AGM 2021

Feb 25, 2021

Hello. My name is Ron Roth. I'm the Chairman of the Board of Clearfield. On behalf of the company, its management and employees, I welcome you to our shareholders meeting today. I hope that all of you are safe and healthy. The last year has been one of the challenge as our society has faced a pandemic that has sickened millions and killed hundreds of thousands. For those of you who have lost loved ones, you have my personal condolences. This year's annual meeting conducted in this virtual environment is unlike any Clearfield has done in the past. We will attempt to maintain our commitment of providing content rich environment and direct access to our Board members and management team. In attendance today, but not present on the screen are my fellow directors. Our outside directors are Chip Tyson, Pat Gevel, Roger Harding, Donald Hayward, our CEO, President and also Director, Sherry Biernik, will be available for questions later in our meeting. In years past, our annual meetings have provided a lively exchange of information in an in person format. Questions have been welcome and we prided ourselves in the making of this meeting a meaningful opportunity to communicate with our shareholders. While we can't meet in person, we can still aim to make this meeting a meaningful and productive exchange of information. Questions are encouraged. Upon registering for this meeting as a shareholder, you were provided the opportunity to present questions using the chat function that you will see on your screen. Please note, you must have used the control number found on your proxy voting card to gain access to the meeting as a shareholder. As an alternative, we are making a telephone number available by which you can text any questions to our attention. That number is (612) 429-1950. The format for our meeting today is that following my introductory comments, there will be a ten minute video presentation. Our goal with this short video is to provide some additional insight into the value proposition that Clearfield provides in this exciting time in broadband expansion. Following the video, Dan Herzog, Clearfield's CFO, will conduct the formal business meeting. Following the business meeting, Clearfield's CEO, Sherry Bernek, and her management team will be available for questions. Once again, I encourage you to ask questions if you have any. The opportunity to ask questions is via the chat function on your screen. And once again, the text number is (612) 429-1950. With that, I hope you'll enjoy this look inside of Clearfield as prepared by our management and staff. Thank you. Our mission at Clearfield is to enable the lifestyle that better broadband provides. Our customers are service providers looking to reduce the total cost of ownership of their fiber fed broadband networks because lower cost means our customers can push fiber further, faster. Clearfield's fiber protection, fiber management, and fiber delivery solutions enable rapid and cost effective fiber fed deployment so that our customers can reach any subscriber anywhere. We have developed and continue to deliver the industry's most modular and scalable fiber management system in the market and have been doing so for over a decade. We knew it wasn't a question of if, but how and when fiber would be called upon to deliver the connectivity required for the type of high speed broadband our work and learn from anywhere society demands. Some of our customers are local or regional players you may have heard of, like Allo Communications, Paul Bunyan Telephone, and Mid Continent, smaller operators that are building on rural America with services that only fiber can deliver and that make these areas thrive. Other customers are household names you're familiar with that have selected Clearfield's technology to help bridge the transition from wireline to wireless networks, making true wind fiber connectivity a possibility. Let's talk about what we call our community broadband customers. These include small to medium sized service providers throughout North America. Our track record and reputation in the community broadband market has positioned us extremely well to take share and further capitalize on the fiber expansion that's currently underway. Our base of independent telephone providers is joined by new market entrants, utilities and municipalities. They've seen the economic and societal impact that fiber can have on community, and they want to bring those benefits to the citizens of their communities. They're rolling out high speed broadband for consumers and businesses. Meeting the needs of fiber to the home and businesses require a flexible, scalable, and simple to deploy product architecture designed to meet the unique needs of the environment into which it is installed. Let's explore this architecture now. Beginning at the central office or head end, signal is generated and passed out into the fiber optic network at ever increasing speeds, making fiber management ever more crucial to protect the fibers from physical damage and micro bends. Fiber management is engineered into every part of the Clearfield product family, beginning with the ClearView cassette equipped with MPO inputs and a variety of output connector types. This modular building block approach is then introduced into each successive product in the CO, including the FX HD fiber frame and the FXMP multipurpose panel, radically simplifying designs and enabling a grow as you go platform. This also includes the interconnecting jumper featuring Clearfield's fiber deep technology for both single fiber and multi fiber MPO jumpers. This attention to detail ensures that the very best signal quality and reliability is produced and maintained. As we leave the CO or head end into the distribution portion of the network, this same ClearView cassette can be found in fiber distribution hubs or FDH as it's known. These durable enclosures allow the network operator to easily and cost effectively distribute signal from the CO to large numbers of subscribers while giving the network operator the flexibility they need to provide point to point or split signal solutions for FTTH as well as speed up the time of deployment. And since no two networks are alike, Clearfield offers an FDH for every environment, including indoor, traditional slab or vault mount, below grade, aerial, and even a pre assigned FDH for those operators that want to reduce operational expenditures by having each port predesignated and connected at the factory, thus reducing labor costs as well as total cost of ownership. With the advent of five g looming, many networks need to include the ability to also connect the huge quantity of small cell antennas in tandem with their FTTH deployments. Clearfield small count fiber handoff box allows network operators to easily add a small cell or DAS location by simply plugging in a pre terminated tail from the handoff box to the network backbone. Then the handoff box allows ruggedized jumpers to be easily plugged into five g radios, thus allowing a no splice plug and play connection that drastically speeds fiber deployment to these sites. As the fiber reaches the desired neighborhood, the same fiber management and protection that occurred in the other network areas is continued right to the customer's home. Signal is distributed to each home through a series of fiber terminals typically located at the property line. A preconnectorized fiber or drop is simply plugged in at the terminal and then routed to the home where it is connected to one of Clearfield's home deployment kits or HDKs and routed inside the home to a fiber outlet box and subsequently terminated into the customer's optical network terminal, better known as the ONT. This completes the pathway and provides safe and reliable connectivity all the way from the CO or head end to the customer's desktop. Our craft friendly building block approach, coupled with exceptional lead times, helps network operators reduce their total cost of ownership all while speeding up their rates of deployment. Over the trailing twelve months, we've crossed the $100,000,000 threshold in annual sales with a growth rate of more than 20% over that period. We've done it with year after year profitability while posting a balance sheet with significant cash and no debt. We've built a dedicated management team and a world class workforce. By listening to our clients' needs and collaborating to fulfill their product requirements, Clearfield stands ready to build a better broadband. Our strategic plan has been a multi year initiative to prepare Clearfield for the accelerated rate of demand and growth we are now seeing. We are now ready to come of age to further position our company for disruptive growth opportunities that are just now moving from concept to reality. We, along with leading analysts, see tremendous opportunity for fiber broadband expansion over the next five to ten years. The opportunities we see ahead of us are fully supported by three pillars upon which we are building our company. Our first pillar, building a better broadband, one community at a time, leverages Clearfield's long standing customer and partner relationships. Ultimately, our goal is to facilitate the enablement of pervasive high speed broadband to underserved and unserved communities. The speed at which the industry is moving to finally bridge the broadband gap will only accelerate with the help of government sponsored programs like the Rural Digital Opportunity Fund, known as RDOF, that is infusing an incremental $20,000,000,000 into this market to ensure any home has the opportunity for better broadband. Accordingly, a major initiative within Clearfield is to extend our reach within community broadband into electrical co ops, rural utilities, and municipalities. The communities these new providers are targeting may not be serviced by a rural telephone company and still underserved by the major incumbents. Our go to market strategy includes continuing to partner with established distributors servicing these target markets. Of course, community broadband is just one area of growth for Clearfield. Our tier one customers are aggressively rolling out five gs networks that are heavily dependent on fiber for backhaul and fronthaul services. With the ability to deliver 100 times faster broadband to connected wireless devices, five g will be a transformational technology shift for businesses and consumers. Our universally deployable solutions are ideal for these mass market deployments that will require thousands of additional small cell towers. We make it easier for our customers to overcome any barriers that might limit their ability to support five g networks with fiber deployments. Simply put, we make what is planned possible. Our second pillar, delivering innovation for TrueOne fiber deployment involves three key initiatives. First, leveraging presence in the community broadband to enable One Fiber backhaul second, removing obstacles for integration of wireline and wireless networks and third, bringing Clearfield's fiber management expertise, to five gs, NG PON and edge computing. Our third pillar, scaling operational excellence for superior customer experience, includes strategically investing in products, manufacturing and our supply chain to increase competitiveness and reduce costs. Further, it promotes the investment in training tools and programs as well as service initiatives to ensure our customers get their products to their target delivery dates. Beyond our manufacturing plant in The U. S, the investments we have made to our operations in Mexico are integral to our capacity expansion and best cost manufacturing programs. The beneficial results we are seeing have yielded both improved efficiencies and cost effectiveness. We are systematically adding personnel at both facilities to meet the growing demand we are seeing for our products, and we'll continue to evaluate our needs on an ongoing basis. Further, as we scale our business, we are exploring the means to expand our footprint in Asia. We've long had boots on the ground in Asia to provide quality control for the organizations that are manufacturing to our specifications. Utilizing some of the process gains we've achieved in our COVID driven virtual world, we're now working directly with Asian design personnel who can help us cost reduce from the inception of the design rather than the two step process we've used previously. It is undisputable that better broadband changes lives. If 2020 taught us anything, it is that with better connectivity, we can stay engaged and involved when we can't be together in person. Building a better broadband is our brand promise. Won't you join us? Hey, Mike. I apologize for that. My name is Dan Herzog. I'm the CFO of Clearfield. And on behalf of the company, I hope you enjoyed the video you just watched and learned a little bit more about the company. Right now, I will begin the formal portion of our twenty twenty one Annual Shareholders Meeting today. We are going to take questions about the formal portion of the twenty twenty one Annual Meeting at this time, and we will take general business questions and other questions at the end of the formal portion of the meeting. You can ask a question about the matters being voted on at the twenty twenty one Annual Meeting by typing into the box at the bottom of the screen. Before we move on, I want to note that the meeting is being recorded, and a webcast replay will be available on the same meeting website following today's meeting. I would now like to call this twenty twenty one Annual Meeting of Shareholders to order and proceed with the formal portion of the meeting. Following the formal portion of this meeting, we will turn the presentation over to Sherry Barenick, our CEO, for her remarks and then begin taking any questions you have. At this time, we ask that you submit any questions on matters relating to the proposals at this twenty twenty one Annual Meeting. You can do this by typing in the box at the bottom of the screen. This meeting was called by a notice and proxy statement first mailed on or about 01/12/2021, to all shareholders of record on 12/29/2020. We have received proxies representing more than a majority of the shares of common stock entitled to vote at this annual meeting. Therefore, this meeting has been duly called and a quorum is present. I will be acting as inspector of election. The polls are now open, and you can vote at any time. Voting at the meeting will be online via the links you see on the screen in the voting section. Anyone who desires to vote should do so now using these links on the screen. Please note this is the only way to vote your shares now via the voting link and instructions you see. If you already submitted a proxy or voted via the Internet and do not wish to change your vote, no further action is needed at this time. There are three matters for consideration at today's annual meeting. The first item of business is to elect six directors to serve until the next annual meeting of the shareholders or until their respective successors have been elected and qualified. The nominees are Sherry Baranick, Ron Roth, Roger Hiding, Don Hayward, Chip Heissen, and Pat Geppel. The second item of business is to approve on a nonbinding advisory basis the compensation paid to our named executive officers. The third item of business is to ratify the appointment of Baker Tilly Birchow Krausz LLP the independent registered public accounting firm for Clearfield for the fiscal year ending 09/30/2021. Information regarding the director nominees and the other proposals is set forth in the proxy statement. If you wish to vote, you need to do so by using the available links in the voting section on your screen. We will now answer any questions that have been submitted at this time for the twenty twenty one annual meeting and the three item business for consideration by shareholders. There being no further questions that I see, At this point, I now declare that polls closed for each matter voted upon at this meeting. The preliminary report of the inspector election indicates that each nominee has received the affirmative vote of the holders of a plurality of voting power of the shares represented at the meeting and entitled to vote for the election of directors. Accordingly, each of the six nominees identified in the proxy statement is elected as a director of the company to serve until the next annual meeting or until their respective successors have been elected and qualified. In addition, the shareholders have approved on an advisory basis by the affirmative vote of the holders of a majority of the voting power of the shares represented at the meeting and entitled to vote on that matter proposal two relating to the compensation paid to our named executive officers. My preliminary report also indicates that the shareholders have approved by the affirmative vote of the holders of majority of the voting power of the shares presented at the meeting and entitled to vote on that matter proposal number three, the ratification of the appointment of Baker Chili as the company's independent auditors. The final report of the inspector of election will reflect any additional shares voted online during this meeting. There being no further business, the formal business meeting is now adjourned. At this point, I will turn it over to Sherry Baranick for a short introduction, after which a question and answer session will follow. As a reminder, upon registering for this meeting as a shareholder, you are provided the opportunity to present questions using the chat function that you will see on your screen. Please note, you must have used control number found on your proxy voting card to gain access to the meeting as a shareholder. As an alternative, if you join this meeting as a guest but would like to ask a question, we are making a telephone number available by which you can text any questions to our attention. That number is (612) 429-1950. Again, that's (612) 429-1950, and it should be on the agenda on your screen. Please include your name and institution if you are affiliated with one as you submit any questions. We'll be taking questions until about 3PM today. And if we run out of time to answer your question or we do not answer it, we will follow-up with you or if you provide if you provide your email address or telephone number in the chat or by text. Before Sherry gets started, I wanted to bring to your attention that our remarks today may involve forward looking statements regarding the company's future plans, objectives, beliefs and expectations. These forward looking statements are not guarantees of future actions, outcomes, results or performance. There are significant risks that our actual business will differ materially from the future plans, objectives and expectations described in our remarks for the reasons set out in the Risk Factors section of our most recent Form 10 ks. And with that, I will turn it over to Sherry Baranick, the company's CEO. Sherry? Thank you, Dan. Welcome to this unusual, but I hope very productive Clearfield shareholder annual meeting. Dan is joining us from our corporate headquarters. Ron Roth is also joining us, our Chair from his home in Florida, and I'm joining you here from my home in Minnesota. It has been a very tumultuous year and almost a year since we've been working remotely. So I thought first, I would give you an update on how we have managed COVID during this time. Our initial response to COVID was ensuring the safety of our employees. Non manufacturing employees have been working from home for these last eleven months. Manufacturing employees have continued to work in our production plants as essential personnel. We have implemented extensive safety measures, starting with plastic draping and then moving to plexiglass protected workstations and face masks are, of course, required. We also have nursing staff on staff on-site and daily monitoring protocols. Extensive cleaning in our facilities is standard. There have been isolated cases of COVID on-site, but we are proud to report that there have been no transmissions of COVID from one employee to the other and no outbreaks within any of our facilities. We also ensured that our supply chain was intact and then we've enhanced our inventory in each of our physicians. We've also taken steps to ensure and strengthen our supply contracts. Finally, we instituted the communication and transparency needed to not only survive, but I believe thrive in these very expanding marketplace. I'd like to thank all of our employees for their rapid ability and extra effort to adapt to COVID, their diligence to operate and follow the protocols and their ability to work collaboratively over these last eleven months and to achieve the response to demanding the demands of our customers and to achieve, I think, some amazing financial results. The world's changed. Broadband is not a luxury, but instead a necessity for remote working and distance learning, and it has been a lifeline for personal relationships. High speed fiber fed broadband is the key to a strong economy and to cultural equality. Yet Clearfield has not changed. We were founded to connect the unconnected. We have focused from the beginning on developing an architecture that would reduce the cost of deployment and to bring that scalable architecture to rural markets that were being underserved by the incumbents. Slightly more than a decade ago, we developed our first outside plant cabinet with fiber pioneers like Paul Bunyan Telephone and Cincinnati Bell. We were proud then and now to be developing our products as field engineered rather than lab designed. Today, we offer the most scalable platform of our products to small and large providers alike. We believe we are uniquely positioned to capitalize on the swirling demands among the rural markets as well as the suburban. We believe our future is bright. We are dedicated to building a better broadband, meeting the needs of all of our stakeholders, our employees, our customers, our suppliers and our shareholders. Clearfield Annual Meeting of Shareholders has always been a dynamic exchange of questions, and I hope useful answers. The questions you have submitted over chat function and text are being directed to Dan. If we don't get to your question and if you've included your name and address, we'll be sure to respond to you directly. We wanna have this to be the most as useful and as most exchange oriented as we've had in the past, so we really encourage you to ask any and all questions over chat or text. And with that, Dan, what are you seeing? What are people interested in and looking for from an area of questions? Right now, we have just one, so maybe they're slow in coming in. But the first question, I'm not really sure who it's from, but we discussed international sales opportunities, specifically in Canada and The UK. Both markets have very large fiber opportunities. Yes. Well, we've actively been working in Canada. We have both manufacturers, reps and distributors on-site in the Canadian marketplace. Canada is one of our strongest growing markets, and we believe we're really strong in the community broadband efforts there. Canada has been adding the government funding in that space and we have feet on the ground through our distributors and our manufacturers reps by which to manage that. All of our existing products that we sell in The U. S. Market are positioned and well established for Canada as well. The UK, which is deploying through typically a group called Fiber City and other opportunities is outside of our current market initiatives. I'm sure you are following some of the things associated with Calyxt and some of the work that they're doing there for that deployment. The Johnny Hill, our Chief Operating Officer, and I have visited The UK for potential opportunities, but we've identified that our product line would not be appropriate for the European market and will require us to provide some extensive new products redesign and wouldn't return provide the right return on that investment. Instead, we're focused on The U. S. Market and the North American opportunities here. Like you've identified, Canada has some strong government funding and The U. S. Market has some amazing government funding the last year and moving forward. Over the last year, we've seen programs like the CARES Act, which have provided funding for broadband initiatives. Moving forward, there's this program called RDOF or the Rural Digital Utility Fund or Opportunity Fund, excuse me. And under RDOF, up to $20,000,000,000 is going to be provided into service providers in our community broadband effort. A good share of about 40% of that money was allocated to under unserved markets, and that was awarded now in the last quarter. Of that money that is being presented, up to 85% to 90% of the targeted communities, targeted homes are going to be provided with gigabit services, and many of those customers are existing Clearfield shareholders. So we're actively working toward that RDoP initiatives. In the future, there's additional government funding efforts that we're going to be working under and are excited about the growth opportunity there. Outside of that, some of the Caribbean and Mexican markets, since you asked about international, are slower. We don't see some of the government funding initiatives underway. And so that has really resulted in no opportunity to get those markets out of their COVID slowdown. But we remain committed to those markets. We have feet on the street in those markets as well. And when their economies rebound, we're going be in a good position to work with them. Anything else, Dan? Nothing from the outside right now, excuse me. Yes, I'm sorry, there is a follow-up to that. And that is, is the start of the monetary impact of RDOF still expected in second half of calendar year 2021? It is. We do intend to see some initial opportunities coming in the second half of this year. Remember that is a ten year program, and so it will start slow and move up from there. But we are seeing people currently evaluating it, seeing how they're going to be underway. And I think we'll start to see it a little bit in the tail end of our fiscal year, but it's much more of a fiscal twenty twenty two opportunity for us and moving forward. One of the things I talked about historically or in previous shareholder events for our week excuse me, our quarterly field reports is that our opportunity per home passed and connected is about $200 per home. Based upon the targeted markets for the RDOF initiative, that's about $50,000,000 of total available market opportunity to Clearfield on an annual basis. So today, we think we have about a 20%, twenty two % market share. So actively looking to achieve and target some of those dollars, I think we actually might be able to increase our market share, in fact, what forward looking statements based upon some of the things that we're working toward. Of course, not a projection of future revenue or forecast. One of the things that has been unique about Clearfield's shareholder meeting in the past is the opportunity to dialogue between myself and our Board's Chair, Ron Roth. So I wanted to take this moment to open up the dialogue between Ron and myself. I think he is standing by in Florida. Ron, can you say good afternoon? Good afternoon, Sherry. Can you hear me okay? Yeah. We can. Thank you very much. Good to see you. Well, it's a little different than our last meetings and running around the room trying to solicit questions. So I got a real tough question here for you to start with. How did Clearfield get its name? Well, Clearfield actually goes back to standpoint of we were figuring out what we wanted to name the organization. Those of you who've been around with us a while know that our legacy operation was a company called APA. And when we had the opportunity to break away and form a new organization, it was a chance to really think about what do we want to be. In the very beginning, we thought there was some things being tossed around. One of the ideas was called Blue Prairie, thinking we could capitalize on the water of Clearfield, water of Minnesota and like the Silicon Prairie from the West Coast, we could be the Blue Prairie. Got shut down. But Clearfield actually means that Clear is the vision that we wanna be able to provide broadband connectivity and to connect the unconnected field was to to identify that we were grounded in the practicality of being able to make that work. The logo for Clearfield actually has 12 segments. And so when you look at it the next time, can see it behind Dan's shoulder when Dan addresses the next question, you'll see that there are 12 different segments, you know, just like a fiber. And the petals surrounding it are to be able to protect that fiber, which is Clearfield's really brand promise to protect that fiber and provide the utmost of performance. You got a harder one for me, Ryan? I got a real yeah. I got a harder one for you. When we first started, we were primarily in the in the Midwest, and then we grew from there. Maybe you can give Lieutenant an overview as far as our reach throughout the country, areas that were strong or unique. You mentioned Canada, and you mentioned other areas outside the country, but I'd give people an idea of what areas that we're operating in now and where our sales are occurring. Well, we do operate in all 50 states in The U. S. From a legacy standpoint, we were strongest in the Midwest. But today, operate actually under 14 different territories across The U. S. Market with field personnel in each of those 14 territories. The one of the highest growth markets for us is really the Deep South. Mississippi, Alabama, Louisiana are just exploding in regard to the opportunities associated with broadband. We've always been a strong source in Middle America. You'll see a lot of fiber cabinets being built and being deployed in Missouri and Nebraska and Iowa. We have some emerging opportunities around some of the bigger markets associated with Boston and New England and have always looked strong in Alaska. Alaska has been one of our proving grounds because of the hardened ruggedness of deploying in Alaska and have been a chosen provider from Alaska Communications for a number of years. We also support our field operations with additional people that we call smart guys. Smart guys are also field in the field. They're distributed across the country. These are fiber pioneers, people who have been deploying fibers for their original career. And now we recruited those pioneers to work for us so they can work alongside all of the different possibilities so that people who are deploying now in the future, you don't have to make some of the same mistakes that these guys did. They can learn from experience. So we have in any given day, there are you know, we have two fifty employees in Clearfield. I would say in any given day, 80 of them are actually talking to customers. So we're very associated with being able to make sure that our first core value of a comp as a company is to listen, and we are really working to listen to each of those company companies, you know, on a daily basis. In addition to our US manufacturing, we do have manufacturing operations that are dedicated to Clearfield just across the border in Tijuana. We have an additional two fifty employees in the Mexican market and also do a level of Asian sourcing and Asian design work that is in collaboration with our team. So we really reach across the globe, but are continuing to focus on that North American market and being able to capitalize upon it. Dan, is there anything that's come across from the shareholders? I do have a few, and you've covered some of it, but I still want to read it just so they are aware that we're getting them, and I'm going read them. So you may just But I want the first one comes from Steve Kramer. Congratulations to the entire Clearfield team. I've been a Clearfield shareholder for more than a decade, and this is the most exciting time to be one. If you can please provide some granularity around the RDOF opportunity and how it might impact Clearfield revenues in 2022 and beyond. For example, might it add 30,000,000 to $40,000,000 to the previously planned 2022 revenue plan and substantial growth after that? Well, is really exciting because RDOF is really about community broadband, and it's getting fiber into the hands of everyone across the country. The and it speeds up the delivery. In in the past, you know, one of the things that we were able to prove in the marketplace is far back as 02/2008 during the economic recovery times that happened there. There was dollars that were being provided to rural markets, and those dollars proved that fiber wasn't, that the value proposition worked and that the return on investment was true. It was just it was very, but it also proved that was capital intensive. So today, as we look at the RDOF initiative, we're seeing an opportunity to bring some things forward. So certainly, the COVID situation has not only validated the need for fiber, but it's brought up and accelerated some of the rate of deployment. What our doc does is provide a whole another level of funding stream so that especially on this first award, the first award is for unserved markets, and these are environments that would have just not been able to provide fiber to without government initiatives. So we believe that, as I said a little bit earlier, the annual revenue opportunity for under RDOF is about $50,000,000 for our level of product. We're certainly going to go try to get our share and then some. So I don't know that it's 30,000,000 or $40,000,000 Steve, but it's certainly an uptick for what going out to make happen. But I think it's also important to note that our market is growing not only because of our drop in government funding, but because we have validated that fiber is the most economical way by which to operate a telecom network. The you know, there's been an announcement, and I can I don't remember the research firm, but I can provide it if anybody is interested, that has put together a finding as to who is going to be deploying fiber over the course of the next ten years? And there's been announcements from Frontier, Windstream, SensoryLink, now Momentum, who with their rate of fiber to the home deployment actually will draw dwarf. I've been trying to say that word all day today. Dwarf the amount of fiber that is gonna be deployed to AT and T and Verizon networks. So and those these are being self funded because some of those organizations are now, you know, out of, you know, out of bankruptcy, reestablishing our themselves. And if research has indicated in the past that as long as you can get a take rate above 30%, the that is a profitable network by which to operate under fiber. In addition, what we found is that fiber is the most cost effective means by which to operate a network so that once you put fiber into your network, your call rate, your return calls, your service calls all go down substantially. So our golf is great, but fiber in general is gonna be a, you know, a really rich market for us to work under. As long as I've had the opportunity, I wanted to be able to call out that we just don't work in fiber to the home. You know, our platform is fiber to anywhere. Yeah. That means we're involved in the telco regions, but also the cable markets. You know, you've seen in recent field reports that our cable TV solutions and our cable TV revenues have been up dramatically, you know, as as much as 40%. The so that is really associated with a lot of the regional cable TV companies identifying that fiber and fiber to a home can augment what a cable TV is operating within. And we're also then working with other types of cable operations to get their cable deeper into their networks. So they need hub collapses in different parts of our architecture. So whether it's a telco market or a cable market, they're both attractive solutions for us. And then as we go into the wireless markets and some of the five g initiatives, you know, five g has been, you know, a lot of hype for a couple of years. The there's actually an amazing amount of fiber that's being laid. It's just not yet at a point where Clearfield gets the opportunity to participate in that deployment. Our opportunity is really the meet me point. We've talked about that in the past, Mary, the transition box that meet that allows you to move from wireline to wireless, and it will be involved in some of the small cell deployment that is really coming forward in the next coming years. The and so a lot of those small cells are gonna be distributed throughout the community broadband marketplace, which gives us the opportunity to benefit from not only fiber to the home in community broadband, but also the backhaul that will be driven by five g in those in those communities. Okay. I do have a few more. Shifting a little bit here, from, I believe, mister Hank Manti. Regarding our international, can you give us a status of Latin America? Yes. Latin America is a difficult market. It is still suffering strongly from the COVID world. Their COVID was as strong and as difficult in the Latin American market as it was in The US market. In some countries, even worse, and they don't have some of the the vaccine issues and the like are yet to be seen there. In addition, they don't have the economic stimulus dollars that have been driven in The U. S. Market, broadband funding or not. And so the Latin American market has stalled for us. It was down for us a little bit last year driven by COVID. I think it's it will be a solid kind of run rate business for us, but it won't be the driver of our growth initiatives, at least in the next year to eighteen months. Nice. And I have a couple of questions that they kind of run together, so I'm going to combine a few here. So over the past twelve months, about twothree of the revenue came from Tier two and Tier three carriers. Are you expecting this split between Tier one and Tier two and Tier three to going forward? And what areas of growth are you most excited about? And beyond that, somebody also asked, there have been comments about COVID has slowed down Tier one penetration due to lack of product marketing and training and relationship building. With vaccines rolling out and cases declining, is this opportunity starting to reaccelerate? So I think it's a discussion on Tier one, if you will, and then split between Yes, for Tier one and Tier two and Tier three and how that all kind of comes together. I mean, R6 right now, there is a lot of energy being associated into small carriers, small markets. And it's, you know, driven not only by the need for remote learning and for being able to work from home. It's also driven by the social equality challenges in that a lot of the money that is being deployed in tier two and tier three markets are often in underserved communities or communities of of, you know, economic challenges. So, you know, we believe that the community broadband efforts and the smaller carriers are really where you're gonna see the energy. They were able to in in a COVID world of of 2020. They were able able to pivot faster and deploy faster and being able to get their dollars approved faster. So our growth so far this year has been absolutely driven by Community Broadband. But I think it's important to note that that's been ten years in development. And so our established brand recognition there is one of our best core assets, and we are really aiming to continue to be able to foster upon that. Tier one has definitely been affected. Our growth in Tier one by the COVID environment, there's been a limited amount of fiber to the home deployment in the tier one markets. You know, we do have FieldShield is associated with the fiber to the home deployments in the tier one marketplace, and that has been a successful opportunity for us but limited. I would say in the tier one, one of the things that I'm most excited about is our product lines that are different. And so two that I that I will call out are the transition box that I talked about previously, which is an approved product for that deployment of five g. And and the product that you saw actually in the video earlier today, which is the aerial fiber distribution hub. The this is a solution that no one else in the marketplace has. It's associated by being able to deploy fiber distribution on the, actually on the wire rather than on the pole or on the ground. And why this is important is because as incumbent providers leave the their in network solutions, they are going to be having some of the same challenges of years ago when Google had challenges with with, poll rights and permitting and the means by which to deploy in a out of network environment. The aerial fiber distribution hub is designed for those select type opportunities or even Tier one opportunities that are to be deployed outside of network And providing that opportunity to deploy without permits and without some of those other kinds of challenges really will be a strong growth engine because we answer a problem, remove an obstacle, you know, that others aren't doing. Yes, another question. Do the moves to cut the cable and go to streaming benefit or hurt Clearfield or are the effects mostly neutral? The cutting the cord is bad for cable TV for the cable TV provider. The it's but anybody who is cutting the cord is is only cutting the cord for content. The what they need is they will always need Internet. Internet is delivered by fiber. The that's great for Clearfield. I actually think it's more than neutral that it's beneficial in that, you know, individual service providers who are losing subscribers need to look for ways by which to expand their revenue per line, sir, per Internet option. And fiber has been proven to allow that service provider to earn more per customer so that there's the revenue per subscriber unit goes up. So I see see it as beneficial, but I can understand the challenges that some of our providers have in regard to cash flow. So it's you know, you don't want it to happen too quickly because all of these subscribers need a mean, or all of these company service providers need a funding mechanism by which to continue to invest in their networks. Yes. And there's none other pending right now, but I'll I'll take the opportunity to ask you a question that we get questioned on occasionally. But can you talk about our capacity and our ability to respond to more demand, where we sit as far as levels of investment into that for a growing market? Thanks, Dan. That's great to point out because Dan and I do a lot of investor calls, a lot of investor conferences. You'll find that we've done those now by don't have to be on an airplane. We can do a lot more now because of the fact that we do them by Zoom. In regard to capacity, we're in a really good place. We've made some investments over the course of the last few years by which to grow. A couple of last year, we added a second facility in Mexico, which is actually not far from the first. It's actually just a few blocks. So it allows us to have multiple resources, but yet limited overhead in regard to extra management. The and we've made a investment in not only personnel, but in the capacity associated with supply chain and the materials that we're going to need. So we believe we can respond to the community broadband initiatives. We have good Asian sourcing partners as well. So combined, I think we're really positioned to scale. If you go back to some of the legacy conversations that we've had over the course of the last ten years, Clearfield has been designed to scale from the very beginning. That was the orientation behind our product line. The cassette is designed in multiple units, and then we take that cassette and put it into other types of enclosures as you saw, you know, on the video today. So that feeling orientation has been crucial to fulfill today, and it will continue as we move forward. And the back to you. Go ahead. No. I I just got a question for you. Mhmm. We talked a lot about what we're selling and what we're doing, but how about our how about our workforce? I would kinda call out to our to you, your your management, all the salespeople, production, and support. I think what I've seen is an unbelievable spirit by all the employees. Take take credit, take charge, and everybody is a salesperson, always for. That's evident by our participation rate for our stock employee purchase plan. I think that's a very strong vote of support. Yes. I couldn't concur more. The employee community at their field, I mean, we believe, you know, we believe black and blue. You know, Clearfield, we enjoy working with each other. We've they've absolutely responded phenomenally in this COVID world. We continue to dialogue on, you know, a weekly basis. We have all company meetings. So, you know, commercial for Zoom, I mean, it's been amazing to be able to have hundreds of people on a call at a time and be able to keep everybody connected. And it's also been, I guess, a commitment to ourselves that this was not going the COVID world was not going to stop our investment. And so not only has our revenue growth accelerated, but we continue to add not only production employees, but key employees for the ongoing growth and scalability of the organization. So we're adding engineers, we're adding business analysts, we're continuing to expand on our procurement programs. And we're doing the ads for these personnel on a remote basis. So I have a we currently are doing a we do onboarding of new employees, and we've been a little bit negligent about some of the kind of initial product training. So we're doing a little bit of catch up, but there are 17 employees this week going through onboarding. And these are both Mexican employees as well as US employees. But what continues to just be a phenomenal vote of gratification is so many of the employees that we're adding are are engineers or are degreed individuals, and we're attracting these individuals because of the brand recognition that Clearfield has in our market. So I couldn't be more proud of the employees that work for us and the community that we've built. Sherry, I'd also say that our retention rate is so well. For employees, we did have very little turnover and and there are opportunities for advancement that are great. So somebody will start at a lower level and and work themselves up to a a better position. Absolutely. Could you add a couple more I'm sorry? Yes, there are a couple more questions, okay. One is a follow-up to capacity, and then there's another one following that. So can you speak to the capacity and your ability to meet extremely strong demand that might exceed our internal estimates? For example, how high a revenue number could you reach without adding additional capacity? Yes. Well, we have room in all of our being able to increase, we're not a capital intensive organization. So even expanding our level of manufacturing has never been capital intensive. If you look at Clearfield historically, our CapEx spend has been a couple of million dollars a year. So we've been able to incrementally grow as we move forward. In addition to that, some of our supply chain partners are a pivotal part of being able to continue to work with us. If you go back to some of the legacy things that we've talked about is that we don't if there's something that we can manufacture elsewhere or use a partner by which to do that, we have made that happen. So it's really a combination of outsourcing, contract manufacturing and then bringing into in house what we do better than anyone else. And so as a result, I think we're very well positioned to be able to grow with demand. In addition, we're working towards supply agreements so that we can try to get some level of visibility of what's happening moving forward. The we have a company have always prided ourselves on not only a short lead time, but an extremely high percentage of on time delivery to the lead time that we promise. And so as a result, that gives us the need to respond quickly, but also really pretty good visibility as to what is anticipated moving forward and a commitment to make that happen. So we've had the pleasure of being able to be together today for almost an hour. Unfortunately, it's not the traditional way that we do things. But as I think we've tried to communicate and provide that is our loyalty to our shareholder base and the fact that we don't take your investment in Clearfield lightly, We believe that we need to earn it, and we'll work to continue to earning it every day. Thank you for your questions. I want to be able to hand it back to Ron. If you have any additional questions, text line will continue to be open, and we'll take those questions and respond to you at a later time. At this point, I'd like to turn it back over to Ron for a closing statement. Can you do I have a video now? Yes. I think you do. Okay. You just need to click on the video bridge if you want to see it, but you're on. Alright. Okay. Thank you. And thank you all for attending our stockholder meeting today. Hopefully, you have a better understanding of Clearfield. If you need more information, please go to our website at cclearfield.com. This will keep you up to date with what's happening at Clearfield. We believe our future is bright, and we are dedicated to building a better broadband with a solid financial statement, innovative products and services. This combination will meet the needs of our stakeholders, employees, customers, suppliers and shareholders. We know who we are. We know where we are going. We started small. We've grown tall. Thank you for being with us today. You're welcome to join us in our journey. Thank you.