OCC - Earnings call transcript Q1 2020 | Optical Cable Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Cia and I will be the conference operator today. At this time I would like to welcome everyone to the Optical Cable Quarter 1 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions] [Operator

this Aaron like sir. Palash. At conference turn I to over Please time, you. to would the Thank go ahead

Aaron Palash

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

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

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

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

that, Wilkin. Neil, over please to I'll Neil call begin. turn With the

Neil Wilkin

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

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

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

coronavirus the issue Let in me biggest acknowledging start the pandemic. news today by global the

to officials. safety employees additional health operate precautions facilities recommended employees health the local of utmost we by as our are of manufacturing continue the as federal normal, our and importance and While take our encouraging is to and

necessary partners, of meetings our protect have We travel, our and the to impact face-to-face limiting business around to actions encourage appropriate. the to and others communities. closely take are continue will appropriate. And we and appropriate will pandemic as distancing, we our actions limiting Like to continue steps or as taken take the world, monitoring local employees, social additional

are and focused continuing comprehensive meet control. the solutions said, can base. needs This broad customer we includes what to on and we provide That evolving of our innovate diverse that

first me to put in quarter. turn let production our certain Despite markets, results progress our of in increased from the facility. stability at on that, reduction the of work markets. year, of core and With last the fiscal cost we the production our for our quarter our our improvements end results achieved made through volatility reflect for Building initiatives Roanoke efficiency on

the sales While expect quarter realize as our fixed and leverage the to during of offset initiatives we increase. these efforts costs these operating benefits

operational excellence ahead, we execute increase quarter. drive far seeing so in to our when activity to to compared our aggressively are continuing first remain of operational sales enhancing markets the enhanced committed sales We we to Looking are increases our to And efficiency. and in to value strategies shareholders. deliver on certain

the turn results. I'll review call our fiscal year quarter detail that, to Tracy with some XXXX in And Smith, additional who will first over financial

Tracy Smith

year-over-year first sales of in year did XXXX. recur orders was of due in XXXX number sales quarter a XXXX. first at first the carrier wireless not that fiscal Thank sales Consolidated the $XX.X of quarter quarter year large fiscal first The same quarter net levels the compared you, million fiscal the to the decrease one customer net from in market to of million Neil. of net $XX.X in fiscal were for of the XXXX for primarily

fiscal of net as XXXX this in this from quarter customer first first the $X.X compared decreased to fiscal sales quarter and from of sales volatile year-to-year. had been Historically quarter-to-quarter million XXXX. to to customer Net the

first of fiscal sales year costs XXXX. XXXX, offsetting sales as production in percentage lower fiscal profit, XXXX. or of was substantially throughput reductions when million XX.X% and $X.X the significant profit cost The of was first quarter the in first gross XXXX quarter profit the fiscal compared fiscal production quarter fiscal compared Company's over quarter facility. and was Gross of by net efficiency to Roanoke compared production a lower gross gross margin to profit in of spread to the XX.X% of to Turning first profit achieved total of fixed quarter first margin in gross being the the in the XXXX $X.X impacted first quarter improvements in principally XXXX, fiscal million

to XX.X% other the million cost for result initiatives. of positively of first The by production decreased decreases million to compared period fiscal the primarily last SG&A XXXX, expenses quarter year. employee-related SG&A in $X.X same the during expenses decrease costs, also impacted but $X.X was was in

or $X.X or of the of for of million diluted per net $X.XX XXXX. basic net a diluted million and quarter compared of recorded $X.X share loss per first XXXX, fiscal and first a OCC loss quarter to $X.XX the fiscal basic for share

with accounts first the net to including accrued X. quarter ending million payroll activities payable of and a taxes and $XXX,XXX operating of OCC year $X.X of X.X current During provided while quarter achieved fiscal compensation accrued cash XXXX, ratio first by the by reducing expenses

XXXX into the the and for quarters fiscal modify Subsequent current remove April ratio total XX, the ratio ended to January January fiscal XX, loan XXXX. quarters to liabilities and tangible ended The quarter modification to of April was covenant with agreement. our end, XXXX ending financial XX, purpose fiscal XXXX remove our ending our for and credit XX, the agreement worth to net agreement lender we to the a entered

expression the by it the before a to would it or to with relating March to agreement revolver credit financing by principal the the interest XXXX similar before or loans. a would OCC XX, engage a financing the term closing $XXX,XXX OCC on refinance in by affirmed to that of also XXXX thereof by real faith similar XXXX. reaffirmed, of outstanding or letter on outstanding X, planned enter combination continue XXXX balances May and XX, negotiate XX, the equity reduce under or June April into balance reducing commitment letter aggregate on intent estate good commitment

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

we additional XXXX credit in have made borrowings year note our third on $XXX,XXX XXXX our available XXXX. January quarter our have fiscal as revolving any We July not revolver since on ended and XX, XX, credit of of

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

Neil. back call With that, I will to turn the over

Neil Wilkin

if they questions the are analysts could and Again, we answer instructions it. to any have institutional them. would appreciate Tracy. call And only participants from live Cia, if now, you our happy in you, we you are I questions may for have to investors. questions any Thank please indicate taking

Operator

I'd are at this time. over to Mr. no there And it Instructions] responses to [Operator like Palash. turn

Aaron Palash

Actually Neil, we Neil. – so – ahead sure. Go

Neil Wilkin

So thank you Aaron.

to those. go if to respond ask if you You see ahead and was – to we writing if received questions questions were to check and going could in we'll have you we any going have read

Aaron Palash

few call by questions Yes. the submitted shareholders. advance of We non-institutional have in do a

reduction executive reduce SG&A The headcount, how expenses Board compensation? in and by commissions officer do is, you first of XX.X% reduction sales one

Neil Wilkin

build efforts. for efficiently of reducing and quarters those OCC, a one been for continue priority to we focuses cost. So, the high It's and on has our past operating been several

While primarily cost it a of the also result significant the employee-related reflects SG&A other of initiatives. portion decrease was our costs, reduction

Aaron Palash

Great. Roanoke production issues Have the with been resolved?

Neil Wilkin

time quite and some We've they been been this We focusing we it. resolved. believe keep to for on have on that our eye continue

noted we've in that realize those We believe continue as increases, we've to and we'll the that improvements as completely efficiencies throughput past progress see made. make sales we and substantial and fully

Aaron Palash

the press markets. in impact at Will Do a sale increases certain elaborate? XG seeing expect The release you there our to a future? activity you XG referred Okay. Is in impact? of

Neil Wilkin

many, As did many our participate in volume in that markets. and know We busy. has shareholders us keeping in order different early increase been February see we

time. buildout industry. We in able is will to course we the be continue our of at will that in do occur those markets for driver that to at us believe OCC believe XG participate that on position the be XG steps we going growth we've specific are strength do seen of commenting continued the not and this a to And that market. to take best We

Aaron Palash

Okay. and sold Well what log? your was backlog

Neil Wilkin

our don't disclose typically and we forward backlog So, load.

to orders quarter. the been -- And saying hadn't why this first increased projects I and increase compared until what we the that activity seen see we've the part quarter, during said, in were with large in we As seeing works were a that orders the that were an did sales to in placed. first converted was we've reason we believe, February February. but activity the even of that's extent into And first

Aaron Palash

Okay. What revolver? on is availability the your current

Neil Wilkin

talk about You want to this Tracy?

Tracy Smith

Sure.

my in on comments, earlier the current revolver mentioned the is availability I As $XXX,XXX.

Aaron Palash

coronavirus expect it of intent is it. within Got weeks? reasonable of the In turmoil, to a light two letter

Tracy Smith

have completing continue work working XX intent with letter expeditiously a been of XXXX. goal the We to and by March of

Aaron Palash

cannot XX if have you contingency meet plans, June Pinnacle? with you the Do deadline

Tracy Smith

XX. on always the focused by We That on said, are that always is working contingency completing we planning June - we that something we agreement are do. and typically

Aaron Palash

you emergency receive Might funding? coronavirus-related

Neil Wilkin

I the to take us At we can't too case that, that be I'll think one, and that point, it's will speculate. this Aaron. for know early really

then other what's ensure monitoring by as actions Of as OCC federal which the taken to going the will crisis. the and are we position Congress actions the by that course best states we in operate we on in during be government taken well

Aaron Palash

coronavirus a you China be in supply needs Can impact a that sourced? review component delays, on Are chain? and if you project sales anticipating can't

Neil Wilkin

been So far, very we've fortunate.

our are continuing impact focusing will be not less closely the have monitor the less our minimal. sales can a what and chain others, on have our on date And we to than might -- has the Like there we sales we some very any given other there and on business, industries. nature been impact hopeful supply on that control. situation are we'll of We very, on seen to impact be

in reminder, -- obviously, our also ready with have to are we think, of trouble all of supply as three stand say U.S. our manufacturing that in And I they our facilities the customers manufacturing other I'd a event suppliers. based their the any

Aaron Palash

you in OCC customers Yes, interest locally good rather increasing a by an your Do see sourcing products? segue. that's than importing through

Neil Wilkin

But Asheville, moment. that near the in with in and in United the plant our happening near we plant as specific Texas; indicate manufacturing that's all a I of Dallas anything our a Roanoke. seen haven't at located have Carolina; here facilities -- We States, Plano, North we said, that plant would course

an arise. do may that us not should ability gives be to ways available need supply to. are able And that in so we that And to others the

Aaron Palash

uncertain selling you question, in consider Company And the would last Okay. these times?

Neil Wilkin

value. shareholder case Of is the the always whatever course to open-minded course, been that to comment continue to are we've it exist. value. maximize the and of always sort But be place to on exists going action are case. growing in doesn't said would create That's our M&A been we best never that will any the got that believe shareholder whether those plans plans And us we've strategic of focused strategic it activity business and on where or enable we we

Aaron Palash

was That final the question.

Neil Wilkin

listening if I other quarter questions, to there's would XXXX first to our year Well, fiscal no Okay. for call today. like thank conference everyone

Corporation. always, your interest in Cable and we Thank As your you. appreciate time Optical

Operator

Ladies for and conference you today's call. in thank gentlemen, participating

disconnect. now may You

Optical Cable (OCC) 16 Mar 202020 Q1 Earnings call transcript