OCC - Earnings call transcript Q2 2024 | Optical Cable Corporation

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Operator

Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome you to Optical Cable Corporation's Second Quarter of Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]. Mr. your begin may you conference. Hoffman,

Spencer Hoffman

should thank Good issued Optical Call. earlier joining of everyone for today. for Corporation's morning, By earnings Second release time, Conference and Cable XXXX Quarter us Year copy you of press a have this the Fiscal

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

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

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

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

Neil Wilkin

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

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

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

year-over-year, macroeconomic that delivered We to XXXX, are first position as participants well industry XXXX to tough continued the XXXX which OCC facing of industry down fiscal OCC's and the this comparison. half solid face. comparing environment. a despite solidify of other our proud quarter I'm the XXXX team, fiscal fiscal in we as half are fiscal to when we and has second OCC the as to leader of results believe our first results pressures in the And while continue of execute a

normalized a sales net second As in typical were of higher into load, by which backlog than half forward quarter Tracy boosted and fiscal XXXX. will achieved with last for get order believe net sales sequentially, year. XXXX year, and the net Yet we moment, first our quarter fiscal during quarter line year increasing we XXXX improvement the this X.X% sales OCC's first top fiscal for of year to of compared the sales second

compared increases when during fiscal XXXX sequentially competitors reflects our growth increased quarter of XXXX. quarter the believe OCC's and year of This sequential what than the to X.X% gross fiscal profit second first experiencing. the are markets in is XXXX OCC's both fiscal when of this of second quarter compared the many first We Specialty Enterprise better during improvement also quarter. to

Looking ahead, the has team created a advantage. competitive

conditions company our believe moving market serve decision head position to we maintain will improve, outperform to well As and forward. us count our

to forward, operate demand. take optimally position we meet to can As OCC control and efficiently steps what continue move we to rebounding we

and and in end year call the I'll fiscal strategy meeting of to the opportunities, second growth and exceeding XXXX our who over profitable capturing to committed will Tracy, valued that, of detail, turn financial advancing shareholder remain enhance customers users with And We review quarter our needs value. to our additional results.

Tracy Smith

first of were sales $XX.X net Consolidated sales quarter sales XX.X% net the fiscal during quarter of second XXXX net markets for the XX.X% fiscal million period the Consolidated net for X.X% to of a Sequentially, quarter OCC and a the fiscal of Enterprise XXXX million, increases the half $XX compared of increased compared the compared $XX.X of Neil. of of year. sales compared Specialty $XX.X second Thank fiscal second last half the year fiscal quarter for to million XXXX. $XX.X of sales net decrease XXXX. XXXX. you, million, first same during in first XXXX to fiscal sales quarter for were decrease first experienced to sequential the million for both net of year

During quarter last we current same certain to markets. sales target weakness our fiscal our carrier We and consistent industry net with this including experienced year. of and in and in decreases our the in second of market both first compared half enterprise wireless markets, specialty is believe the XXXX, across the period

during net positively than fiscal to while and XXXX load the load benefited fiscal more sales level of backlog second approximately backlog typical $XX more of and returned from of forward at year levels. year normal XXXX, forward the remained order order higher of of backlog typical million beginning end periods a at the at million. XXXX, year the of and has order quarter sales XXXX more fiscal load fiscal At Our forward beginning sales sales of a comparable than year the $X.X

industry, sales net negatively first various industry uncertainties second for is the generally. XXXX experienced were of and in fiscal believe by we with our and in consistent Additionally, risks which our being half year impacted pressures, macroeconomic quarter weakness

of positive our to compared of net Overall, fiscal first and we markets. certain grow continue including our markets enterprise to XXXX. in the begin expect show there While half softness, sales wireless of indicators carrier of we our are to market, year signs believe other our to certain

Turning to gross profit.

was compared million gross XXXX. Our profit profit in first for second XXXX period of $X $X.X year and to of last million of of million the fiscal gross profit fiscal $X.X gross the same for the quarter quarter

XX% of profit gross XX.X% second of in Gross XX.X% first first of quarter XXXX. fiscal gross to XXXX, Sequentially, the a of in first X.X% XX.X% to of to XXXX compared profit of for percentage first compared fiscal XXXX XX% the to XX.X% the of a $XX.X fiscal Gross million was fiscal second quarter decrease half the profit in million and fiscal of half quarter of for XXXX half fiscal second during of $X.X first of compared XXXX. profit the or profit fiscal to quarter half margin, net the was increased in quarter fiscal in as XXXX sales compared compared Gross $X.X margin first the the the XXXX. was XXXX. million fiscal in

of and as and operating of manufacturing charges second margin Gross was lower over fiscal through the profit facilities, impacted efficiency lower fixed plant first negatively lower spread the XXXX the quarter as well impact were half for fewer leverage. our impacted at sales by as volumes backlog of flow products sales reduced

mix. year. to $X.X the changes on upon compared same Additionally, $X.X of to second our gross fiscal million expenses dependent heavily a year basis vary million in and SG&A are quarter decreased in product period margin mix profit may product quarterly the last based percentages XXXX for on

first XX.X% of expenses fiscal were the of a decreased reflects fiscal expenses net million in half relative fiscal of and quarter XX.X% financial net sales sales. the XXXX SG&A employee the million employee comparison, our SG&A SG&A a our contracted XX% SG&A in fiscal leverage XXXX, $XX.X incentives and in from percentage in period expenses XXXX. half By half the year quarter XX.X% during fiscal quarter net the fiscal of first were expenses The operating expenses of X.X% included decreased costs, of second of XXXX XXXX. sales during the result half compared personnel-related which results percentage compared which percentage quarter first were decrease first sales the the of to for employee and of costs, half $XX.X fiscal as and to decreased was second quarter of XXXX. an to of in the year the as second XXXX decreases and in last SG&A to net and of a XXXX. as sales the contracted due the in to sales first XX.X% sales second personnel-related commissions, fiscal first of net during same year compared XXXX first to fiscal year primarily half

a $X share $X.XX of XXXX for income quarter the quarter basic a per million to of or recorded of second $X.X of fiscal net second $X.XX net compared diluted XXXX. million OCC OCC loss per fiscal for basic loss the of $X.X recorded net and diluted share of or and $X.X or the first and half compared that, Neil. million XXXX I'll first of basic the over million for for And fiscal year year turn share per call share half basic diluted $X.XX to net of and income the per with $X.XX to diluted or back fiscal XXXX.

Neil Wilkin

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

Operator

program the additional to back appears now at It this presenters questions Instructions] will we for [Operator remarks. I turn time. no our have any over

Neil Wilkin

some I Thank know that by investors. questions were had you, submitted Angela. individual Spencer, we that

respond and If you could I'll to Tracy ask those. those questions and

Spencer Hoffman

Absolutely.

from The annual look -- a [indiscernible] first burgeoning market And to you to markets. so, business if what and the of bit this Could your your comment more to in this And forward question. your forward niches? your can data on penetrate centers and In market? more as XX-K look report attempts what we future? one can more we

Neil Wilkin

I'm in centers in number And Well, tiers products. that sure The a smaller to data private center that do OCC hyperscale participation of does data has the understand offer market. have used centers. data as some market, are products some from we market, folks data center

is center on most designed that benefit Some to hyperscale in we it. specifically the It data recent data periodically how from of can centers. at that does market. include and see is product is talking look not And products the growth that a watching data hyperscale are market focused the for we're offering about centers OCC

Spencer Hoffman

of office question. Neil. damaged Asheville? What you, the status Thank next water is The building in the

Neil Wilkin

take Tracy to this is going one?

Tracy Smith

regard evaluating We're office to building still with in our Sure. options the Asheville.

water an on this have previously, processes. the damage building an and indicated production didn't our was As administrative impact

suits time feel we can making we that the decision some spend best a and our options analyzing needs. business So

Spencer Hoffman

carrier building patterns your large inventories as Thank you, Tracy. question. time? industry? work Could customers in purchasing The comment you Are over the on through they the next

Neil Wilkin

that. Yes, I'll answer

slowdown disclosed the happening of of has as is and as for This this manufacturers a our of. have believe other sales number with in a number what we in We OCC So reasons. wireless market is shareholders carrier experienced. aware seen are a consistent

inventory carrier to excess the there's some is that the market. market. the that OCC have in that capabilities market think believe I wireless do market, for of the in improve those channels And in lower will do still wireless one carrier sales believe in that that has sales resulted do future. We service we for been and reasons we

Spencer Hoffman

count technologies. new XXXX, of to Thank next fell Neil. implementation significantly due question. XXXX The you, and oil In in part rig

increased/rig drilling productivity, competitors than your demand product? XX% oil of then. their that to for The saw your Some impact more back sales fall customers over horizontal Similarly gas period. and

Neil Wilkin

products and does the are OCC into offer So that certain sold oil gas markets.

which you factors, expect, a in have on of market and variation prices, volumes. production into we including oil seen sales gas As impact would that based number

Our on can't specifically market over with benefit some that offerings benefit certain in diverse. helping from of to products participate that years. volatility. to the product I from and But in diversity, are we reason that a in XXXX. many for we that And that market XXXX mitigate comment oil gas do and

Spencer Hoffman

Thank you The in or a end your specialty was XXXX enterprise and question. growth next understanding you, how Neil. of between rough like us what market? markets sales sales market give the in split Could

Neil Wilkin

Spencer. you, Thank

Geographically, as also by so. that markets included many targeted have various well do speak markets, sell geographically And -- portion generally. to targeted different we operates each the of XX we by in enterprise the we OCC diverse specialty year, countries are in about in we or -- and So application. we market, applications markets as market into different both

significant specialty can and a enterprise carrier The I will varies strength markets, the comprise OCC's diversification say helps our by mute and is that of year-to-year. sales. volatility markets. wireless excluding it OCC it occur in varies market, for each generally, and OCC, -- That that half about markets quarter,

we details on don't that talk But For about specific markets. information hopefully, disclose that's the being competitive provides individual asked. or reasons,

Spencer Hoffman

XXXX, quarter of levels sales in fourth quarter during on margins fourth at the similar gross what gross lower impacted Can you margin comment In came the past previously achieved question. quarters. your final the XXXX? of now other margin And than in

Neil Wilkin

going is question. to address that Tracy

Tracy Smith

time impacted has and mix. Okay. mix cost be sales for quarter difficult In lower impact older the that that on over quarter-to-quarter. can were and Comparing gross including XXXX, changes occur fourth reasons, our margins many profit volumes our profit product the periods in structure from margin gross of by product

as such more we that the end So had the the unusual as are mix at that is But point that operating if those older the try gross prior we drivers in in years, primary and profit of particularly past, something we you're can fluctuations definitely product our day, for margin leverage looking quarters, to, quarter-to-quarter. significantly quarters. we highlight issues production well. at from to When have process

Neil Wilkin

Spencer, was the question. And don't you that last more? any said We have

Spencer Hoffman

question. the Neil last was that Yes,

Neil Wilkin

Okay. everyone our That thank the for to being case, listening would XXXX of second fiscal I like today. quarter conference call year to

appreciate very Thank Cable you time your in Optical Corporation. always, we As your and much. investment

Operator

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

You at any may disconnect time.

Optical Cable (OCC) 10 Jun 242024 Q2 Earnings call transcript