor's business beyond Finland into the European market proved to be a lower margin opportunity, despite our efforts to improve margins through process improvements and new product introductions, resulting in a suboptimal use of capital. The transaction resulted in a $10.4 million non-cash right down in the fourth quarter with minimal cash impact. Importantly, the operational benefits for Nestor's integration remain embedded in our manufacturing platform. This divestiture sharpens our focus, improves our long-term margin profile, and better aligns resources with Clearfield's strategic priorities. Looking ahead, our focus remains on protecting what defines Clearfield, craftsmanship, reliability, and service. while leveraging our core strengths and expanding into areas where we can create the most value. We continue to execute on our Better Broadband and Beyond strategy through three core pillars. Protecting our core community broadband business by ensuring that the broadband service providers who have long relied on Clearfield continue to have the products, service, and support they need to succeed. Leveraging our market position into new applications and environments where fiber connectivity plays a growing role, including next generation wireless networks from the metro core to the cell site. Expanding into adjacent markets by utilizing our core competencies to allow us to reach new customers and to strengthen our leadership and broadband fiber infrastructure. As hyperscalers rely on smaller ISPs to push part of their compute workloads closer to the edge, Clearfield's position with regional providers opens up a new growth vehicle to the company. This disciplined approach positions Clearfield for measured growth as the market continues to recover. As part of this next phase, Clearfield will introduce two significant new product lines. In the first quarter of calendar 2026, we will launch a complete line of splice cases, expanding our offering and deepening engagement with customers who operate in environments that require splicing. After extensive review and months of successful field demonstration, we believe this new solution represents the best in class. Following that product introduction, we will release a next generation fiber management cassette optimized for non-hyperscale data centers a fast-growing market where Clearfield's modular design and innovation provide a unique advantage. These launches mark the start of a new generation of innovation as we extend our reach within and beyond traditional broadband markets. Another important element of our strategy is investing in sales development and expanding our distribution channels. We have enhanced our leadership team to support the new phase of growth. Anish Kanakam, our new Chief Commercial Officer, is integrating sales and marketing to align go-to-market strategy with product innovation. Mike Ward, who recently joined as our new Vice President of Broadband Sales, and Mark Temple, who joined as Vice President of Distribution Channels and Strategic Alliances, bring deep industry experience and will strengthen our Tier 1 and channel sales capabilities. Together, these leaders bring renewed focus, operational rigor, and energy to the organization, positioning Clearfield for the next chapter of growth. With respect to our distribution channels, our longstanding partners remain essential contributors to our success, connecting Clearfield solutions to broadband service providers. Building on that strong foundation, we recently added Wiremasters as a distribution partner, who has begun to distribute Clearfield's fiber-rapid connectivity and management products globally with an emphasis on the defense and aerospace markets, and we plan to add a wireless focused distributor early in fiscal 2026, opening new opportunities in cellular backhaul and emerging edge applications. These efforts strengthen our access to new customer groups while maintaining close collaboration with new existing partners who continue to be key to our growth. I want to briefly comment on the BEAD program. We are pleased that 18 of the 52 submitted proposals have been approved by the NTIA. Fiber remains the overwhelming medium to delivering broadband based on the proposal submitted. We intend to vigorously pursue this opportunity and will keep you updated as we approach the deployment stage. Fiscal year 25 was a transformational year for Clearfield, one defined by strategic focus, leadership investment, and a return to growth and profitability. As we enter fiscal 2026, we are executing with confidence on our better broadband and beyond strategy, driving innovation across our core markets while expanding into adjacent opportunities that enhance long-term shareholder value. With that, I'll turn the call over to Dan Herzog, who will review our fourth quarter and full year results and provide our outlook for fiscal 2026.