Clearfield CEO Cheri Beranek says the company, which provides passive fiber management products, is keeping up with demand. But sales are definitely brisk. For its fiscal year 2021, which ended September 30, revenues grew 51% to $140.8 million.
Notably, Clearfield’s backlog increased 522% to $66.4 million at year-end compared to $10.7 million at the end of its fiscal 2020.
Wall Street has taken note of Clearfield’s optimistic future sales. The company’s stock was trading at about $25 per share in January, and it is now trading around $70 per share.
Beranek, who became president and CEO in 2007, led the company as it developed a fiber optic management platform with an architecture that is standard throughout the network. Its fiber cables are cut in the factory to make them the right size for the places they will be laid – so no splicing is required. And if there ends up being some excess cable at the site, the company has a special, flexible cable that makes it easier to compact.
“We think the key to the labor shortage is to reduce the amount of skilled labor needed to deploy,” said Beranek. “You can put someone you hire off the street and have them plug in fiber.”
The company’s main customers are Tier 2 service providers such as Frontier and Windstream. “This is our space that today is getting a lot of attention,” said Beranek. Clearfield also works with smaller telco and cable providers as well as municipalities.
Lead times
Recently, there has been some alarm in the fiber ecosystem about supply-chain shortages and long lead times. Mike Bell, general manager of Corning Optical Communications, said this month that lead times are “much longer” than a month.
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Beranek doesn’t seem overly worried. She said, “Clearfield was built on very short lead times. We’re providing product at far less than a month.”
Its customers are planning for their fiber needs in advance and not waiting to place orders at the last minute. “Our backlog is definitely growing and based on customers who want to make sure they can get the materials they need,” she said.
In terms of sourcing its products, she said, “We do have our own branded fiber cable that we manufacture with our supply chain partners.”
Clearfield has a Mexican facility that manufactures some of its products, and it’s looking at getting optical cable manufactured in Mexico in 2022. “At this point we can source from further distances,” she said.
The company employs about 285 people in the U.S. with about 100 of those people associated with manufacturing. About 400 people work exclusively on Clearfield manufacturing projects in Mexico.
Federal subsidies for fiber
The momentum behind fiber deployments, so far, has arisen from the pandemic.
“Right now, it’s not a government-funded market; it’s a demand-driven market,” Beranek said.
But there’s real excitement about the Infrastructure Investment and Jobs Act, which will flood the broadband ecosystem with billions of dollars to get internet connectivity to unserved and underserved areas.
Clearfield’s portfolio has been designed to serve smaller telcos and cable companies that plan to help to close the digital divide.