Optical Cable Corporation

Welcome to the third quarter 2023 earnings call on September 12, 2023. At any time during the program, you may pause, fast forward, or back up the program with a single keystroke. Please take a moment to write this down. To pause, press the 8 on your touchtone phone. To fast forward, press 9. And to back up, press 7. Retrieving your conference recording. One moment, please. Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation third 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 2. Mr. Palish, you may begin your conference.

Thank you, Angela. Good morning, and thank you all for joining us for Obstacle Cable Corporation's third quarter 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.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 Optimal 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 will begin the call today with a few opening remarks. Tracy will then review the third quarter results for the three-month and nine-month periods ended July 31st, 2023, in some additional detail. After Tracy's remarks, we will answer as many 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. Before we discuss the third quarter, I want to note that yesterday was, of course, the anniversary of the September 11th attacks on our homeland. We are incredibly grateful for all of those who have served and those who continue to serve for their sacrifices for our country and our freedom. The OCC team is proud of the work we do to support our armed services and first responders. OCC is honored to be trusted with the responsibility of manufacturing and supplying our mission-critical products to our country's military, first responders, and other essential workers, including healthcare facilities and hospitals. And now, turning to the third quarter of fiscal year 2023, With year-over-year increases in key metrics during the first nine months of fiscal year 2023, including net sales, gross profit, gross profit margin, operating income, and net income, our results so far this year reflect the OCC team's hard work and success executing our strategy in a dynamic market. Looking at the third quarter of fiscal year 2023, our gross profit increased 6.4%, and our gross profit margins also increased, even while our net sales decreased 2.5%, all when compared to the third quarter of fiscal year 2022. In certain of our specialty markets, we continue to see robust demand for our diversified suite of mission-critical cabling and connectivity products and solutions, even while certain of our other targeted markets like the enterprise and wireless carrier markets, are softening at this time, consistent with the industry trends. One of OCC's core strengths is and continues to be our diversified revenue base with a broad range of industries and markets served. And we benefited from this diversification during the third quarter of fiscal 2023. Our sales order backlog and forward load remains at higher than typical levels, but had decreased by the end of the third quarter of fiscal year 2023 compared to the end of the second quarter of fiscal year 2023. Looking forward, while certain of our markets are showing signs of continued softness, including our enterprise and wireless carrier markets, we believe certain of our other markets are showing signs of continued strength. We are continuing to monitor the evolving macroeconomic trends, industry trends, and potential risks that could impact our business. We are continuing to execute our strategic initiatives and are committed to capturing demand, driving growth, working safely, and operating efficiently. As we move into the fourth quarter of fiscal year 2023 and beyond, we are focused as ever on finishing the fiscal year strong, serving our valued customers and end users, and driving enhanced value for shareholders. And with that, I will turn the call over to Tracy, who will review in additional detail our third quarter of fiscal year 2023 financial results.