Optical Cable (OCC) 13 Jun 222022 Q2 Earnings call transcript

Good morning. My name is Gregson, and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period [Operator Instructions] Please note, this call may be recorded. to program pleasure to now is turn over today's Mr. It Palash. may begin you your Please, conference.

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

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

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

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

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

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

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

second the supply second that OCC the of in backlog profit that a this X% sequentially XX% team's year. were net constraints, with results gross sales Again be would quarter reflect and growth impacted continue sales. compared deliver in forward from as of levels, solid we reflects to And we chain labor quarter also is our demand, higher performance. strong increasing high also and at were which typical, first to of are We load strategies I high our quarter team's quarter shortages dynamic to order able fiscal result on net - pleased market a performance that deliver second and OCC's strong add continued production than topline over sales tempered and over as build pressures competitive from position. execute inflation, volume strong XXXX. experiencing Our execution which we execution, the quarter a able to this our year-over-year, the

starting customer’s, approximately OCC and evolving top to not XX and our application the year. capture we have helps the - to remains expenses that At us We users expertise, users. needs and end OCC the show the core specifiers offer footprint, growing position, technical enable are to service competitors. are diverse broad and larger much unique that geographic recognition us market brand with connectivity into installers, capabilities opportunity appreciate positioned to only meet against continue in differentiating also a the well selling also also to customers end of we Moreover, our OCC a supply strengths opportunities and to enviable cabling countries core tier industry. and solutions, differentiated our focus - easing. products, but results OUR controlling We chain and and constraints affected of signs loyalty each compete successfully labor on of and market

and our fiscal is connectivity full growth products in providing drive XXXX, mission-critical, solutions. second markets, our to ahead focused on the half with look cabling targeted to we of and continuing customers team our suite As of

We efforts meet strong operate are effectively product production and and efficiently volumes demand. also continuing our to increase

capabilities with strategies in to strengths who Moving the leveraging core our I'll executing additional and call financial for to second our results. And fiscal that, shareholders. review committed and Tracy, forward, turn long detail will initiatives remain quarter over year we and our term to value XXXX create

$XX.X, sales quarter year Thank X.X% $XX.X second half net the million net were net year. year Consolidated $XX.X million $XX.X sales you, of year. net Consolidated same for sales for million XXXX, Sequentially, fiscal increase period for the compared first of to Neil. of fiscal fiscal XXXX of to for to sales first to of the XX.X% period compared the the quarter million, compared sales in increased same the of for year quarter fiscal an last X.X% XXXX second XXXX. $XX.X of net net sales increased last of

to quarter the experienced both During in same year. enterprise sales increase first last the half second and compared the market fiscal period XXXX, carrier specialty of net we in markets, including wireless an the and

increasing quarter backlog sales. the during second believe second and labor third load easing to the at of were volumes beginning Production first and higher demand XXXX. sales and fiscal At XXXX. are of and typical to this constraints demand chain with year our fiscal order tempered our of mentioned, year forward signs quarter for labor fiscal Neil and As by impacting quarter XXXX of products during constraints time, half than robust first continues year the product supply level in show be is net we half

profit. gross Turning to

Sequentially of second increased profit to quarter XXXX margin, Our net quarter in Gross profit gross to or fiscal first million to period fiscal first fiscal XX.X% XXXX the in an year XXXX. compared of costs million half first profit of same half of margin as profit the percentage the when second of gross fiscal primarily XXXX, gross XX.X% quarter raw in fiscal in the profit quarter compared million the X.X% for profit of materials due second increase to compared Gross million million the sales in of fiscal fiscal the was of in accepted with XX.X% fiscal second of in first $X year-over-year to the the margin cost Gross to increased profit inflation half of compared first gross half XX.X% fiscal $X to $X.X XXXX year XXXX increases material gross the XX.X% quarter fiscal profit for was XXXX. The of to comparing orders gross year of raw last in fiscal of of XXXX profit a the was second second sales, decrease XXXX. rapid increases. of $X.X for prior year. compared in of the XXXX XX.X% in XXXX. $X.X to causing to quarter the increased quarter

period $X.XX XXXX net or for XX.X% of to achieves a to XXXX. fiscal were half XX.X% The in sales XXXX compared compared company during quarter fiscal period costs of Our $X.X gross to levels XX% loss diluted OCC the primarily tend half employee to of $X.X SG&A second XX.X% fiscal profit basic fixed manufacturing second higher is in diluted sales net year expenses This the the net when half beneficial a certain for recorded of $X.X quarter basic $X.XX or as OCC first to spread levels net million quarter first $X.X at of XXXX, which second net be margins or half leverage for over higher basic are for higher the first million the last the share, year fiscal of higher first $X.X of sales increases and net compared of loss operating year sales half in expenses the of SG&A to during compared gross XXXX positively fiscal quarter a per in $X.XX of share, in the personnel raw XXXX first percentage fiscal million fiscal income XXXX. XXXX. net million, XXXX income last fiscal our of expenses year the half as diluted period quarter fiscal per same of of increased or year. related first XXXX of compared diluted fiscal as and SG&A per last sales was XXXX. the a per fiscal the quarter and the share, of the and million, to increased second same and of the during impact offset basic margins of profit increasing $X.XX of expenses reported partially cost impacted to result the share million, increase were fiscal the contracted materials. costs. for of to of and first in second $XXX,XXX, was and million second the compared net percentage XXXX $X in SG&A half of by year. the compared SG&A expenses to $X.X same for sales.

XX, to be April we OCC turn still XXXX, million receivable refunded, received XXXX. was had $X.X in May back. Credit the which for As I'll With Retention that, call a Tax of Employee

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

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

go submitted we’ve those some by shareholders. that we'll through you answer questions Aaron, to and I know non-institutional had them. want some Do

Sure.

why your first if So has role claimed that I structure? comment product makes shifted inflation out efficiency was cost you're whether here. that improvements rolling you wondering appreciate operational leverage plan could I question, increased the an important on

are. our price, - would our chain profits was move are and how price. impacting Aaron. affect We've though plant, and focused issues. the some gross very still the year the mix, [indiscernible] talking Thank increased through or significantly, imagine, product when been products it we you we honor This high. subsequent increases, is backlog have at impacted earlier. the inflation improvements, efficiency. we also That what's how leverage. of that more quarter-to-quarter. receive gross process looked you, as and describing we can availability when Tracy orders, making sometimes efficiently. have our to the material Also, - The as that And Even been that also availability well order has increase Yes, we've to you are in before sales constraints, run hasn't efficiently plant about our higher can improvements labor received said, committed profit may as have been efficiency, order plant supply from labor is on in spend a operating margins and We backlog vary, those what which that's of raw by part volume better our

that, over with labor second these the given some ease, that So pleased quarter, putting gross able on we of see that margin And we deliver, profit to the pressure and time, issues and some I've would volume as impacting expected improve. downward margins gross and other those were the that profit. matters also, very increase are

Thank you. Great.

you out and could directly network on for on comment the company, the question, have expansive and derivative opportunities related build products? Next may your you broadband both the demand sets potential to for see of

generally, tend Yes, I specialty are as well targets market networks. our as markets be to private markets, mean, that enterprise private

use you have, We touched and some success that the a which constantly sales. of and on also that the products sales we've to of the know, of markets broadband fair as market, market. private evaluating have expand in had opportunities area. We're have is to internal And some products all our outside [ph] amount

in been going the broadband impacted that initiatives have network on. by that We success certainly - private the currently had space, are in have

training company over increased you're dealing labor demand the hiring skilled about Okay. or been with lead Even laborers, has you the the past the of and versus to, on skilled internal how the could sales skilled months growth for comment may thinking shortage trail?

We of been you. have have to maybe been in experiencing. folks and heard have what do kind matter are, some have, paths standpoint, see, fortunate, manufacturing question tenured. we've we some last from have it's experienced than try the benefit been And to and front be very controls training, to you less an well because that their do. experience a come no employees Yes, seen lot we in is always we skilled after to We turnover, implying while as in hard in would will We've from to these And production that. hire of setup, temporarily, others find that's proprietary. just someone what increase how through But quarters, of definitely are thank relevant is go that here. during a someone our

that make sure example, way way proprietary make what takes of manufacturer, that if order to cable time it its learn are, they so And by in experienced even proprietary or operator someone to product. our processes was by an our of

at looking help minimize creative to We’ve been always very So ideas looking at this. this.

we As that seeing those constraints, see that of some in continues easing the are think some we we've and and the easing labor that hope in - said, third will quarter of benefit some we hope

development? Terrific. update do an Last product or substation question, you on have manufacturing

we that don't been have is that a about to ongoing also fortunate Well up specifically. our to some are a history and We do OCC talk able of new our see adjustments we improvements as seen development products customers better and patent. concepts shareholders team And making with come an engineering opportunity that. to our opportunities to know they has when to product we've able needs serve - for have continued when

to do presence that and will in here. that's appreciates. But not I and to the And that And for have so industrial a known manufacturing definitely one say things our we that continue are I'm base going customer of applications. we

Great. That was last question. the

Okay, it. conference XXXX year call thank everyone today. appreciate quarter to our thank second Aaron, for fiscal Well, listening you.

I interest As always, we Cable time and day. good Thank hope your everyone has in a Corporation. you. appreciate Optical your

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

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