OCC - Earnings call 4 2023 | Optical Cable Corporation

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Operator

Good morning. My name is James, and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation's Fourth Quarter and Fiscal Year 2023 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 period. Instructions] Mr. [Operator begin may conference. your you Hoffman,

Unknown Attendee

Call. Good Thank all and and Conference you everyone, joining you, Fiscal us XXXX Quarter James. for Fourth for thank Corporation's morning, Optical Year Cable

copy By of earlier this should time, have today. the press release everyone earnings issued a

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

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

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

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

Neil Wilkin

Spencer, the Thank and XX, review call opening then will and begin periods full X-month some results October and remarks. detail. XX-month additional Tracy for a the ended I today year the with will quarter XXXX few you, and fourth morning, everyone. good

many Tracy's as After of answer we remarks, we will as questions your can.

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

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

successfully by our ability and year markets. strategies position, OCC's demonstrated efficiencies During to execute generated market in growth our XXXX, volatile strength of leverage our we fiscal navigate and the operating the

experienced markets. and financial particularly fiscal building certain volatility wireless XXXX Like carrier the significant enterprise markets in in on operational We we as and our in our strong, performance. started industry, softening a the demand delivering however, and year of strong momentum many others year and off progressed,

markets year. product measures fiscal margin year share. and diversified prior having by gross and our achieved includes income well as offerings, profit, operations profit finished from This sales, XXXX Thanks to the all earnings per growth net to as we compared gross

This Net increased growth XXXX sales year in XXXX. sales $XX.X XX.X% of compared million. for year year net fiscal to X.X% followed to XXXX fiscal fiscal

Our specialty despite net in product market the best growth diversification and of our sales enabled markets offerings achieving markets wireless to our markets. by certain offset with in year partially fiscal decreases carrier in us enterprise OCC our XXXX volatility growth achieve during sales and

the XX.X% decreased fiscal sales year compared half during same this fiscal is the cases, and the of X.X% Net of increased year XXXX, prior the In fiscal to year. during first during second XXXX. period half both

to fiscal also the year. the from and substantial in XXXX growth load backlog forward markets, sales our In year half net during our addition of we first specialty as benefited began the

improved to prior to we profit the XXXX, increased XX.X% to margin. during Gross gross and XX.X% profit profit fiscal XXXX gross during margin increased $XX.X compared year. During year million. profit Gross X.X%

increased was margin year and first efficiencies half year again, production that of are XX.X% OCC's fiscal Importantly, achieve XXXX, profit compared demonstrates gross the XX.X% leverage we fiscal operating half first to during this the strong of volumes. And able to our in at XXXX. production

were XXXX year as expenses net as SG&A sales including XX.X% We controlling fiscal during compared a continue to during XX.X% year XXXX. as and of operating And to focus percentage on possible expenses expenses. fiscal efficiently SG&A

grow, as to expenses company our net Our costs are tend slower rate SG&A sales sales. fixed increase expenses And a SG&A substantial. at including than public

connectivity optic copper and positioned industry. and We remains uniquely believe fiber OCC in the cabling

OCC enable compete larger and products successfully against application complete -- to strength and offer much and core top-tier capabilities differentiated competitors. Our to solutions

I'd like a year, quarter fourth our those moment strengths of capabilities emphasize what to call the to Since core are. is take this in the and end

loyalty enviable and relationships markets. our an and have the users with and customers, recognition, market of broad we decision brand our across makers of targeted a First, range position and end

often applications also that fiber competitors and deliver product connectivity cabling wide meet with range various are of and needs targeted and markets. OCC is and our enable customers' solutions solutions optic well range suited offerings for different targeted in and that markets. and a products copper our extensive, in unique The our of different have OCC's We competes OCC to successfully that products

we broad approximately selling XX and countries year. footprint, a have into diverse Next, each geographic

respected We property. application have to product well of and and development its sales and extensive industry create that business teams and engineering, products intellectual expertise portfolio OCC and innovative, OCC's experience their with associated for high-performance expertise, experience enables

significant our finally, build experienced supported the facilities our capabilities by manufacturing, cost Many engineering and and our along production and quality knowledgeable costs are is maintain capacity our fixed. company and with And teams. of at strengths public to

and that creates remain a tend levels. than increase fixed profitability rate sales OCC as at and net expenses costs leverage a OCC SG&A net profit gross stable fixed spread and sales. are net of As to higher faster for grows production result, relatively This operating sales, over

I'm accomplishments the during market OCC's year the fiscal team's the XXXX, volatility given industry experienced of the year. during proud particularly

the market we of production are efficiencies. and on XXXX, and conditions soft OCC's Looking we of ahead demand about to market time, operating our optimistic cautious At fiscal same are current impacts the year opportunities.

industry to To macroeconomic that adjustments continue trends necessary. believe business end, to as we implement we appropriate prepared and are monitor and changing

and while driving our remain for identifying our we value end on shareholders. focused executing growth, ensure and long-term growth ever forward, capturing operating Moving and efficiently additional as generating for to are users opportunities as customers we

to I turn results. fourth our financial additional that, and year who fiscal over XXXX will will detail quarter Tracy, the call review with And in

Tracy Smith

net fiscal were Thank you, sales of Neil. Consolidated net XXXX. increase $XX.X year million of an for XXXX sales fiscal for to $XX.X year X.X% compared million,

same period for million last the the for net compared year. XXXX fiscal decreased to to $XX.X Consolidated of of XX.X% sales quarter million sales net fourth $XX.X

load specifically half of from first that we increased We and net the during year sales XXXX, as began year, the than fiscal typical as fiscal higher sales order fiscal as XXXX. our year forward believe our benefited well in of backlog throughput levels production

increased Additionally, improved to to product effect. take began certain cover costs inflationary pricing

order to has XXXX approximately typical sales XXXX. to Our than end the year at the more compared and returned of fiscal levels fiscal million $X.X more year $XX backlog forward load of at million end at

year XXXX, were and our fiscal carrier sales During our in markets net in increases wireless but decreases the to increases last offset enterprise markets. we experienced year, by in compared partially specialty

markets, continue XXXX. there certain in we end believe of our markets, strength be year to We particularly of specialty as fiscal indicators our

our diversification industry, impacted our to fiscal pressures, during has year net uncertainties markets. our of While addition certain in in OCC were like and XXXX benefited from sales softening various product macroeconomic by others and targeted of the market risks

Turning increased to profit in profit fiscal margin, period to XX.X% million Gross of to the XX% $X.X XXXX or percentage to gross to net a in quarter last compared XXXX Gross X.X% fiscal gross XXXX for profit Gross profit in of compared profit gross year. fiscal to compared of increased million $XX.X XXXX. fiscal fiscal to fourth in the same XXXX. million decreased as $X.X $XX.X XX.X% sales in profit. million

as achieve higher gross tends the half in higher when year. fiscal leverage first was year to XXXX last sales net the our margin operating profit of Our be case we relative to due to

product specifically gross in margin profit also to the operating of leverage, fully as reflects dependent this efficiency, upon profit mix. well first the our as of fiscal heavily impact is positive addition changes in workforce. OCC's production the a In increased gross of impact more half XXXX, trained margin

XX.X% of SG&A the of expenses $X.X SG&A SG&A compared XX.X% in expenses increased to XXXX in net XXXX. year as million $XX.X fiscal fourth to year last XXXX. XX.X% XXXX million the XXXX fiscal fiscal sales a SG&A quarter as of the sales percentage period of same XXXX. compared million net the to million were in fourth were quarter fourth $X.X to year $XX of XX.X% from expenses for percentage year quarter year fiscal during fiscal fiscal fiscal expenses for for in a compared XXXX year. were

sales fourth and costs the incentives fiscal increased which XXXX financial the due net commissions, in increases and to and in sales contracted quarter primarily and employee year of compared employee contracted year result costs. XXXX. in personnel-related expenses improved to increase the in increased personnel-related employee year last The results fiscal SG&A are was sales during Included during

XXXX. $X.X income or net loss share fiscal per net diluted diluted fiscal recorded year $X.XX million for of and and for to year $X.XX compared OCC per or basic share of basic a XXXX $XXX,XXX

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

equipment income results on company's received the which addition damage insurance improved $X.X totaling for sales the property during to profit, XXXX. net company's gross and gain operations In from recorded was and on as of fiscal other year proceeds statement to million, the benefited

fiscal our our received we [indiscernible] the facilities, $X.X this on with a with water fiscal damage In sustaining ] proceeds in XXXX, connection and pipe at insurance [ million. content system year recognized a we from During XXXX its office end and connection gain event, building Ashville insurance proceeds XXXX. during year at of net burst totaling December

expect periods. recognize extent those At to we offsetting time, expenses damaged restore, may do we periods repair proceeds. not the incur or exceed to future restoration in costs any and replace future repair in To assets, we this future losses insurance

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

Neil Wilkin

Tracy. you, Thank

that and create growth Let to OCC executing remains our me leveraging to and strengths value for by opportunities capabilities, and core conclude our identifying shareholders. our initiatives strategies long-term saying committed

in them. you indicate only institutional any if we any questions from our call we to it. if to could are now, happy applicants And analysts questions I'd investors. for and instructions institutional appreciate answer Again, are have they the please investors taking analysts or have, questions, may [indiscernible],

Operator

the this are in now There queue no over Mr. Instructions] conference to time. Wilkin. turn will questions I the [Operator at

Neil Wilkin

in in there questions the I investors Thanks, think, fact, submitted James. Spencer, some are questions? there by individual call. I of know any advance were

questions, mind we will don't reading address you those. If the

Unknown Attendee

few have do we in advance. Yes, a questions submitted

the repurchasing thought off in first question, of North the given The shares real any instead Carolina was paying loan? quarter prior estate to

Neil Wilkin

is take this question. this, first going to Tracy

Tracy Smith

Sure.

proceeds which [ off As Carolina estate used to loan we in restricted that as insurance our to the lender cash reported holder. it was a in our previous real building the lean the in filings, was pay North ] question cash related was was

any cash other the paying a restricted been cash. building a than use restoring this for that use unusual down have of quite would for anything or the result, loans As

Unknown Attendee

The next question, repurchase in are there any the shares future? plans to

Tracy Smith

allocation use Well, of our ensure that our we to evaluate capital. shareholders' capital priorities we optimize regularly the

the So that look in we'll future. at

Unknown Attendee

excess understanding having that up? inventory your and prides times. inventory is of good The my in have OCC next much question, Did on that an itself effect amount delivery holds built a customers it how usually short

Neil Wilkin

Spencer, I'll take that question.

Like and on year. excess individual our had some excess inventory different, industry, of the the others during inventory our the of customer. has market any customers in extent depending past The been

good amount provide We do in of inventory hold short lead do and to a and delivery times that pride we times. using ourselves

level as has based appropriate year, needs this have had the is service we market some and been an we competitors. ended adjust watch during and with on fiscal periodically it needs maintaining of we some customers' the other that believe conditions. year our inventory customers something believe expected XXXX we at our we is While customer and inventory impacted to than less excess by OCC We been

Unknown Attendee

to demand you Thanks, from in the could question, up comment inventories again? pick customer Neil. on started Has The carrier the this market next market?

Neil Wilkin

XXXX lot We seemed the in inventory had seem to but demand. response. markets, some couple tend excess make during It a impact to comments individual carrier like a and of talk did that will wireless I year market us don't that fiscal to about

the time, do when believe pick say will extent but begin this to exactly case. at what to will demand that be and we the cannot We again, up

Unknown Attendee

you are and markets? oil seeing and gas Could the trends you in comment on military

Neil Wilkin

well and as what our year, experienced most Well, our enterprise weakness market this others as certain the OCC specialty industry what we've other helped And in said, markets. in past at strength market the is offset in in markets. we've seen already as of this

our we as markets, in oil are and Both And filings. included those fiscal year and XXXX, increase. in our saw during we specialty those both gas military discussed of

Unknown Attendee

could question, the final the innovation of And OCC? Neil. you, about process at talk you Thank

Neil Wilkin

give going That's than version a to trying be good a and answer. is long could short our I'm process specifically. answer what the describe to question a rather of there

solutions proud innovation. is I describe of -- would expertise say way and developing OCC years. OCC very application that and to trends that approach will our rather as of engineers come we're to focus to and an from OCC, it we I that at specialists And have enable users over importantly, and the tailored to think they that innovation needs tends innovation our the on then best approach benefited the approach, a our end market than product of build many

Unknown Attendee

Thanks, Neil. Q&A. concludes the That

Neil Wilkin

Okay. Well, you. thank

everyone's fiscal year thank Well, the you call listening XXXX and fourth today, appreciate for quarter on call. to we participation and our conference

time holiday interest Cable As has We your season, your always, hope appreciate happy that Cable. and Optical you. investment Optical we everyone and in a Corporation. safe appreciate sincerely Thank and in

Operator

conclude does for This program. today's your Thank you participation.

may now disconnect. You

Optical Cable (OCC) 20 Dec 232023 Q4 Earnings call transcript