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Optical Cable (OCC) - 2025 Q4 - Earnings Call Transcript
2025-12-18 17:02
Financial Data and Key Metrics Changes - Consolidated net sales for fiscal year 2025 increased by 9.5% to $73 million compared to $66.7 million for fiscal year 2024 [15] - Gross profit grew by 24.1% to $22.6 million in fiscal 2025 compared to $18.2 million for fiscal 2024, with gross profit margin increasing to 30.9% from 27.3% [16][19] - FC&A expenses as a percentage of net sales decreased to 31.4% in fiscal year 2025 from 32.2% in fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sales increases were noted in both enterprise and specialty markets during fiscal year 2025 [15] - In the fourth quarter of fiscal year 2025, consolidated net sales increased by 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year [16] Market Data and Key Metrics Changes - The sales order backlog and forward load at the end of fiscal year 2025 was $7.3 million compared to $5.7 million as of October 31, 2024 [15] - The company is optimistic about growth opportunities in the data center market, particularly due to the demand for cloud computing and artificial intelligence applications [8][12] Company Strategy and Development Direction - The company entered into a strategic collaboration with Lyttera to expand product offerings and solutions, particularly for the data center and enterprise sectors [9][10] - OCC aims to leverage its core strengths and capabilities to drive long-term value for shareholders, focusing on expanding its presence in targeted market sectors [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for future growth in fiscal year 2026, driven by successful execution of growth strategies [5][13] - The company anticipates that the data center market will provide significant revenue growth opportunities in fiscal year 2026 [21][23] Other Important Information - OCC recorded a net loss of $1.5 million for fiscal year 2025, an improvement from a net loss of $4.2 million in fiscal year 2024 [19] - SG&A expenses increased to $23 million in fiscal year 2025 compared to $21.5 million in fiscal year 2024 [17] Q&A Session Summary Question: Update on the data center opportunity - Management believes the data center markets are strong and will continue to grow, with expectations of revenue growth in fiscal year 2026 [21] Question: Improvements in OCC and markets - OCC continues to see strength in most targeted market sectors, with some project delays but no significant negative impact on growth [22] Question: Potential sales for 2026 and 2027 - Management is optimistic about potential increases in sales based on expected opportunities in fiscal 2026, particularly in the second half [25] Question: Focus on tier two data centers - OCC's products are best suited for tier two or multi-tenant data centers, with significant growth opportunities expected in this segment [29] Question: Capacity constraints - OCC believes it has the capacity to capture expected growth opportunities in fiscal year 2026 [30] Question: Hiring and operational expenses - OCC has open positions primarily in manufacturing, with no significant increase in operating expenses expected [31] Question: Progress of the Lyttera collaboration - The collaboration is going well, with expectations of growing opportunities in fiscal year 2026 [32] Question: Lyttera's investment and demand for OCC - OCC cannot comment on Lyttera's specific business plans or announcements [33]