Close your eyes and it could be the high-tech glory days of 2000.


Telect Inc. CEO Wayne Williams is talking about the challenges of getting product out the door fast enough to meet demand. Desperate customers are calling to say theyd pay two or three times the asking price for Telects products if their order could be put at the front of the line. A 20 percent sales gain for the year already looks to be a sure thing.


But this is a much different time.


Today, Williams is sitting in an austere office in the companys unassuming new quarters, a 52,000-square-foot former manufacturing plant built to supplement Telects growing campus during the companys breathless roll of the late 1990s. It sold its stylish, 200,000-square-foot brick-and-glass main building nearby recently to Spokane-based Itron Inc. Itron needed more space here; Telect doesnt.


Back in 2000, with annual sales pushing $270 million and more than 2,300 employees on board, the majority here, Telect was constantly scrambling to add buildings and workers. The tech industry it was serving was flying high and there seemingly was no end to the growth.


Now, five years after the bottom dropped out of the market and Telect shrank to about 600 employees and $60 million in sales, the Liberty Lake-based maker of telecommunications gear approaches growth much differently.


It no longer does any manufacturing in Liberty Lake. Its products are made at its plants in Plano, Texas; Guadalajara, Mexico; and Wroclaw, Poland, as well as by numerous contract manufacturers as far away as Asia. As needs arise, its now willing to outsource everything from marketing to engineering. Telect now is committed to being lean and agile, contracting for more production capacity as needed, rather than taking on the risk of growing its own labor force as it once did, says Williams.


You dont try to do it all yourself, he says, adding that during the late 1990s, the company felt obligated to grow its operations internally, to support the communities in which it did business, especially here.


With the changing markets, tighter margins, and stiffer competition, technology companies simply cant afford to do that any longer, Williams says.


Now we outsource when we need to, he says. We watch our supply lines. You dont want to overshoot. We position ourselves to be able to respond quickly.


Telects work force is growing again, just more modestly, and not here. The company now employs about 830 people, including some 115 at its headquarters, which house just administration, sales and support, and research and development. The company currently has about 30 positions openbut most new hires now will be located at its other facilities, and overall employee growth wont equal the pace of its sales growth, Williams says.


Telects Plano plant, which it added in 2004 through the acquisition of then Santa Barbara, Calif.-based Hendry Telephone Products, currently has 191 workers, up somewhat from the time of the acquisition. The Guadalajara plant employs about 400, well down from its peak of 900, but up from two years ago. Telects plant in Poland now employs about 95, down from 270 when the company bought it in 2000. Telect also still operates a small customer-service office in England, which employs six people, and has about 20 outside salespeople.


Telect will consider making more acquisitions, Williams says.


Maybe it will be a Spokane company, maybe it will be based elsewhere, he says. Maybe well bring the operation here, maybe well leave it where its at. We just dont know.


As Telect shifted production from Liberty Lake to other plants, contract manufacturers here that had made components for the company lost business. Williams says Telects goal was to have all manufacturing moved from Liberty Lake by last year, but it ended up taking until about February of this year to complete the transition.


Surging sales


Last year, the companys sales climbed a healthy 19 percent, though some of that growth was due to its purchase of Hendry, which makes telecom racks, cabinets, and other infrastructure. It was in 2004 that Telect saw its first sustained growthabout 7 percentsince the telecom bust.


With last years gain, Telects sales were back up to about $80 million, and they are projected to jump another 20 percent this year based on growth expectations.


In another sign of Telects recovery, Williams says hes currently interviewing candidates to fill the long-vacant post of vice president for sales and marketing. Williams took over that role about two years ago when the executive who had held that position resigned.


Williams says the market finally is rebounding nicely. Most of the overabundance of telecom inventory available in the market after the crash has been absorbed now, he says, and increased competition means that telecom players ranging from telephone companies to wireless operators to cable-TV providers now are spending heavily to steal customers.


The big new ticket is video. Spurred by demand from younger consumers, companies are scrambling to meet sharply rising demand for video downloaded via the Internet and even wireless networks.


A lot of the excess fiber trunk lines laid in the telecom industrys overheated days are still underutilized, Williams says. Now, however, companies are working to connect homes and businesses to those lines, and thats where some of the new industry growth is coming from.


Telect makes equipment that interconnects different types of communications lines, and provides power to such equipment. It also now makes the racks that hold that gear. As telecom players scramble to provide integrated broadband, they use such equipment to expand their networks and connect new systems to old.


Everyone is competing with each other, and they have the cash to buy infrastructure to steal other players customers, Williams says.


He says that while international sales were providing Telect with most of its growth a couple of years ago, sales to domestic customers are growing briskly again. Right now, its across the board, even into Asia, he says.


Now that Telect is making racks and other infrastructure gear through its acquisition of Hendry, Williams says it has a better barometer for near-term sales, because customers often will buy the racks first, then the gear to put in them.


Currently, rack and cabinet sales are very good, he says, adding, That has really climbed in the last 90 days. Its scary really, in a good way.


As rapid sales growth returns to Telect, this time it is better prepared, and smarter, Williams contends. When its sales plummeted with those of the rest of the industry following the collapse of the dot-com boom and the terrorist attacks, the company laid off about 75 percent of its work force in painful phases.


The tough times we had really caused us to focus, he says. Our company moved forward more in those four years than it did in the 17 years before that. We came through that time with the same market share, and more product lines. We were one of those that survived.


Contact Paul Read at (509) 344-1262 or via e-mail at [email protected].