Earnings Labs

Optical Cable Corporation (OCC)

Q3 2018 Earnings Call· Tue, Sep 11, 2018

$9.39

-11.42%

Key Takeaways · AI generated
AI summary not yet generated for this transcript. Generation in progress for older transcripts; check back soon, or browse the full transcript below.

Same-Day

-2.05%

1 Week

+0.00%

1 Month

+45.75%

vs S&P

+51.59%

Transcript

Operator

Operator

Good morning. My name is Maria, and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation Third Quarter 2018 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] Thank you. Mr. Siegel, you may begin your conference.

Andrew Siegel

Analyst

Thank you. Good morning, and thank you all for participating on Optical Cable Corporation’s third quarter of fiscal year 2018 conference call. By this time, everyone should have a copy of the earnings press release issued earlier today. You can also visit occfiber.com for a copy. On the call with us today are Neil Wilkin, President and Chief Executive Officer of OCC; and Tracy Smith, Senior Vice President and Chief Financial Officer. 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 and risks 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 www.occfiber.com, as well as today's call. With that, I'll turn the call over to Neil Wilkin. Neil, please begin.

Neil Wilkin

Analyst

Thank you, Andrew, and good morning, everyone. Before we begin our conference call today, I'd like to pause for a moment of silence to honor those who perished in the terrible terrorist attacks on our country 17 years ago today in New York, Pennsylvania, and Virginia. You need to honor those men and women who have served and are serving our country around the world to protect our freedom and liberty. Thank you. I'll begin today's call with a few opening remarks regarding our third quarter of fiscal year 2018. Tracy will then review the third quarter results for the three-month and nine-month period ended July 31, 2018 and some additional detail. After Tracy's remarks, we'll answer as many of your questions as we can. As is our normal practice, we will only take questions from analysts and institutional investors during the Q&A session. However, we also offer other shareholders the opportunities to submit questions in advance of our earnings call. Instructions regarding such submissions are included in our press release announcing the date and time of our call. We are pleased to report continued growth of net sales, gross profit, and earnings for the quarter and year-to-date periods. Our positive third quarter results reflect a continued momentum of our growth strategies and demonstrate as you see strong operating leverage at higher sales levels. Net sales during the third quarter of fiscal 2018 increased over 40% to $23.1 million, and net sales during the first nine months of fiscal 2018 increased over 44% to $67.6 million in both cases when compared to the same periods last year. As far as this fiscal year goes, we have seen particular strength in a number of our specialty markets, including our military market and importantly our wireless carrier market, both of which can…

Tracy Smith

Analyst

Thank you, Neil. Consolidated net sales for the third quarter of fiscal 2018 were $23.1 million, an increase of 40.7% compared to net sales of $16.4 million for the third quarter of fiscal 2017. Consolidated net sales for the first nine months of fiscal 2018 were $67.6 million, an increase of 44.1% compared to the net sales of $46.9 million for the first nine months of fiscal 2017. We increased net sales in our specialty markets in the third quarter and first nine months of fiscal 2018 compared to the same periods last year, particularly in our wireless carrier and military markets. This increase was partially offset by a decrease in net sales in our enterprise markets. OCC's increase in net sales during the third quarter and the first nine months of fiscal year 2018 have been driven by significant orders from one customer with whom OCC has done business for a number of years. As of July 31, 2018, our sales order backlog and forward load was $8.6 million, or approximately five to six weeks of net sales on a trailing 12-month basis. By comparison, our sales order backlog and forward load was $11.8 million or approximately seven to eight weeks of net sales on a trailing 12-month basis as of the end of our second quarter of fiscal year 2018. Our sales order backlog and forward load can vary throughout the year, but in generally between approximately three to four weeks of net sales or approximately $4 million to $5 million. Based on our current backlog and forward load, we believe we may see a positive impact on net sales during the fourth quarter of fiscal 2018 compared to the same period last year. However, at this time we anticipate net sales during the fourth quarter to be…

Neil Wilkin

Analyst

Thank you, Tracy. And now, if you have any questions, we are happy to answer them. Maria, if you could please indicate the instructions for our participants to call in any questions they may have, I would appreciate it.

Operator

Operator

[Operator Instructions] Thank you. And I'm showing no questions at this time, sir.

Neil Wilkin

Analyst

Okay. Thank you, Maria. Andrew, are there any questions that were submitted by individual investors in advance of today's call?

Andrew Siegel

Analyst

Neil, we did not get any questions from individual shareholders this quarter. So, I think there are no questions apparently. So, I guess we can wrap up the call.

Neil Wilkin

Analyst

Okay. Thank you. I would like to thank everyone for listening to our third quarter conference call today. And as always, we appreciate your time and your interest in OCC. Have a nice day.

Operator

Operator

Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect.