Optical Cable (OCC) 17 Mar 222022 Q1 Earnings call transcript

Good morning. My name is Reid, and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation’s First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, today’s call may be recorded. [Operator Instructions] Mr. your begin may you conference. Palash,

this Good Terrific. earnings for Year press thank have By all release issued and on Thank XXXX copy Optical the Call. Fiscal you. participating of Cable you Quarter should today. morning, Corporation’s of everyone time, earlier Conference a First

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

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

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

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

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

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

including in by the environment OCC’s first directly is supply constraints. market Our a COVID-XX, chain and that indirectly results team’s solid still reflect execution affected significant quarter

XX.X%, case in the During up to up same period gross net and compared last each the sales were profit XX.X% year. quarter,

brand strength demand of the solutions, position OCC seeing a of we suite our but confidence of successfully for evolving pleased At also that against unique our we uniquely market. end products products, recognition solutions, the and meet and the to our of and have Difficulty] our in much installers, in us reiterating expertise, are positioned work growth end team, competitive our It’s of customers competitors. users loyalty hard top-tier specifiers and and strategies offer needs the technical reinforcing customers, and in remains capabilities core OCC, and broad... position, [Technical enviable the cabling strengths industry, opportunity worth only not and strong connectivity appreciate larger users. to differentiated that full the to enable to to our distribute continue thanks compete to us offerings, Moreover, We our and market and mission-critical our helps applications

still you Neil, there? are

here. still I’m

the you was what So heard? last thing

a distribute I geographic broad, diverse believe you that footprint. to

Thank Okay. you.

So I’ll bit little start a earlier than that.

can loyalty with our supply chain of diverse each and impact Moreover, helps you working to and the continues constraints diligently position, effects possible. to extent hear. minimize challenges customers distribute into broad, to these enviable market that OCC experience approximately team completely countries So geographic XX the users end OCC the the of recognition our us year. is a footprint and selling to brand the of

efficiently. targeted will including OCC our ahead, look focusing in we and growth control markets As continue can, we operating to driving what on

executing and our recede, of is opportunities OCC strategies As fiscal the detail review financial to first And value various to our capabilities initiatives to create leveraging for long-term and strengths quarter our year over that, direct we’re who’ll capture in the committed still assuming We remain with and the on, turn indirect results. call shareholders. XXXX I’ll additional Tracy, core and pandemic poised the effects ahead. to

the for Neil. period last you, XX.X% XXXX same $XX.X Thank Yes, the Consolidated $XX.X of for compared year. sales that’s fiscal of net results. to million to XXXX increased sales first net million quarter financial

XXXX, During in last customers to XXXX. compared specialty the the the wireless X.X% fiscal United first compared including of first year. of States sales the to carrier of in the an States outside customers increased the of markets, net United period to both to we quarter increased the the and Net same experienced quarter increase XX.X% market quarter net XXXX sales enterprise and in first sales fiscal fiscal in

and forward strong to backlog demand. Our due sales increase product to load order continues

While including in indirect particular, the of and by first and quarter affecting impacted that net the of year were that demand continuing during chain increase COVID-XX, production are supply to effects sales direct continued fiscal XXXX, constraints our labor volumes.

strengthening to continuing XXXX. will in future believe the months from of positive some improvements we X our some markets year are and of markets see to during of continue in indicators fiscal remaining benefit our We

customers, fully impacts including reasonably cannot our continuing in COVID-XX variants or various we our anticipate on of various emerging However, from estimate the the impacts markets. and of markets pandemic

to Turning profit. gross

of profit million first gross year. XX.X% of XXXX of profit the fiscal Our compared margins, gross as a sales profit increased percentage million last increased fiscal of first the the $X compared $X.X in in profit quarter in gross the quarter to to our period for to same to XX% XXXX first of XX.X% Gross net fiscal XXXX. quarter

company profit fixed achieved profit certain margins beneficial at as the is when are sales costs year higher higher impacted higher of levels, manufacturing levels higher in net first the sales positively gross operating to This sales. Our gross which our margins fiscal leverage, spread tend quarter be over XXXX.

made have XXXX positive profit margin. and our Additionally, gross on operational years impact continued a we we fiscal in to that actions and XXXX took believe we improvements

sales basic increases employee and dependent first net share-based quarter basic $XXX,XXX and for employee the $X.X product and a SG&A of diluted personnel-related were profit personnel-related result quarterly XXXX. or and are share mix fiscal million $X.XX may quarter also of $X.X net on OCC in in fiscal the percentages vary contracted in The million XXXX. on the quarter-to-quarter. SG&A first the the Our primarily to to first costs upon for fiscal expenses gross fiscal margin based period first increased first in quarter compensation diluted net of of changes expenses XXXX for a the compensation in and during or per quarter of of per from basis quarter loss commissions net of percentage Included of product the share was as a expense. XXXX XX.X% heavily to are $X.X increase to compared of $X.XX compared expenses taxes, compared same year. last XX.X% contracted in sales recorded a costs. loss sales mix payroll XXXX fiscal million costs, and SG&A

credit XX, still be of $X.X a January we refunded. retention employee As XXXX, the for receivable to have million tax

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

And balances our turn term to real had that, loans. of with also call $X.X loan outstanding the over back estate million under We I’ll Neil.

Thank you, investors institutional think we’re Tracy. them. Reed, you’re answer any And any still to and have I if analysts happy our now, questions, operator.

appreciate we analysts taking instructions call may If you have, and the I’d only questions Again, our questions any institutional in could from please are indicate participants investors. to they it. live for

be to no [Operator there And appear questions this Instructions] time. at

a of that we’ve Aaron, from know gotten shareholders. individual Thank questions Okay. you, couple I Reed.

you question, read will the If would we respond.

of or similar breakdown provide employees Sure. Can manufacturing, into administration your sales, groups? you rough a

breakdowns provide don’t we reasons, of our competitive employee groups. For

is Lean the the you commitment is, reason as our as efficiently I and should why to However, asked possible. know think question being operating all and as

XXXX, fiscal XXXX fiscal You’ll year XXXX fiscal million X.X% SG&A or or and expenses the reduced that we year. in $X.X had year we by in recall that compared XX.X% year SG&A reduced to by prior to compared after million was $X expenses

the manufacturing solutions? Great. and here, And then you give progress the on can substation last an update question us on

suite for don’t But reasons, of we can forward products or with comment moving Again, say competitive a is Aaron. we solutions. Thanks, specific are what we that on projects. comprehensive

seeing and well We’re excited the to drive to positioned we continue our demand by growth are across markets. believe we’re

That question. Great. the was final

like you, year of our Thank today. to I first listening call conference appreciate I’d for thank Okay. everyone also to quarter Aaron. fiscal XXXX that.

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

concludes Operator, today’s call. that

And appreciate conclude participation, may today’s and disconnect. your this you does program. We now