Good morning. My name is Maria, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Optical Cable Corporation's Third Quarter 2012 Earnings Conference Call. [Operator Instructions] Mr. Siegel, you may begin your conference.

Good morning, and thank you, all, for participating in Optical Cable Corporation's third quarter and fiscal 2012 conference call. By this time, everyone should have a copy of the earnings press release. If you don't have it, please visit occfiber.com for a copy. On the call with us today is Neil Wilkin, Chairman, President and Chief Executive Officer of OCC. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements that involve risks and uncertainties. The actual future results of Optical Cable Corporation may differ materially due to a number of factors, including, but not limited to, those factors referenced in the Forward-Looking Statements section of this morning's press release. These cautionary statements apply to the contents of the Internet webcast on occfiber.com as well as today's call. Now, we'll turn the call over to Neil Wilkin. Neil, please begin.

Thank you, Andrew, and good morning, everyone. Joining me today on the call is Tracy Smith, our Senior Vice President and Chief Financial Officer. I will begin the call today with a few opening remarks. Tracy will then review the third quarter results for the 3-month and 9-month periods ended July 31, 2012 in more detail. After Tracy's remarks, we will answer as many of your questions as we can. As is our normal practice, we will take questions from analysts and institutional investors during the Q&A session. We offer shareholders the opportunities to make questions in advance of our earnings call. Instructions regarding such submissions are included in our press release announcing the date and time of our earnings call. We are pleased to report that OCC achieved significant increases in net sales, gross profit and net income for both the third quarter and year-to-date periods, compared to the same periods in fiscal 2011. OCC, again demonstrated that our operating leverage allows us to deliver disproportional earnings growth rates relative to our net sales growth rates as fixed costs are spread over larger sales volumes. Net sales and gross profit increased by double-digit percentages for both the quarter and year-to-date periods. And net income attributable to OCC during the third quarter of fiscal 2012 was almost 10x that of the same period in 2011 and during the year-to-date period was more than 5x that for the first 9 months of fiscal 2011. Net income attributable to OCC was $0.18 per share during the third quarter of fiscal 2012 and was $0.36 per share for the first 9 months of fiscal 2012. After the end of the third quarter of this year, our sales order load was again high, particularly for our Fiber Optic Cable products as a result of…

Thanks, Neil. Consolidated net sales for the third quarter of fiscal 2012 increased 17.2% to $22 million compared to net sales of $18.8 million for the same period last year. Net sales to customers in the United States increased 10.8% in the third quarter of fiscal 2012 compared to the same period last year, and net sales to customers outside of the United States increased 39.1%. Consolidated net sales for the first 9 months of fiscal 2012 increased 14.4% to $61.4 million compared to net sales of $53.7 million for the same period last year. Net sales to customers in the United States increased 10.5% in the first 9 months of fiscal 2012 compared to the same period last year, and net sales to customers outside of the United States increased 26.5%. Our increase in net sales during the third quarter and first 9 months of fiscal 2012 was attributable to increased sales of our Fiber Optic Cable products. In the third quarter and first 9 months of fiscal 2012, we recognized net sales totaling in the aggregate approximately $5.1 million and $11 million, respectively, as a result of a number of large orders for 2 customers. Gross profit increased 35% to $8.8 million in the third quarter of fiscal year 2012 compared to $6.5 million for the third quarter of fiscal year 2011. Gross profit margin, or gross profit as a percentage of net sales, increased to 39.9% in the third quarter of fiscal year 2012 compared to 34.7% for the third quarter of fiscal year 2011. Gross profit increased 26.1% to $23.8 million in the first 9 months of fiscal 2012 compared to $18.9 million in the first 9 months of fiscal 2011. Gross profit margin increased to 38.8% in the first 9 months of fiscal year 2012…

Thank you, Tracy. And now, we are happy to answer as many of your questions as we can. Operator, if you could please indicate the instructions for participants to call in their questions, I would appreciate it.

[Operator Instructions] Your first question comes from the line of Orin Hirschman of AIG.

Nick, can you take us through a little bit some of the dynamics? I mean, obviously, there is unusually good demand for some of your products. Where in particular are you seeing it? Is it just with the demands for very high-quality fiber? And can you go through what you're seeing on both sides of the business right now a little bit more in detail?

Sure. This is Neil, obviously. We haven't talked in too much specifics about where we're seeing the biggest demand other than to say it's on the fiber optic cable side. We are seeing some specialized product demands there that have caused us to see our sales increase. I think, generally, with the industry right now, we've seen a little bit of weakness, there's even been some announcements of other companies in our space cutting back on personnel. We have 3 general product lines that we offer: Fiber Optic Cable, Enterprise Connectivity and what we call our AIS, or applied interconnect systems products. We have seen some decrease in military spending, but that's been offset by demand in our fiber optic cable products, specifically for the 2 customers that we've referenced.

In terms of the military beginning to bounce back or beginning to show any signs of strength, are there any other positive signs?

We haven't really seen any positive signs of military bouncing back, specifically. And I think that generally, while often communication products like we offer tend to be needed even when there are military cutbacks in order to provide the military branches with ready communications, we haven't really been counting on the military bouncing back. Instead, OCC's been focused on moving our sales efforts towards other areas that we're already in. And this isn't atypical. I mean, we've seen, over a number of periods, times where we'll have one area of our business, which is down; and another area of our business that's up. Our products are sold to a fairly diversified end-user base and as a result, while we are seeing decreases in military spending and that has affected some areas of our business, it hasn't affected our consolidated results.

Okay. And in terms of any of the trends towards higher speed on the Internet side, is that driving any demand for higher quality cable like you make?

Well, there's a couple of different issues there. I mean, we make higher quality cable from a rugged standpoint, and then we offer higher quality cable that also accommodates the higher speeds that people are demanding. There has been more interest in higher speed fibers but that, at this point, is not precisely what's driving additional revenue. But OCC's well positioned to take advantage of any trends in that area, given our offerings and the fibers and the cable offerings that we have.

Okay. And just 2 questions on the expense side. Expenses were definitely stable compared quarter-over-quarter and sequentially as well. Just any comment on the slight sequential decline, was there some unusual shows of anything in the prior quarter? And also the refinancing, approximately how much does that save on an annual basis on a pre-tax number and after-tax number?

I'll let Tracy in a moment answer the question about the savings from the refinancing. And since our tax rate varies, it may be more helpful just to have a pre-tax number estimate for the savings and, of course, it would be pretty close but an estimate. SG&A expenses can vary a little bit based on the types of expenses we have in any individual quarter. During the first half of the year, we have certain expenses of being a public company that sometimes make those quarters a little expense-heavy, and there's other things that can come up. I think we've been careful in trying to control our expenses. At the same time, we have seen some increases in employee-related expenses because so much of our employees' compensation is incentive-based and/or for our sales personnel, sales-based. As we also see -- we also see fluctuations in our shipping costs when we see changes in sales and that's some of the differences that you're seeing come through the SG&A.

As far as the interest savings expected based on the REIT modifications to the real estate loans, what we expect is that we'll see about $125,000 annually savings on that modification pretax. And as Neil mentioned, it's a little bit harder to project based on fluctuations in our effective rate what that equates to on a after-tax basis. But pretax, we expect it's going to be about $125,000 annually of savings.

Your next question comes from the line Richard Ragley [ph] of Glenwood [ph] Capital.

Could you give a bit more detail on the geography of the foreign sales? And also, if the new customers are making up a large components of the increased sales. And also with your peers, you mentioned them cutting back, is that something which is -- presents good opportunities for you? And just finally -- just if you could remind me on whether there's anything else standing on the buyback?

Sure. We'll start with the geography of our sales. It varies by quarter-to-quarter, and Tracy can give you some additional details about this specifically about this quarter, if you want. But generally somewhere between 25% and 30%, sometimes higher of our sales are international sales. And those have been spread, not necessarily evenly because it depends on the period different areas of the world are doing better than others at different times. But there's a fairly large portion that relates to Europe and EMEA, to the Americas other than the U.S. and also to the Asia-Pacific countries. Obviously, Europe and, in particular, the U.K. has already slowed down due to austerity measures and other reasons and so, we're finding those markets a little more difficult as you would expect. But we're -- while, we're also -- we're diversified in our product offering, we're diversified in our end-users and we're also diversified in our geographic coverage. And so generally, even though there are difficulties in our industry and in different areas of the world, we haven't seen that impact us significantly at least on a consolidated basis. There are areas, obviously, that are being impacted. I think right now, based on the best intelligence that we have about what's going on in the industry, these things generally seem to be soft, not in a position to predict how long that's going to continue but -- and we've seen that in areas of our product offerings too, but on a consolidated basis have been able to overcome that. Tracy can comment on our stock buyback. And I think I've covered your other questions.

Sure. Neil, the stock buyback has -- we have completed the current stock repurchase program that was in place during the quarter at 200,000 shares that were approved to be repurchased. They've all had been repurchased during the quarter.

And are you planning a new buyback?

We really don't comment on those sorts of things ahead of time. But anytime that we have initiated a buyback program, we make a public announcement to that effect shortly after it's enacted.

Your next question comes from Simon Barratt [ph].

[Technical Difficulty]

There are no further questions at this time. I would like to turn the floor back over to management for any closing remarks.

Thank you. Andrew, are there -- were there any submitted by individual shareholders?

No, Neil. There were no questions submitted in advance by individual shareholders this quarter.

Okay. Well, in conclusion then, I'd like to thank everyone for listening in on our call today. We appreciate your thoughtful questions. And as always, we appreciate your time and interest in Optical Cable Corporation. Thank you.

This concludes today's Optical Cable Corporation's third quarter 2012 earnings call. You may now disconnect.