Clearfield Inc., the Brooklyn Park-based maker of equipment for broadband networks, said Monday it will more than triple the size of its Mexican factory, aiming to maintain growth momentum amid surging demand.
The company also rolled out two new products that will expand its market reach, from mainly rural telecommunications and network operators to service providers in metro areas and suburbs.
The moves signal that Clearfield executives believe the company's recent growth — sales were up 45% during the nine months ending June 30, after rising more than 10% in the comparable period a year earlier — can be sustained for years to come.
"Smaller telephone operators, municipalities, utilities, some of the new developers have been our target for the last decade," Cheri Beranek, the company's chief executive, said in an interview Monday. "Our increasing presence and share in that space have given us the viewpoint that we're in a once-in-a-generation period of fiber investment."
She added Clearfield needed to ensure it has the manufacturing capacity to meet the opportunity. In addition to its Brooklyn Park site, the company for years has operated about 100,000 square feet of production at a site in Tijuana, Mexico. It announced plans to lease a 319,000-square-foot factory built to its specifications that is due to open early next year.
When Clearfield announced its latest quarterly results last week, it revealed a three-month sales record of $38.7 million, up 49%, and net income of $6.1 million, double its year-ago figure.
As well, its order backlog grew by $20 million, leaving it with the biggest backlog in the company's history at around $40 million.
Beranek said the pandemic helped reshape thinking among consumers about the value of internet that's delivered on fiber-optic lines, which yields the highest rate of data exchange, or the fastest speeds.
"Part of what's happening right now is a land-grab among service providers to be the first one in and be able to get those customers," Beranek said. "And it's not a short-term land-grab. There's such a huge percentage of the U.S. marketplace that doesn't have access to it that this could be a 10-year buildout process."
In addition, the federal government and many state governments are spending more than ever to bring small towns and rural areas up to the level of internet speeds seen in cities and suburbs.
As the nation's largest trade show for fiber and telecom network equipment, Fiber Connect, got underway in Nashville on Monday, Clearfield also announced a "collector box" designed for network providers to easily install fiber in apartment buildings, condos and other multi-dwelling buildings.
The StreetSmart Collector Box could put Clearfield equipment onto the radar of larger service providers that tend to concentrate on metro areas. The box is designed to be simple to install and maintain, reducing training requirements at a time when demand for network technicians is high.
"We've been focused on reducing cost of materials and labor for our customers," she said.
At the trade show, Clearfield also is showing a seven-foot-tall power cabinet, designed to work with fiber lines from any manufacturer. Service providers can deploy the cabinets in neighborhoods similar to the way distributed computing systems work in corporate settings. The cabinet also represents a market expansion for the company.
Clearfield shares fell 4.7% to $41.16, after trading at record-high levels over the past two weeks and more than doubling in value over the past year.