Clearfield recently released its 10-Q report for the three and six months ended March 31, 2026. Clearfield designs, manufactures and distributes fiber management, protection and delivery products for communications networks in the United States and abroad. Its product lineup includes FieldSmart enclosures, WaveSmart optical components, FiberFlex cabinets, CraftSmart FiberFirst pedestals, YOURx access terminals, FieldShield pathway products, fiber assemblies and ClearPass connector cleaning caps.
In Item 2, management said the company now has one operating and reportable segment after the November 11, 2025 sale of its Nestor Cables business, with that business reported as discontinued operations. Clearfield said substantially all final build and assembly is done in Brooklyn Park, Minnesota, and Tijuana, Mexico, with support from domestic and global manufacturing partners. The company said it sells through direct sales and distribution partners, serving broadband service providers, national carriers, community broadband operators, MSOs, large enterprises and OEM markets.
For the quarter ended March 31, 2026, net sales fell 15% to $34.4 million from $40.6 million a year earlier. Sales to Broadband Service Providers were $16.5 million, down from $18.0 million, while international sales were $499,000, down from $777,000. Legacy customer sales dropped to zero from $710,000.
The quarterly decline came mainly from lower sales to MSO customers, down $2.9 million to $4.7 million, a 38% drop; Community Broadband, down $1.5 million to $15.5 million, a 9% decline; Large Regional Service Providers, down $1.1 million to $9.8 million, a 10% decline; and international customers, down $278,000, or 36%. National Carrier sales rose $281,000, or 13%.
Order backlog at March 31, 2026 was $31.6 million, up 39% from $22.8 million at December 31, 2025 and up 12% from $28.2 million a year earlier. Clearfield said the increase reflected normal seasonality.
Gross profit for the quarter fell to $11.2 million from $14.0 million, and gross margin narrowed to 32.5% from 34.4%. Cost of sales declined 13% to $23.2 million, but lower overhead absorption from reduced volume pressured margin. SG&A rose 8% to $13.2 million from $12.3 million, driven by $236,000 more in wages and benefits, $360,000 higher software costs and $167,000 more stock-based compensation.
That combination pushed Clearfield to a loss from continuing operations of $2.1 million, versus income from continuing operations of $1.7 million a year earlier. Net loss from continuing operations was $528,000, or $0.04 per share, compared with net income of $2.5 million, or $0.18 per share, in the prior-year quarter. Net investment income fell to $1.4 million from $1.6 million.
For the six months ended March 31, 2026, net sales were $68.7 million, down 2% from $70.3 million. Sales to Broadband Service Providers rose to $32.9 million from $31.2 million, and international sales climbed to $2.4 million from $1.1 million. Legacy customer sales were zero, down from $1.2 million.
Over the six-month period, MSO sales fell $2.2 million to $10.9 million, Large Regional Service Provider sales declined $664,000 to $15.0 million, and National Carrier sales dropped $429,000 to $4.3 million. Those declines were partly offset by Community Broadband sales rising $1.7 million to $35.2 million and international sales increasing $1.3 million.
Cost of sales for the six months was $46.2 million, down 3%, while gross profit was essentially flat at $22.5 million. Gross margin improved slightly to 32.8% from 32.2%. SG&A increased 15% to $26.4 million from $23.0 million, led by $1.7 million more in wages and performance-based compensation accruals, $540,000 more in IT maintenance and services, $247,000 more in professional services and $382,000 more in stock-based compensation.
That left Clearfield with a six-month loss from continuing operations of $3.9 million, compared with a $364,000 loss a year earlier. Net loss from continuing operations was $805,000, or $0.06 per share, versus net income of $2.2 million, or $0.16 per share, in the prior-year period. Net investment income declined to $2.9 million from $3.3 million.
As of March 31, 2026, Clearfield had $147.1 million in cash, cash equivalents, short-term investments and long-term investments, down from $165.8 million at September 30, 2025. It also had a $40 million line of credit with no borrowings outstanding and said it was in compliance with its debt covenants. Today the company's shares have moved 10.7% to a price of $33.5201. For the full picture, make sure to review Clearfield's 10-Q report.
