OCC - Earnings call transcript Q1 2018 | Optical Cable Corporation

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Operator

Good morning. My name is Laurie, and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation First Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer period. Instructions]. [Operator you. Thank Mr. begin may Palash, your you conference.

Aaron Palash

copy and on participating morning, call. today. this have all issued press year for Cable Corporation’s By a should everyone you Optical time, the first earlier conference earnings release Good XXXX thank of quarter fiscal of

also can for a You copy. www.occfiber.com visit

Financial today Neil and Vice Senior Tracy President call Officer. Chief and Chief the On are Executive with Smith, President us Wilkin, Officer OCC; and of

statements forward-looking statements we Optical this contain on including, the the Before statements materially morning’s to, I’d referenced call The number Neil apply uncertainties. risks the remind as like Cable of a www.occfiber.com in not the factors factors please of those to differ over contents turn of as involve that everyone Wilkin. that, Internet I’ll forward-looking that Neil, With actual begin, to may of begin. due results today’s These and to limited but and call call. webcast risks section this to well cautionary press may future Corporation release.

Neil Wilkin

results then months call additional the and many XXXX detail. fiscal Thank the we will answer year your begin remarks, quarter opening will with Tracy some our a everyone. as period of few XXXX. ended will I January Aaron as good remarks quarter of three morning first regarding can. you, for and today the first review we XX, After Tracy’s questions

questions will we take practice, from and normal only Q&A our during is session. institutional analysts As investors the

included press announcing time call. also in submissions submit call. and regarding questions advance our of offer of opportunity release are earnings we other Instructions to date our However, our such the the shareholders in

with start pleased XXXX. year to are fiscal strong our We

meaningful significant top-line to set year when to net and sales the take quarter a quarter, growth. fiscal steps first targets meaningful an X.X% increase of gross first for growth make aggressive in with and profit increase compared our continue achieve gross profit to growth XXXX. in drive this During We we - sales and XX.X% achieved

marketing We continue efficiencies, targeted to strategic execute taking markets, on and and to new operational team hires. our steps accelerating our with strengthening initiatives in sales strategies, increase

Our new also opportunities customers’ capture needs our evolving continues. efforts solutions is to about and meet

in markets been are in military product our development market encouraged as result many of as years. that example, of as seeing our well to have demand In increases under recent increases specialty a increased by for pressure we improvements, are market We due and the efforts. new

load our the backlog load end at particularly year quarter, forward sales weeks for order throughout and cable the between products. backlog $XX the Generally, three consolidated OCC’s and or second forward high to our of approximately million. sales At XXth, net was order fiber $X approximately backlog the the and end and quarter four million of February forward of varies Our sales million. optic into order first $X was load and sales

year. As year believe is a the same compared period result of XXXX during we increase again net when to that last quarter second sales at significant this see we will it fiscal in the likely time,

that of and are mindful make growth. our be expenses to we investments in personnel continue we We initiatives as appropriate future for necessary believe

quarter results. that, positioning our Tracy improve strategic focused this Smith call the turn of We And the execution on I to specifics will first over building are success momentum now through important we of results our financial confident for we OCC that to will bottom-line review regarding further are top and are on plan. and who with some our

Tracy Smith

our compared sales first first the period This $XX.X net same specialty in net first markets. fiscal Net net the fiscal to for sales the partially XXXX, decrease compared customers quarter the net XX.X%, States enterprise of million a customers the Thank you, period the in increased year Neil. in sales was our particularly the Consolidated compared year. the carrier to of by quarter sales of in offset to wireless quarter increase and sales same markets last fiscal military to sales and XXXX, markets. same fiscal an XXXX States last XX.X% of United first last were million, XXXX. increase for of net to increased United XX.X%, in in in our the increased of $XX.X year, of outside to We period compared quarter

profit. of was in fiscal profit fiscal an million in the fiscal margin $X.X profit percentage to of quarter quarter XXXX, XXXX, net the quarter XXXX. first gross gross first of million quarter XX.X% Gross in Gross the in profit a the sales of was compared of first fiscal compared of to $X.X or Turning increase to first X.X%, XXXX. as XX.X%

sales. shift fiscal of gross or per increased sale to XX.X% the the same first mix first fiscal quarter recorded margin of fiscal diluted of in quarter $X.XX $XXX,XXX net first XXXX, of X% a employee-related compared or in as Gross a increases impacted expenses per the share profit new net and compared XXXX XXXX, quarter the margin fiscal $X.X in XXXX. fiber to XXXX was in a same loss for XXXX, in towards increases due to net compared and $X.X mix margin of period $XXX,XXX objectives, a accomplish $X.XX in to fiscal million basic expenses of diluted are Our to in of optic XXXX. quarter in percentages sales fiscal the to profit The quarter due added dependent for for upon costs, net of period hires quarter fiscal OCC loss fiscal a the share certain million increase of to last strategic XXXX, basic first compared quarter period heavily fiscal of and expenses percentage the compared quarter SG&A cable XX.X% the XXXX. SG&A commissions including was year negatively SG&A first product first primarily same the the to last the basis. product selectively quarterly year. increase on to were during in of for products the the of lower during by first primarily first

January our credit XX, had borrowings we of credit. on note $X.X XXXX, million revolving in million available and As $X.X outstanding of

We also had outstanding loan balances term loans. million of $X.X our estate real under

end to mentioned, trailing on sales forward months or XX sales order our weeks Neil XX As million, net backlog the load at a and basis. was approximately February of $XX XXXX XX of

in the purchases working of to revolver shipments short-term back we result believe and load Neil. materials accommodate process and a capital timing payments between the forward significant related the on increase our of As required and these our orders, on on are of receipts increase backlog I bank what differences our availability that, working with we to will turn to to With over will call requirements. be to

Neil Wilkin

answer And you have, you instructions happy we questions questions, call they in it. Operator, participants to them. now if please Thank any could I indicate would the appreciate may any are have Tracy. you, if for our to

Operator

[Operator question first Anthony Instructions] Marchies. from Your comes [Ph] the of line

Unidentified Analyst

backlog. profit would the terms �� margin, you results. margin, Hi, lower-priced characterize Is help? Question good potential that margin? morning. Nice for you higher lower Can it of backlog in regarding sales the

Neil Wilkin

a do of Yes – of mix. products that little lot of a in we it’s but wouldn’t to lower - a bit detail, that backlog have lot we be a provide generally, tend

backlog, to will be orders contain on specific can some those of our and a of of price we sorts in on margins for going-forward optic this products, you know of make to the and I power copper the – We that power we copper into pass – mix that With backlog and be the that do lower optic fiber tell harsh since course, hybrid But both the series cables respect are lower cable, connectivity whole component. more circumstances be cable sales fall purposes to our margins a includes of part of enterprise – cables being on of a that don’t include some environment markets. our our that any does optic expect fiber products have margins. substantial what include for certain time. I products through of basis And those fiber numbers to a element at in cables more and and tends have copper like of category so our

Unidentified Analyst

and year? is the positive And it Okay. final net be question, possible for second income that you could

Neil Wilkin

control to We’ve going make on focused that’s any wasn’t projections, some made saw to what a I imagine. we expenses. we are our would markets but as specialty when you weakness in steps doing

as expenses long-term, continue save on focusing are our some as try we those we’ve market sales initiatives, money. initiatives investments will as keep some made and also to other under control. We to we expanding at believe well But

intention. our on the of back So and that’s mind our always that’s always

Unidentified Analyst

right, All Great. thank you.

Neil Wilkin

don’t you who me are asking, with? if Anthony, you mind

Unidentified Analyst

Just, private a I am investor.

Neil Wilkin

you. thank Okay,

Operator

no the further now this audio are I call At Instructions] [Operator will questions. time, Wilkin. to there Mr. turn

Neil Wilkin

there submitted Aaron, questions at you. any are investors have other investors, this Thank time? individual from we individual

Aaron Palash

Neil, this time, by questions have shareholders. individual do any we at submitted not

Neil Wilkin

Well, call listening conference today. thank our quarter would Okay. I to everyone first like to for

Thank we your your always, appreciate interest As time and you. OCC. in

Operator

quarter for you in Corporation first participating Cable Thank earnings the Optical XXXX conference call.

now may disconnect. You

Optical Cable (OCC) 12 Mar 182018 Q1 Earnings call transcript