Optical Cable Corporation

Good morning. My name is Shelby and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation first quarter of fiscal year 2023 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. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, please press star two. Mr. Paylash, you may begin your conference.

Terrific. Thank you, Shelby. Good morning, and thank you all for participating in Optical Cable Corporation's first quarter of fiscal year 2023 conference call. By this time, everyone should have a copy of the earnings press release issued earlier today. You can also visit www.occfibre.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 statement 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.

Thank you, Aaron, and good morning, everyone. I'll begin the call today with a few opening remarks. Tracy will then review the first quarter results for the three-month period ended January 31st, 2023, in some additional detail. After Tracy's remarks, we will 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 opportunity 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 today. We are pleased to report a strong start to fiscal year 2023. The OCC team continues to build on our momentum and successfully execute our growth strategies. During the first quarter of fiscal year 2023, we achieved significant growth in net sales, gross profit, gross profit margin, and bottom line results. At the same time, our sales order backlog and forward load continue to be higher than typical levels reflecting the strong demand for our products. Additionally, our results reflect the strength of our operating leverage. As we have noted in the past, OCC has a strong business model, and our operating leverage enables us to grow gross profit and profitability at a faster rate as our fixed production costs and SG&A expenses are spread over higher net sales levels. Our performance continues to be impacted by certain challenging macroeconomic factors, although to a lesser extent than we experienced during the first quarters of fiscal year 2022. Supply chain challenges, including material availability and costs, and even some lingering personnel recruiting challenges, particularly for production personnel, still exist. Importantly, both our supply chain and personnel recruiting have shown improvement during the first quarter of fiscal year 2023, continuing the improvements we experienced toward the end of fiscal year 2022. We will continue to monitor these and other evolving macroeconomic trends, and we believe we are prepared to make appropriate business adjustments as necessary as 2023 continues to unfold. Looking ahead, we remain well positioned in our target markets, and we are confident OCC is on a path towards further shareholder value creation. And with that, I will turn the call over to Tracy, who will review in additional detail our first quarter of fiscal year 2023 financial results. Thank you, Neal.