OCC - Earnings call transcript Q3 2024 | Optical Cable Corporation

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Operator

Good morning, everyone. My name is Jim, and I'll be your conference operator today. At this time, I would like to welcome you to Optical Cable Corporation's Third Quarter and Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]

Mr. your begin may you conference, sir. Hoffman,

Spencer Hoffman

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

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

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

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

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

Neil Wilkin

Spencer, Thank and you, morning, everyone. good

and have in protect our and those Pennsylvania Virginia women we who and I'd liberty. who freedom honor our New moment around today honor and XX our the ago to to served terrorist silence of York, pause for those a years Before call men in on like our serving conference are to attack and country to country world the perished Thank today, begin you.

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

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

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

Like our line many our during year in dynamics, third be executed results in a impacting of are demand now fiscal continuing to customer quarter by our for affected XXXX. top our of we and the well. OCC markets year the environment to these Despite industry, XXXX. targeted fiscal certain Turning market challenging

net fiscal and the quarter achieved our and since sales backlog sales XXXX, since of XXXX. each has forward also quarter of fiscal higher order first have We the beginning year increased load

year of We improving near opportunities we and end are year the fiscal indications fiscal other of XXXX. as seeing looking ahead our to

efficiently. taking executing end grow plans products and We to steps will operate team ahead appreciative providing of to continue of responders, and the the opportunities our work prudent with solutions. focus and capture first to I'm and while sales country's our customers our military suite their and on our very also mission-critical to net including commitment also users, OCC

year valued to fiscal is customers targeted look We differentiated the our to As profitable our and fiscal we conditions meeting OCC the and strategy -- that core and deliver needs into the end to end and capturing enhance markets and XXXX, to exceeding of users remain opportunities, our strong growth shareholder improve. committed and as advancing capabilities, with value our shareholders value. remain of confident in macroeconomic of to we poised strengths position

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

Tracy Smith

the of of were first X the were net X.X% sales million period of fiscal first months $XX.X for for decrease of a of $XX.X fiscal for XXXX million, compared million, net sales months sales of XXXX. net fiscal third XX% compared Consolidated year. for of Consolidated a XXXX to $XX.X million X Thank the last the to $XX.X sales net decrease you, same Neil. quarter

XXXX, although has since quarter As strong sequentially fiscal not year quite have as we sales been the anticipated. quarter net the initially Neil each growth increased our of mentioned, as first

enterprise wireless consistent quarter XXXX, net net fiscal with and industry fiscal of experienced During the our year, sales sales XXXX. we We is current which market. in specialty quarter target third to began experience generally increase in decreases believe offset we the markets, weakness in including the an this compared our to which the carrier our during same markets, market our certain across year in in was of of by third period last

both the year-to-date including For in experienced wireless the carrier markets, our enterprise we specialty in decrease net and period, a sales market.

sales returned XXXX. $XX load X sales XXXX forward XX, first order of months $X at had normal forward year as higher-than-typical whereas forward levels. at compared more load $X.X benefited a end the of during more fiscal the first XXXX, year backlog end the At April net the and the sales end of Our million XXXX, than million million to of from of and and months fiscal order backlog fiscal million XX, as sales fiscal year XXXX of load XXXX, of January $X.X positively to when X of and increased to backlog order

to Turning profit. gross

second was XXXX as XX.X% Gross quarter in of of third compared of profit fiscal million of the $X a fiscal profit profit compared and XXXX. for in XXXX XX.X% quarter the gross gross year $X.X quarter compared net quarter profit million percentage was third second gross $X.X in of for the fiscal of the profit the period sales gross same XX.X% to Our XXXX to XXXX. million of for third of to fiscal last fiscal quarter or margin and the

XXXX, of in a first first impacted XXXX. Gross efficiency XX.X% in net any of months reflects fiscal third products in of over quarter profit for manufacturing months first fiscal the of as first Gross through as profit the months of spread plant X X fiscal $XX.X X leverage. effects the mix. profit XX.X% lower margin profit fixed fiscal XXXX was X in the and operating margin margin XXXX. was of $XX.X of production volumes months well to of product facilities, by the compared quarter million flow lower of X sales million our also was XX.X% The compared to months variability decreased in our Gross charges decrease in XXXX production fiscal lower the both in impacted resulting changes being gross volumes first as

in expenses quarter SG&A year. the $X.X fiscal second a were XXXX. of expenses of million the quarter By of sales SG&A of XX% a year for percentage XXXX our reflects percentage XXXX, compared were in expenses the same fiscal million operating XXXX to sales third last third were $X as in quarter relative net of in XX.X% compared to XX.X% third of to period fiscal sales. the comparison, as fiscal the quarter net which leverage net SG&A

period of a in X net first for were SG&A of The expenses $XX.X XX.X% to SG&A expenses percentage $XX.X X to the X.X% sales fiscal contracted first to year results and personnel-related year the quarter in incentives XXXX. months X the primarily XXXX employee in XXXX first of X X costs. net employee during the of SG&A first during months and million due fiscal of sales months decreased fiscal during contracted fiscal from was X XXXX in million months result of months employee the of the Included the of XXXX. sales decrease compared year financial last first and decreased as fiscal to commissions, XXXX. which the in first the third costs XX.X% months and expenses decreased decreases personnel-related sales year compared fiscal are same in

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

call to Neil. that, I'll the With turn over back you,

Neil Wilkin

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

Operator

Instructions] from We audience additional today. to for you closing have Wilkin, back it our turn questions phone that no any to [Operator you Mr. remarks I'm or happy sir. have,

Neil Wilkin

know of Thank submitted you, I Appreciate Spencer, questions of we've Jim. got it. today's a couple call. ahead

those questions. we you read could respond If will to those,

Spencer Hoffman

we Yes, X do Neil. questions. have Thanks,

that being QX the XXXX is cost OCC's year. Neil, on approximately per million of a still public first, earnings that the case? you stated $X The company Is call,

Neil Wilkin

company public over the associated increased this At any in time, the costs point have years. substantially for

in be a to they would as substantially expect, today back company So cost than were higher OCC's you public are XXXX.

talked publicly it the about is number, substantial. We precise but not have

Spencer Hoffman

Thanks, Neil. the And this question. is last

call, stated much the on deeper OCC thought than you XXXX you that can QX has a on so bit long-term your we that going On and you go grow the management's the been up we for are. to general where set forward? bigger Could that please company earnings commitment process opportunity see set

Neil Wilkin

question. appreciate I Yes. this

founded has We steps solutions better optic beyond to of initial OCC our and product And fiber more the XX strategically been years, ago. our and well offerings serve end to examples. product a which expanded number major than a of was I'll users. OCC taking offerings and the few customers solution Over on needs the expand years mention cable

and Asheville, XXXX. on This fiber and market. expertise the OCC's optic fiber technologies, Data communications solutions, manufacturing presence enterprise acquired copper optic in and cable Carolina building North near Communications products both connectivity data OCC in capabilities in added SMP acquisition existing

added well. copper we as of comm data products category that, after Soon line cable a

optic now in one and among market, the position market, U.S. end-to-end market cable provides result, cable reported least long-standing optic as analyst of and building connectivity full this a fiber for the on As by cabling enterprise OCC's top solutions X fiber is manufacturers at as and structured firm. OCC the copper

technologies including And optic OCC's and This other products connectivity this our specialty in OCC existing Systems and long-standing Optical fiber top-tier and on Dallas, was built fiber -- this for in industrial, and environments, military, specialty optic markets acquired solutions. added and products for in Texas cable with broadcast capabilities near XXXX. those markets. applications Applied acquisition position harsh

and strong specialty for connectivity with environment and now a As optic presence markets applications and result, markets. targeted a provides full solutions in top-tier end-to-end OCC our and harsh fiber products

over long-term to enable Before cables had OCC. wireless and other the we wireless targeted encouraged as well. equipment in fiber optic And OCC's This words, well, copper OCC products optic expanding was new signs market, and and of carrier equipment few the as interestingly, that. cables, with of benefit other in after which we're hybrid off the the beginning past added for have in manufacture and to And market market, which fiber carrier made course, XXXX improvement. opportunities existing production of XXXX cable for years, trailed significant OCC for show investments a new to see fiber by

many customers better serve lines. appreciate And as solutions this over and we needs and new continues of our see our product question. types products all Additionally, to I've end markets various add years and day, OCC continuing, existing targeted the to has said. continuing to I in and our and users' expand that

And Spencer. we X had you said questions,

So that's There's else? nothing it?

Spencer Hoffman

That's correct, Neil.

Neil Wilkin

Well, quarter everyone XXXX thank to conference today. Okay. would to year our for fiscal like I listening call third

and and with your served we Thank are hope a that, thank interest and around Corporation. who the like Optical And has our your to good I our men safe in country women and and you. time protect to Cable and everyone always, serving appreciate day. those Liberty. freedom I'd have Again, As world investment

Operator

teleconference, conclude participation. This thank all you today's we and for does your

disconnect. now may You

Optical Cable (OCC) 11 Sep 242024 Q3 Earnings call transcript