Cheri Beranek is our Minnesota Tech Exec of the Year 2016
Clearfield’s success this year, with a stock price up ~48%, isn’t a flash in the pan for CEO Cheri Beranek, it’s the culmination of nearly ten years ongoing effort. If CEO of the decade was a thing, then Beranek is built to last.
Growth in the technology sector near and far has been made possible by fiber optical networks to the home, the office, the coffee shop, the hotel room, and everywhere in between. Connectivity is everything in today’s world: we all want whatever we want whenever we want it. Oh, and make it even faster when there’s money on the line.
The higher level of connectivity, the more productive companies are. The communities where high speed broadband is available are the ones where the jobs are going and staying. Behind the science of telecommunications, which we tend to just take for granted, is a local business that’s delivering success with the numbers to prove it.
What is Clearfield’s background?
We conceived Clearfield in 2007 and spun out of parent company APA Cables & Networks that was never quite profitable. In 2008, we registered as a public company on the NASDAQ: CLFD and came out right as the recession was kicking in which had its pros and cons.
What we saw in the market was the need for a more modular and scalable means to deploy fiber optics for service providers to align their business needs with subscriber demand, yet we had to do things very lean and rethink the marketplace.
Clearfield humbly started with a stock price of 97 cents and a market cap of $10m. We became profitable in our first year and over the course of the past nine years or so, we’ve grown Clearfield to a $250m market cap and a stock price of around $20 currently.
We re-established all previous losses by repaying shareholders back over $35m, have no debt and now over $45m in the bank.
Our five year compound annual growth rate is around 18% with trailing 12 months revenues of $75m, up 25% year over fiscal year, and a net income of $8m, a 71% increase since last years close. We’ve gone from a handful of people at the start to over 225 employees now.
It’s unusual as a small cap company like ours to be so profitable, but we have been that way every quarter of our existence. We’ve put our money where our mouth is in terms of performance.
What exactly does Clearfield do?
You know that cabinet at the end of your block that’s an eyesore? Today, that has probably copper in it, but tomorrow it will have fiber.
Clearfield designs and manufactures hardware for optical-fiber management, providing equipment for managing, maintaining, and delivering broadband service for Internet, voice, and TV. We’re a physical layer of infrastructure that offers an architecture for service providers of any type — wireless, wireline, telco or cable — to be able to manage and protect optical fiber as it is delivered to some point in their network.
In order to enhance connectivity and performance service providers are looking to get fiber as deep into their networks and as cost effectively as possible and it’s important to realize that the explosion of what’s happened online with software as a service and content delivery is the result of optical fiber.
It’s like the highway for 3G, 4G, 5G on the go, or to the home/office, all of that, and today’s buzzword is gigabit.
What do you attribute your success to?
Our stability in engineering and sales is extremely strong.
How does your company’s headcount breakdown?
We have just over 175 here at our headquarters here in Brooklyn Park with additional manufacturing operations in Mexico, China, Finland, and Scotland.
Have you grown organically, via acquisition, or both?
What’s it like running a public company in today’s world?
The challenge is that every 90 days we need to communicate with the market in a very transparent way, both positive or negative, what’s happening within the company.
There’s a lot of competitive risk because we’re like David and going up against multiple goliaths. We don’t do traditional investor relations like conference calls and such, but we do communicate regularly with our shareholders community as 18% of our company is held by employees and/or board of directors.
How do you compete in the market?
Our space is dominated by two very large companies: CommScope (originally ADC) and Corning, billion dollar plus sized companies that supply to the tier 1 telco’s: CenturyLink, Comcast, Verizon, AT&T. So far, we have focused on the 20% of market which is the hundreds of smaller providers.
Our Clearview Cassette product is 12 ports of integrated fiber management which allows us to protect the fiber in blocks of 12 and take those blocks wherever in the network it needs to be deployed — whether that’s in the central office downtown Minneapolis in the 511 building or to a nearby carrier or wherever — all these places need building blocks like ours.
We have provided a more cost effective pathway for delivery into the home or business that reduce the labor associated with fiber, around 60% of the cost of delivering fiber. We’ve been able to reduce that by about 50% when looking at the total cost of operating those networks over time.
What is your personal background and how did you find your way to Clearfield?
I was the COO of Americable when it was acquired in 2003 and I stayed on as President of what was then APA Cables & Networks, which eventually became Clearfield.
I’m a farm girl by nature and nurture, my home town is New Ulm, Minnesota where my parents still live. That rural farm upbringing is core to who I am since farming is more than a business, it’s a way of life and the way I view the world: the work gets done when you own it, not someone else. My original degree from Southwest Minnesota State is in agriculture with my masters in communication from North Dakota State.
I didn’t plan to land in the technology industry, but Great Plains Software hired me in the marketing department after I graduated. I was there in the beginning, way before Microsoft bought the company for a billion dollars.
I first came to Minneapolis for a marketing manager role with Digi International that went from $6m to $60m over the course of four years and became a public company where I really learned about a new level of leadership and management.
I went to TriCor systems in marketing and grew with them from $8m to $80m in three years time. After that I went to AmeriCable which became Clearfield, which was my first CEO position.
What are you into as a person, outside of work?
First and foremost, I am a mother to 4 wonderful kids ages 18-26. I am passionate about technology and entrepreneurship. Family, STEM fields, and business is what makes me tick.
What’s your personal operating philosophy?
One of gratitude. It dates back to the fact that we’re a group of survivors. Coming off the telecom explosion and then implosion when the dot com bust and telecom industry was similarly desecrated. Since Clearfield eventually came out of those ashes, officially in 2008, I’ve always viewed my role as an opportunity to rebuild and achieve greatness.
What does your customer base look like?
We have more than 500 telephone company customers across the country, mostly rural, which is how we went from Startup to over 75 million revenues so far. Typically our customers are serving end users between 1,000 to a million subscribers using our exact same technology.
What does the future look like to Clearfield?
In our most recent ‘FieldReport’, we’ve stated our intentions of going more aggressively after the tier 1 and 2 providers in the market while continuing to hire in sales and engineering.
Is there anything else you would like to add?
Thank you for this honor!