More information is available on an older SI board for FBCE:
Subject 24005
Here's what I think I know. You should feel free to check it against the company web site at fibercoreusa.com or visit Charleton yourself. I know folk who have, and they were impressed by management's honesty and forthrightness.
FBCE is headquartered in Massachusetts in modest executive offices in a sort of industrial park. It is said to be one of the only, if not the only, independent manufacturer of optical fiber and preform for the telecommunication and data communications markets. However that may be, the company's standard description is its products "are available in single-mode and multi-mode designs, and are ideally suited for Feeder Loop, Fiber-to-the Curb, (FttC), Fiber-to-the Home (FttH) and Fiber-to-the Desk (FttD) applications".
In early 2000, FBCE reported its first quarterly profit and projected the whole of FY 2001 would be profitable. To date, all company earnings forecasts have been pretty well met.
The company has enjoyed a close relationship with Tyco International from the beginning, and by mid-2000, Tyco had agreed to exchange creditor instruments for FBCE common shares and warrants, in effect upping its equity stake in FBCE and gaining one or two board seats.
All present production facilities are overseas in Jena, Germany (1 old plant, 1 being built) and Campinas, Brazil
(an ongoing plant recently acquired). The company has said repeatedly that it intends to expand by acquiring or building additional plants, the next ones most likely in Malayasia and perhaps North America. The Malaysian adventure was put on hold during the Asian crisis, but at least twice last year the CEO and former CFO traveled to Southeast Asia, presumably to further negotiations. Additional trips are known to have taken place to the Southeastern U.S., although whether to scout plant sites or additional financing is unknown to me.
FBCE's CEO once worked as an engineer for Spectrian (sp?) which is now more or less a Lucent sub. He or the firm hold a few of patents relating to the manufacture of single-mode fiber optic strands. The patents purportedly make the manufacturing process easier, faster, more efficient.
I don't know that FBCE's technology or manufacturing patents give it a competitive advantage -- they well might, I just don't know. But the original business plan was clever and well-timed. As it appears to me, the company took early advantage of the reunification of East Germany with West Germany and used favorable financing opportunities to acquire the East German plant located in a city famous for its many generations of skilled glass makers. In effect, FBCE got its start buying a state-owned plant and presumably improving it with American manufacturing know-how and broadening access for its products to world markets.
The most recent news comes from Brazil about a 5-year "take or pay" contract which seems to confirm that FBCE manufacturing capabilities are strong and growing.
Overall, fiber optic cable demand, it is widely believed, will continue to expand for the next four years or more.
My own hunch is FBCE may be seeking to replicate its Jena success in other developing countries. First, find a country whose government is stable but whose manufacturing capacities are under-utilized. Then, find a locale with a work force skilled at glass manufacture. Then negotiate a favorable, win-win, below-market grant-and-loan package to acquire or build the plant with that government's backing, offering modern manufacturing techniques, employment opportunities for the locals, and sales into overseas markets.
The stock price has ranged from around 50 cents a share eighteen months ago or thereabouts to as high as $11/share, all while it was listed only on the bulletin boards. Since the first quarter of calendar year 2000, it has rarely fallen below $2 a share and mostly hung around $3.50-$5.50.
Last Fall, FBCE qualified to begin trading on the NASDAQ Small Cap exchange. |
