If there was supposed to be an ebb in momentum at Telect Inc. when the telecommunications equipment maker spun off a division in June that employed nearly 130 people and had annual sales of $9 million, someone forgot to tell CEO Wayne Williams.


Back at the office recently following a quick family vacation and a trip to Guadalajara, Mexico, to christen Telects newly expanded manufacturing plant there, Williams was juggling the details of the companys next big moves.


Telect plans to break ground soon on a 35,000-square-foot expansion of its sprawling Liberty Lake headquarters and main manufacturing plant. Office space is so tight there that new offices are being constructed on the manufacturing floor, and even Williams is being pushed out of his regular office to make room for one of the host of new executives Telect has hired. The companys boardroom is being remodeled for Williams use.


Next year, Telect plans to open a manufacturing plant in China. It hopes separately to firm up by year end its previously announced plans to open or acquire a plant in Poland. It also still plans to open a customer-service center in South America that would be similar to the one it currently operates in Great Britain.


Despite the spinoff of its contract manufacturing division to Logan Industries Inc., a new Spokane company owned partly by longtime Telect executive Harold Alexander, Telect expects to meet the $150 million annual revenue expectations it had set for itself late last year. The divestiture also didnt slow employment growth at Telect. The company already has made up for nearly all the 129 employees here who transferred to Logan as part of the spinoff. It now employs 831 people here, and 1,035 worldwide, compared with 837 here and 1,022 worldwide at the beginning of the year. Telect expects to add another 133 employees by the end of this year, giving it 900 in Spokane and 1,168 worldwide.


Telect also has been rumored to be making plans to go public. Williams says that while its true the closely held company has been putting in place a management team capable of running a public company, and that its now training to be one, Telect lacks one ingredient for an initial public offeringa reason.


We dont have a need, says Williams, whose parents, Bill and Judi Williams, founded Telect here in 1982. We dont have to go public. Weve got capital. Were profitable. Were adding people as fast as we can. You have to have a compelling need.


That need, he says, eventually may be triggered by Telects desire to acquire technologies, products, or even talent that would complement its current offerings, perhaps in connection with an acquisition. Telect currently isnt targeting any such acquisitions, Williams says.


Interestingly, he says that acquiring a company primarily to absorb the merger partners employees is now a real possibility in the high-tech industry, in which there is a shortage of skilled and professional workers.


Like most technology companies, Telect has had difficulty finding the technical people it needs to grow, he says. In the past year, it has moved about 20 technical and engineering hires and their families to Spokane, and currently has about 70 openings, more than a third of which are for professional/technical people.


Though Telect is expanding globally, Spokane remains the place where it develops and launches new products and is where most of its growth in engineering-type jobs will occur, Williams says.


The Guadalajara plant, which Telect opened in 1997 and doubled the size of this year, employs about 170 people, but is expected to employ as many as 400 workers within the next 18 months. Most of its production, about 70 percent, consists of components that are shipped to Liberty Lake to become part of finished products made here and then distributed globally. The other 30 percent is completed products that are shipped from Guadalajara directly to customers in Mexico and elsewhere in Latin America.


Telects operation in Southampton, England, a 15-person customer- and technical-service center, opened last year. Elsewhere in Europe, Telect has been contracting for the past six months with a manufacturing company in Poland to make some Telect products destined for customers in Europe, says Williams. Telect still plans to operate its own plant in Poland, but hasnt decided yet whether to open one from scratch or acquire one thats already operating.


Meanwhile, the company is exploring possible relationships with Chinese manufacturers and also expects sometime next year to open its own manufacturing plant somewhere in China, Williams says. He says its too early to know how big the plant would be or how many people it would employ, but says it likely will be similar to the Telect plant in Guadalajara.


Currently, about 20 percent of Telects sales are to customers outside the U.S.,Williams says.


Overall, Telects sales this year are expected to grow more than 20 percent, to $150 million, from about $122 million in 1998, despite the Logan spinoff and any remaining global effects from the Asian financial crisis.


Divestitures


Telect increasingly is trying to narrow its focus back to telecommunications products. In addition to its former contract-manufacturing division, the operation that was sold to Logan and which provides assembly work for other manufacturers, Telect over the years also has branched into other business segments that use its expertise in fiber-optic and copper-based cabling and patching gear, including in security and audio/visual signal management.


Last year, Telect sold off its control-products division, which primarily provided security electronics to the corrections industry, to Calvert Technologies Inc., of Airway Heights. Its now discussing with a possible buyer the sale of its audio/visual signal management product line, Williams says.


Those moves will help Telect concentrate on its core products, he says. Two years ago, we couldnt really say what we did. Now were strictly a telecom company.


Building plans


Telect hopes by first frost to have footings in place for the planned, 35,000-square-foot expansion of the office portion of its headquarters facility, which already includes about 110,000 square feet of manufacturing space and 46,000 square feet of office and other space. The expansion will be built off the west end of the building, where an employee parking lot currently sits. To make up for the lost parking, the company will expand lot on the south side of the building.


The expansion will have two stories, though because of the terrain it will look as if it has three floors on its south side. It will have a brick exterior to match the rest of the building. A cost estimate for the expansion hasnt been completed, but ALSC Architects PS, the Spokane firm thats designing the expansion, says the project likely will cost between $4 million and $5 million. Leone & Keeble Inc., also of Spokane, will construct it.


The structure, which is expected to be completed next summer, likely will be the last expansion of the current Telect building there, though the company owns another four acres of land at the site and could decide later to build another, stand-alone facility on the campus.


Telect spent $7.5 million to expand its main facility by 120,000 square feet in 1997.


The company also leases about 120,000 square feet of manufacturing space in two buildings at the Spokane Business & Industrial Park. Some of that space had been used by the operations that were spun off this year to Logan Industries, and thus currently is being vacated, but Williams says Telect will hang onto the space since its manufacturing space needs often change quickly.