Q4 2025 Optical Cable Corp Earnings Call

December 18, 2025

Speaker #2: Please stand by. Your meeting is about to begin. Good morning. My name is Stephanie, and I'll be your conference operator today. At this time, I'd like to welcome you to Optical Cable Corporation's fourth quarter and fiscal year 2025 earnings conference call.

Operator: Please stand by. Your meeting is about to begin. Good morning. My name is Stephanie, and I'll be your conference operator today. At this time, I'd like to welcome you to Optical Cable Corporation's fourth quarter and fiscal year 2025 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'd like to ask a question at that time, please press star one on your telephone keypad. If you wish to remove yourself from queue, please press star two. Ms. Felix, you may begin your conference.

Speaker #2: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. If you'd like to ask a question at that time, please press star one on your telephone keypad.

Speaker #2: If you wish to remove yourself from the queue, please press star two. Ms. Felix, you may begin your conference. Good morning, and thank you for joining us for Optical Cable Corporation's fourth quarter and fiscal year 2025 conference call.

Caroline Felix: Good morning, and thank you for joining us for Optical Cable Corporation's fourth quarter and fiscal year 2025 conference call. By this time, everybody 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 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.

Speaker #2: By this time, everybody 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.

Speaker #2: 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.

Speaker #2: To the contents of the Internet, these cautionary statements apply. Webcast on www.occfiber.com, as well as today's call. With that, I'll turn the call over to Neil Wilkin.

Caroline Felix: With that, I'll turn the call over to Neil Wilkin. Neil, please begin.

With that, I'll turn the call over to Neil Wilkin. Neil, please begin.

Speaker #2: Neil, please begin.

Speaker #3: Thank you, Caroline, and good morning, everyone. I will begin the call today with a few opening remarks. Tracy will then review the fourth quarter and full year results for the three-month and 12-month periods ended October 31, 2025, and provide some additional detail.

Neil Wilkin: Thank you, Caroline, and good morning, everyone. I will begin the call today with a few opening remarks. Tracy will then review the Q4 and full year results for the three-month and 12-month periods ended 31 October 2025, 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. Fiscal year 2025 was a solid year for OCC, driven by the successful execution of our growth strategies and strong positioning in our target markets.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: Fiscal year 2025 was a solid year for OCC, driven by the successful execution of our growth strategies and strong positioning in our target markets.

Speaker #3: We entered into a strategic collaboration with Laterra that expands our growth opportunities, which we believe will be reflected in our top line in fiscal year 2026 and beyond.

Neil Wilkin: We entered into a strategic collaboration with Laterra that expands our growth opportunities, which we believe will be reflected in our top line in fiscal year 2026 and beyond. At the same time, we continue to operate efficiently and benefit from our strong operating leverage to drive gross profit growth. In fiscal year 2025, we realized the benefits of actions we took the previous year, as the weakness across our industry during the second half of fiscal year 2023 and most of fiscal year 2024 subsided. As a result, in 2025, we were able to capture new opportunities and deliver consolidated net sales of $73 million. Our net sales increased during each quarter of fiscal year 2025 compared to the same periods in fiscal year 2024. I'm pleased to share that OCC achieved growth by all measures during fiscal year 2025. Net sales grew by 9.5%.

We entered into a strategic collaboration with Laterra that expands our growth opportunities, which we believe will be reflected in our top line in fiscal year 2026 and beyond. At the same time, we continue to operate efficiently and benefit from our strong operating leverage to drive gross profit growth. In fiscal year 2025, we realized the benefits of actions we took the previous year, as the weakness across our industry during the second half of fiscal year 2023 and most of fiscal year 2024 subsided. As a result, in 2025, we were able to capture new opportunities and deliver consolidated net sales of $73 million. Our net sales increased during each quarter of fiscal year 2025 compared to the same periods in fiscal year 2024. I'm pleased to share that OCC achieved growth by all measures during fiscal year 2025. Net sales grew by 9.5%.

Speaker #3: At the same time, we continue to operate efficiently and benefit from our strong operating leverage to drive gross profit growth. In fiscal year 2025, we realized the benefits of actions we took the previous year.

Speaker #3: As the weakness across our industry during the second half of fiscal year 2023 and most of fiscal year 2024 subsided, as a result, in 2025, we were able to capture new opportunities and deliver consolidated net sales of $73 million.

Speaker #3: Our net sales increased during each quarter of fiscal year 2025, compared to the same periods in fiscal year 2024. I'm pleased to share that OCC achieved growth by all measures during fiscal year 2025.

Speaker #3: Net sales grew by 9.5%. Gross profit grew by 24.1%. Gross profit margin increased to 30.9% compared to 27.3%. And FC&A expenses decreased as a percentage of net sales.

Neil Wilkin: Gross profit grew by 24.1%. Gross profit margin increased to 30.9% compared to 27.3%. FC&A expenses decreased as a percentage of net sales, all contributing factors to the significant improvements in operating results compared to fiscal year 2024. OCC benefited from strong operating leverage in fiscal year 2025, and we anticipate this will continue to bolster our results in fiscal year 2026 and beyond. Our manufacturing operating leverage tends to create disproportional increases in gross profit as net sales and production volumes increase. While both gross profit and gross profit margin can be impacted by product mix, as OCC's net sales and production volumes increase, substantial fixed costs are spread over higher sales volumes. Importantly, manufacturing efficiencies also tend to increase, particularly for fiber optic cable production. Gross profit disproportionately increased 24.1% as net sales increased 9.5% during fiscal year 2025.

Gross profit grew by 24.1%. Gross profit margin increased to 30.9% compared to 27.3%. FC&A expenses decreased as a percentage of net sales, all contributing factors to the significant improvements in operating results compared to fiscal year 2024. OCC benefited from strong operating leverage in fiscal year 2025, and we anticipate this will continue to bolster our results in fiscal year 2026 and beyond. Our manufacturing operating leverage tends to create disproportional increases in gross profit as net sales and production volumes increase. While both gross profit and gross profit margin can be impacted by product mix, as OCC's net sales and production volumes increase, substantial fixed costs are spread over higher sales volumes. Importantly, manufacturing efficiencies also tend to increase, particularly for fiber optic cable production. Gross profit disproportionately increased 24.1% as net sales increased 9.5% during fiscal year 2025.

Speaker #3: All contributing factors to the significant improvements in operating results compared to fiscal year 2024. OCC benefited from strong operating leverage in fiscal year 2025, and we anticipate this will continue to bolster our results in fiscal year 2026 and beyond.

Speaker #3: Our manufacturing operating leverage tends to create disproportional increases in gross profit as net sales and production volumes increase. While both gross profit and gross profit margin can be impacted by product mix, as OCC's net sales and production volumes increase, substantial fixed costs are spread over higher sales volumes.

Speaker #3: And importantly, manufacturing efficiencies also tend to increase, particularly for fiber optic cable production. Gross profit disproportionately increased 24.1% as net sales increased 9.5% during fiscal year 2025.

Speaker #3: Our FC&A operating leverage also tends to be positively impacted by efficiency—excuse me, tends to positively impact efficiency and profitability as net sales increase. Many FC&A expenses are relatively fixed cost.

Neil Wilkin: Our FC&A operating leverage also tends to be positively impacted by efficiency and profitability as net sales increase. Many FC&A expenses are relatively fixed costs rather than varying with net sales, including significant public company costs. As a result, OCC's FC&A expenses as a percentage of net sales typically decrease with increased net sales. OCC's commitment to pursuing new growth opportunities, including expanding our presence in targeted market sectors and the enhancement of our product solutions offerings, including those resulting from our strategic collaboration with Laterra, will fuel our future success. As demand for cloud computing and artificial intelligence applications continues to accelerate, OCC is capturing the opportunity by expanding our existing presence and product solutions offerings for the data center market. We have continued to expand and innovate both our fiber optic cable product solutions offerings and our cable and connectivity product solutions offerings.

Our FC&A operating leverage also tends to be positively impacted by efficiency and profitability as net sales increase. Many FC&A expenses are relatively fixed costs rather than varying with net sales, including significant public company costs. As a result, OCC's FC&A expenses as a percentage of net sales typically decrease with increased net sales. OCC's commitment to pursuing new growth opportunities, including expanding our presence in targeted market sectors and the enhancement of our product solutions offerings, including those resulting from our strategic collaboration with Laterra, will fuel our future success. As demand for cloud computing and artificial intelligence applications continues to accelerate, OCC is capturing the opportunity by expanding our existing presence and product solutions offerings for the data center market. We have continued to expand and innovate both our fiber optic cable product solutions offerings and our cable and connectivity product solutions offerings.

Speaker #3: Rather than varying with net sales, including significant public company costs. As a result, OCC's FC&A expenses as a percentage of net sales typically decrease with increased net sales.

Speaker #3: OCC's commitment to pursuing new growth opportunities, including expanding our presence in targeted market sectors and the enhancement of our product solutions offerings—including those resulting from our strategic collaboration with Laterra—will fuel our future success.

Speaker #3: As demand for cloud computing and artificial intelligence applications continues to accelerate, OCC is capturing the opportunity by expanding our existing presence and product solutions offerings for the data center market.

Speaker #3: We have continued to expand and innovate both our fiber optic cable product solutions offerings and our cable and connectivity product solutions offerings. As previously announced in July 2025, OCC and Laterra entered into a strategic collaboration agreement to expand product offerings and solutions, especially for the data center and enterprise sectors.

Neil Wilkin: As previously announced in July 2025, OCC and Laterra entered into a strategic collaboration agreement to expand product offerings and solutions, especially for the data center and enterprise sectors. As a global leader in fiber optic and connectivity solutions, Laterra has a long history of industry-leading innovation design and manufacturing capabilities, including the production of high-performance optical fibers. As respected manufacturers in the fiber optic industry, OCC and Laterra have partnered in various ways over many years. This strategic collaboration builds on that long, successful relationship. Through this strategic collaboration, OCC and Laterra expect to benefit from offering expanded fiber optic, copper cabling, and connectivity solutions to the enterprise, and data center sectors, as well as an expanded presence in other sectors.

As previously announced in July 2025, OCC and Laterra entered into a strategic collaboration agreement to expand product offerings and solutions, especially for the data center and enterprise sectors. As a global leader in fiber optic and connectivity solutions, Laterra has a long history of industry-leading innovation design and manufacturing capabilities, including the production of high-performance optical fibers. As respected manufacturers in the fiber optic industry, OCC and Laterra have partnered in various ways over many years. This strategic collaboration builds on that long, successful relationship. Through this strategic collaboration, OCC and Laterra expect to benefit from offering expanded fiber optic, copper cabling, and connectivity solutions to the enterprise, and data center sectors, as well as an expanded presence in other sectors.

Speaker #3: As a global leader in fiber optic and connectivity solutions, Laterra has a long history of industry-leading innovation, design, and manufacturing capabilities, including the production of high-performance optical fibers.

Speaker #3: As respected manufacturers in the fiber optic industry, OCC and Laterra have partnered in various ways over many years. In this strategic collaboration, built on that long, successful relationship.

Speaker #3: Through this strategic collaboration, OCC and Laterra expect to benefit from offering expanded fiber optic and copper cabling and connectivity solutions to the enterprise and data center sectors, as well as an expanded presence in other sectors.

Speaker #3: The companies have combined portions of the extensive product portfolios of both OCC and Laterra to deliver integrated cabling and connectivity solutions offerings that will be sold by OCC.

Neil Wilkin: The companies have combined portions of the extensive product portfolios of both OCC and Laterra to deliver integrated cabling and connectivity solutions offerings that will be sold by OCC. In connection with this strategic collaboration, Laterra has made an investment in OCC, purchasing shares of OCC common stock from OCC, and resulting in Laterra holding 7.24% of OCC's outstanding shares. Looking ahead, OCC remains uniquely positioned in the fiber optic and copper cabling and connectivity industry with differentiated core strengths and capabilities that enable us to offer top-tier products and application solutions and to compete successfully against much larger competitors. OCC is committed to enhancing and leveraging our core strengths and capabilities to drive long-term value for our shareholders. I'd like to highlight a few of those strengths for you today.

The companies have combined portions of the extensive product portfolios of both OCC and Laterra to deliver integrated cabling and connectivity solutions offerings that will be sold by OCC. In connection with this strategic collaboration, Laterra has made an investment in OCC, purchasing shares of OCC common stock from OCC, and resulting in Laterra holding 7.24% of OCC's outstanding shares. Looking ahead, OCC remains uniquely positioned in the fiber optic and copper cabling and connectivity industry with differentiated core strengths and capabilities that enable us to offer top-tier products and application solutions and to compete successfully against much larger competitors. OCC is committed to enhancing and leveraging our core strengths and capabilities to drive long-term value for our shareholders. I'd like to highlight a few of those strengths for you today.

Speaker #3: In connection with this strategic collaboration, Laterra has made an investment in OCC, purchasing shares of OCC common stock from OCC, resulting in Laterra holding 7.24% of OCC's outstanding shares.

Speaker #3: Looking ahead, OCC remains uniquely positioned in the fiber optic and copper cabling and connectivity industry, with differentiated core strengths and capabilities that enable us to offer top-tier products and application solutions to compete successfully against much larger competitors.

Speaker #3: OCC is committed to enhancing and leveraging our core strengths and capabilities to drive long-term value for our shareholders. I'd like to highlight a few of those strengths for you today.

Speaker #3: First is our strong market positions, brand recognition, and long-term industry relationships with loyal customers, decision makers and specifiers, installers and integrators, and end users across a broad range of targeted market sectors.

Neil Wilkin: First is our strong market positions, brand recognition, and long-term industry relationships with loyal customers, decision-makers, and specifiers, installers, and integrators, and end users across a broad range of targeted market sectors. Second is our extensive industry experience and expertise in OCC's engineering, sales, and business development teams who are well-respected for their product and application experience and expertise, which enables OCC to create and offer its portfolio of innovative, high-performance products. Next, OCC has a growing portfolio of innovative fiber optic and copper cabling and connectivity products and solutions that enable us to meet the unique needs of our customers and end users as they are well-suited for the applications in our various targeted market sectors. We have significant production availability at our facilities, supported by knowledgeable and experienced manufacturing quality and engineering teams.

First is our strong market positions, brand recognition, and long-term industry relationships with loyal customers, decision-makers, and specifiers, installers, and integrators, and end users across a broad range of targeted market sectors. Second is our extensive industry experience and expertise in OCC's engineering, sales, and business development teams who are well-respected for their product and application experience and expertise, which enables OCC to create and offer its portfolio of innovative, high-performance products. Next, OCC has a growing portfolio of innovative fiber optic and copper cabling and connectivity products and solutions that enable us to meet the unique needs of our customers and end users as they are well-suited for the applications in our various targeted market sectors. We have significant production availability at our facilities, supported by knowledgeable and experienced manufacturing quality and engineering teams.

Speaker #3: Second is our extensive industry experience and expertise in OCC's engineering, sales, and business development teams, who are well-respected for their product and application experience and expertise, which enables OCC to create and offer its portfolio of innovative high-performance products.

Speaker #3: Next, OCC has a growing portfolio of innovative fiber optic and copper cabling and connectivity products and solutions that enable us to meet the unique needs of our customers and end users, as they are well-suited for the applications in our various targeted market sectors.

Speaker #3: We have significant availability of production capacity at our facilities, supported by knowledgeable and experienced manufacturing, quality, and engineering teams. Finally, our broad and diverse geographic footprint enables us to sell into approximately 50 countries every year.

Neil Wilkin: Finally, our broad and diverse geographic footprint enables us to sell into approximately 50 countries every year. OCC has earned an exceptional reputation for its service excellence, innovation, and entrepreneurial spirit, and we have built a team that embodies OCC's core strengths and capabilities. As we turn to fiscal year 2026, we are optimistic about our growth opportunities, encouraged by our successes this past year, and excited to build on the growing momentum we are creating in our targeted market sectors. We look forward to leveraging our strengths and executing our strategies and initiatives to create long-term value for our shareholders. I'd like to thank the OCC team for its hard work, its commitment to OCC, and those that count on us. Your contributions to the team's accomplishment this past year have been significant.

Finally, our broad and diverse geographic footprint enables us to sell into approximately 50 countries every year. OCC has earned an exceptional reputation for its service excellence, innovation, and entrepreneurial spirit, and we have built a team that embodies OCC's core strengths and capabilities. As we turn to fiscal year 2026, we are optimistic about our growth opportunities, encouraged by our successes this past year, and excited to build on the growing momentum we are creating in our targeted market sectors. We look forward to leveraging our strengths and executing our strategies and initiatives to create long-term value for our shareholders. I'd like to thank the OCC team for its hard work, its commitment to OCC, and those that count on us. Your contributions to the team's accomplishment this past year have been significant.

Speaker #3: OCC has earned an exceptional reputation for its service excellence, innovation, and entrepreneurial spirit, and we have built a team that embodies OCC's core strengths and capabilities.

Speaker #3: As we turn to fiscal year 2026, we are optimistic about our growth opportunities. We are encouraged by our successes this past year and excited to build on the growing momentum we are creating in our targeted market sectors.

Speaker #3: We look forward to leveraging our strengths and executing our strategies and initiatives to create long-term value for our shareholders. I'd like to thank the OCC team for its hard work, its commitment to OCC, and those that count on us.

Speaker #3: Your contributions to the team's accomplishment this past year have been significant. Much has been accomplished by the OCC team this year, and we are confident we are well-positioned for future growth in 2026 and beyond.

Neil Wilkin: Much has been accomplished by the OCC team this year, and we are confident we are well-positioned for future growth in 2026 and beyond. I'd also like to thank our shareholders for your continued support of OCC. With that, I'll turn the call over to Tracy, who will review in additional detail our fourth quarter and fiscal year 2025 financial results.

Much has been accomplished by the OCC team this year, and we are confident we are well-positioned for future growth in 2026 and beyond. I'd also like to thank our shareholders for your continued support of OCC. With that, I'll turn the call over to Tracy, who will review in additional detail our fourth quarter and fiscal year 2025 financial results.

Speaker #3: I'd also like to thank our shareholders for your continued support of OCC, and with that, I'll turn the call over to Tracy, who will review additional detail of our fourth quarter and fiscal year 2025 financial results.

Speaker #2: Thank you, Neil. Consolidated net sales for fiscal year 2025 increased 9.5% to $73.0 million, compared to net sales of $66.7 million for fiscal year 2024, with sales increases in both our enterprise and specialty markets.

Tracy Smith: Thank you, Neil. Consolidated net sales for fiscal year 2025 increased 9.5% to $73 million compared to net sales of $66.7 million for fiscal year 2024, with sales increases in both our enterprise and specialty markets. At the end of fiscal year 2025, our sales order backlog and forward load was $7.3 million compared to $5.7 million as of 31 October 2024. Looking forward, we anticipate additional growth opportunities during fiscal year 2026. We continue to expand our product solutions offering for the data center market as demand for cloud computing and artificial intelligence applications continues to accelerate. Consolidated net sales for the fourth quarter of fiscal year 2025 increased 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year.

Speaker #2: At the end of fiscal year 2025, our sales order backlog and forward load was $7.3 million, compared to $5.7 million as of October 31, 2024.

Speaker #2: Looking forward, we anticipate additional growth opportunities during fiscal year 2026. We continue to expand our product solutions offering for the data center market, as demand for cloud computing and artificial intelligence applications continues to accelerate.

Speaker #2: Consolidated net sales for the fourth quarter of fiscal year 2025 increased 1.8% to $19.8 million, compared to $19.5 million for the same period in the prior year.

Speaker #2: We experienced an increase in net sales in both our enterprise and specialty markets during the fourth quarter of fiscal year 2025 compared to the fourth quarter of fiscal year 2024.

Tracy Smith: We experienced an increase in net sales in both our enterprise and specialty markets during the fourth quarter of fiscal year 2025 compared to the fourth quarter of fiscal year 2024. Sequentially, OCC's net sales decreased less than 1% during the fourth quarter of fiscal year 2025 compared to net sales of $19.9 million for the third quarter of fiscal 2025. Turning to gross profits, our gross profit increased 24.1% to $22.6 million in fiscal 2025 compared to $18.2 million for fiscal 2024. Gross profit margin, our gross profit as a percentage of net sales, increased to 30.9% during fiscal 2025, up from 27.3% for 2024. Gross profit margin for fiscal year 2025 was positively impacted by higher volumes as fixed charges were spread over higher sales, the impact of operating leverage.

We experienced an increase in net sales in both our enterprise and specialty markets during the fourth quarter of fiscal year 2025 compared to the fourth quarter of fiscal year 2024. Sequentially, OCC's net sales decreased less than 1% during the fourth quarter of fiscal year 2025 compared to net sales of $19.9 million for the third quarter of fiscal 2025. Turning to gross profits, our gross profit increased 24.1% to $22.6 million in fiscal 2025 compared to $18.2 million for fiscal 2024. Gross profit margin, our gross profit as a percentage of net sales, increased to 30.9% during fiscal 2025, up from 27.3% for 2024. Gross profit margin for fiscal year 2025 was positively impacted by higher volumes as fixed charges were spread over higher sales, the impact of operating leverage.

Speaker #2: Sequentially, OCC's net sales decreased less than 1% during the fourth quarter of fiscal year 2025, compared to net sales of $19.9 million for the third quarter of fiscal 2025.

Speaker #2: Turning to gross profits, our gross profit increased 24.1% to $22.6 million in fiscal 2025, compared to $18.2 million for fiscal 2024. Gross profit margin, our gross profit as a percentage of net sales, increased to 30.9% during fiscal 2025, up from 27.3% for 2024.

Speaker #2: Gross profit margin for fiscal year 2025 was positively impacted by higher volumes of fixed charges that were spread over higher sales. This reflects the impact of operating leverage.

Speaker #2: Additionally, our gross profit margin percentages are heavily dependent upon product mix on a quarterly basis and may vary based on changes in product mix.

Tracy Smith: Additionally, our gross profit margin percentages are heavily dependent upon product mix on a quarterly basis and may vary based on changes in product mix. Gross profit decreased slightly to $6.3 million in Q4 of fiscal 2025 compared to $6.5 million for the same period last year. Gross profit margin decreased to 31.9% in Q4 of fiscal 2025 compared to 33.5% in Q4 of fiscal 2024. During Q4 of fiscal year 2025, there was no significant change in the gross profit when compared to Q3 of fiscal 2025. Gross profit margin sequentially increased to 31.9% in Q4 of fiscal 2025 compared to 31.7% during Q3 of fiscal 2025. FC&A expenses increased to $23 million in fiscal year 2025 compared to $21.5 million in fiscal year 2024.

Additionally, our gross profit margin percentages are heavily dependent upon product mix on a quarterly basis and may vary based on changes in product mix. Gross profit decreased slightly to $6.3 million in Q4 of fiscal 2025 compared to $6.5 million for the same period last year. Gross profit margin decreased to 31.9% in Q4 of fiscal 2025 compared to 33.5% in Q4 of fiscal 2024. During Q4 of fiscal year 2025, there was no significant change in the gross profit when compared to Q3 of fiscal 2025. Gross profit margin sequentially increased to 31.9% in Q4 of fiscal 2025 compared to 31.7% during Q3 of fiscal 2025. FC&A expenses increased to $23 million in fiscal year 2025 compared to $21.5 million in fiscal year 2024.

Speaker #2: Gross profit decreased slightly to $6.3 million in the fourth quarter of fiscal 2025, compared to $6.5 million for the same period last year. Gross profit margin decreased to 31.9% in the fourth quarter of fiscal 2025, compared to 33.5% in the fourth quarter of fiscal 2024.

Speaker #2: During the fourth quarter of fiscal year 2025, there was no significant change in the gross profit when compared to the third quarter of fiscal 2025.

Speaker #2: Gross profit margins sequentially increased to 31.9% in the fourth quarter of fiscal 2025, compared to 31.7% during the third quarter of fiscal 2025. SG&A expenses increased to $23 million in fiscal year 2025, compared to $21.5 million in fiscal year 2024.

Speaker #2: SG&A expenses as a percentage of net sales were 31.4% in fiscal year 2025, compared to 32.2% in fiscal year 2024. SG&A expenses increased to $6 million in the fourth quarter of fiscal 2025, compared to $5.9 million for the same period last year.

Tracy Smith: FC&A expenses as a percentage of net sales were 31.4% in fiscal year 2025 compared to 32.2% in fiscal year 2024. FC&A expenses increased to $6 million in the fourth quarter of fiscal 2025 compared to $5.9 million for the same period last year. FC&A expenses as a percentage of net sales were 30.4% during the fourth quarter of 2025 compared to 30% during the same period of fiscal year 2024. The increase in FC&A expenses during the fourth quarter and fiscal year 2025 compared to the same period last year was primarily the result of increases in employee and contracted sales personnel-related costs, and shipping costs. Included in employee and contracted sales personnel-related costs are compensation costs and sales incentives.

FC&A expenses as a percentage of net sales were 31.4% in fiscal year 2025 compared to 32.2% in fiscal year 2024. FC&A expenses increased to $6 million in the fourth quarter of fiscal 2025 compared to $5.9 million for the same period last year. FC&A expenses as a percentage of net sales were 30.4% during the fourth quarter of 2025 compared to 30% during the same period of fiscal year 2024. The increase in FC&A expenses during the fourth quarter and fiscal year 2025 compared to the same period last year was primarily the result of increases in employee and contracted sales personnel-related costs, and shipping costs. Included in employee and contracted sales personnel-related costs are compensation costs and sales incentives.

Speaker #2: SG&A expenses as a percentage of net sales were 30.4% during the fourth quarter of 2025, compared to 30% during the same period of fiscal year 2024.

Speaker #2: The increase in SG&A expenses during the fourth quarter and fiscal year 2025, compared to the same periods last year, was primarily the result of increases in employee and contracted sales personnel-related costs and shipping costs.

Speaker #2: Included in employee and contracted sales personnel-related costs are compensation costs and sales incentives. While profitable during the second half of fiscal 2025, OCC recorded a net loss of $1.5 million, or $0.18 per basic and diluted share, for fiscal year 2025 compared to $4.2 million, or $0.54 per basic and diluted share, for fiscal year 2024.

Tracy Smith: While profitable during the second half of fiscal 2025, OCC recorded a net loss of $1.5 million or $0.18 per basic and diluted share for fiscal year 2025 compared to $4.2 million or $0.54 per basic and diluted share for the fiscal year 2024. OCC recorded net income of $49,000 or $0.01 per basic and diluted share for the fourth quarter of fiscal 2025 compared to net income of $373,000 or $0.05 per basic and diluted share for the fourth quarter of fiscal 2024. With that, I'll turn the call back over to you, Neil.

While profitable during the second half of fiscal 2025, OCC recorded a net loss of $1.5 million or $0.18 per basic and diluted share for fiscal year 2025 compared to $4.2 million or $0.54 per basic and diluted share for the fiscal year 2024. OCC recorded net income of $49,000 or $0.01 per basic and diluted share for the fourth quarter of fiscal 2025 compared to net income of $373,000 or $0.05 per basic and diluted share for the fourth quarter of fiscal 2024. With that, I'll turn the call back over to you, Neil.

Speaker #2: OCC recorded net income of $49,000, or $0.01 per basic and diluted share for the fourth quarter of fiscal 2025, compared to net income of $373,000, or $0.05 per basic and diluted share for the fourth quarter of fiscal 2024.

Speaker #2: And with that, I'll turn the call back over to you.

Speaker #2: Neil. Thank

Speaker #3: You, Tracy, we have received a number of questions in advance of the call today, and we believe that those would be of interest to most participants.

Neil Wilkin: Thank you, Tracy. We have received a number of questions in advance of the call today, and we believe that those would be of interest to most participants. So we're going to go through those questions first, and then we will address any remaining live questions from analysts and institutional investors. Because some of those questions overlapped, we did try to combine them in a manner that we're addressing the core questions that were submitted in advance. Caroline, if you could please read the questions, we're happy to provide our responses.

Speaker #3: So we're going to go through those questions first, and then we will address any remaining live questions from analysts and institutional investors. Because some of those questions overlap, we did try to combine them in a manner that we're addressing the core questions that were submitted in advance.

Speaker #3: Caroline, if you could please read the questions, we're happy to provide our answers.

Speaker #3: responses. Thanks, Neil.

Caroline Felix: Thanks, Neil. The first question is, can you update us on the data center opportunity in general, how you feel about it, if the opportunity has strengthened or not during the quarter, and any major changes or updates?

Speaker #4: The first question is: Can you update us on the data center opportunity in general? How do you feel about it, if the opportunity has strengthened or not during the quarter, and any major changes or updates?

Speaker #3: Yes. We believe, like others in our industry, that the data center markets are strong and will continue to grow. I wouldn't say that it had a significant impact in our fourth quarter, but we believe that it will start to impact us in fiscal year 2026.

Neil Wilkin: Yes. We believe, like others in our industry, that the data center markets are strong and will continue to grow. I wouldn't say that it had a significant impact in our Q4, but we believe that it will start to impact us in fiscal year 2026. OCC has a presence in the data center market with established market relationships as well as products. Of course, as you all know, OCC's products are best suited for multi-tenant data centers or MTDCs, and enterprise data centers, sometimes referred to as Tier 2 and Tier 3 data centers. We're currently working to expand our presence in portions of the data center market, and we're optimistic that the data center market, particularly the multi-tenant data centers, and the enterprise data centers, will provide an opportunity for revenue growth in fiscal year 2026 for OCC.

Speaker #3: OCC has a presence in the data center market with established market relationships as well as products. Of course, as you all know, OCC's products are best suited for multi-tenant data centers, or MTDCs, and enterprise data centers, sometimes referred to as Tier 2 and Tier 3 data centers.

Speaker #3: We're currently working to expand our presence in portions of the data center market, and we're optimistic that the data center market, particularly the multi-tenant data centers and the enterprise data centers, will provide an opportunity for revenue growth in fiscal year 2026 for OCC.

Speaker #4: Thanks, Neil. Next question is: over the last quarters, you have been commenting on improvements in OCC and markets. Have those improvements continued into Q4?

Caroline Felix: Thanks, Neil. The next question is, over the last quarter, you have been commenting on improvements in OCC and markets. Have those improvements continued into Q4? Can you comment on new and emerging trends or risks?

Speaker #4: Can you comment on new and emerging trends or risks?

Speaker #3: Yes, OCC continues to see strength in most of our targeted market sectors. There are certain market sectors where we've seen some projects delayed, but we do not believe that this has negatively impacted OCC's growth this year, or that it would negatively impact OCC's growth in fiscal year 2026.

Neil Wilkin: Yes. OCC continues to see strength in most of our targeted market sectors. There are certain market sectors where we've seen some projects delayed, but we do not believe that this has negatively impacted OCC's growth this year or that it would negatively impact OCC's growth in fiscal year 2026. We also believe that the continued growth opportunities in OCC's targeted market sectors for fiscal year 2026 continue to be significant. Of course, as we have said in the past and experienced in the past, during the first half of each year, OCC does experience the impact of seasonality. As of now, we currently expect that to be the case as well.

Speaker #3: We also believe that the continued growth opportunities in OCC's targeted market sectors for fiscal year 2026 continue to be significant. Of course, as we have said in the past and experienced in the past, during the first half of each year, OCC does experience the impact of seasonality.

Speaker #3: And as of now, we currently expect that to be the case as well.

Speaker #3: well. Thanks, Neil.

Caroline Felix: Thanks, Neil. The next question is whether you believe OCC will have any hyperscale data center opportunities.

Speaker #4: The next question is whether you believe OCC will have any hyperscale data center opportunities.

Speaker #3: We've talked about this before, or we've received this question before, and as we've noted, really our product solution offerings for the data center market are better suited and best suited for the multi-tenant data centers and enterprise data centers.

Neil Wilkin: We've talked about this before, or we've received this question before. As we've noted, that, really, our product solution offerings for the data center market are better suited, and best suited, for the multi-tenant data centers, and enterprise data centers. We believe that there's significant growth opportunities in the multi-tenant data centers market segment, as well as enterprise data centers, but particularly for the MTDCs. That will provide significant opportunities for OCC in fiscal year 2026.

Speaker #3: We believe that there are significant growth opportunities in the multi-tenant data centers market segment, as well as enterprise data centers, but in particular for the MTDCs, and that will provide significant opportunities for OCC in fiscal year 2026.

Caroline Felix: Thanks, Neil.

Speaker #3: Yeah.

Neil Wilkin: Yeah. I'd also add that, and Tracy mentioned this in some of her comments, that the multi-tenant data centers also are positively impacted by the current growth in cloud computing and artificial intelligence. And so we believe that that's a true market opportunity for us.

Speaker #3: I'd also, thanks Neil, add that—and Tracy mentioned this in some of her comments—that the multi-tenant data centers also are positively impacted by the current growth in cloud computing and artificial intelligence.

Speaker #3: And so we believe that that's a true market opportunity for

Speaker #3: us. Thanks.

Caroline Felix: Thanks. The next question is, what do you think the potential sales look like for 2026 and 2027?

Speaker #4: The next question is, what do you think the potential sales look like for 2026 and

Speaker #4: 2027? I'll let Tracy take

Neil Wilkin: I'll let Tracy take the financial questions.

Speaker #3: the financial questions.

Speaker #4: Sure. As we said before, we don't provide forward-looking guidance. However, I will say that we are optimistic about potential increases in sales based on the opportunities that we expect to arise in fiscal 2026, particularly during the second half of fiscal 2026.

Tracy Smith: Sure. As we said before, we don't provide forward-looking guidance. However, I will say that we are optimistic about potential increases in sales based on the opportunities that we expect to arise in fiscal 2026, particularly during the second half of fiscal 2026. Our belief is based on what we're seeing in our targeted market sectors as well as our expected opportunities to expand in those market sectors as a result of the strategic collaboration with Laterra.

Speaker #4: Our belief is based on what we're seeing in our targeted market sectors, as well as our expected opportunities to expand in those market sectors as a result of the strategic collaboration with Laterra.

Speaker #4: Thanks, Tracy. Next question. Can you give a sense of the financial metrics behind the operational leverage? For example, how much EPS can impact different forward sales levels if they do, in fact, inflect higher on the collaboration?

Caroline Felix: Thanks, Tracy. Next question. Can you give a sense of the financial metrics behind the operational leverage? For example, how much EPS can impact different forward sales levels if they do, in fact, inflect higher on the collaboration?

Speaker #5: We can't give you a specific formula. As you all know, operating leverage is a result of fixed costs in manufacturing and also SG&A costs being spread over higher sales.

Tracy Smith: We can't give you a specific formula. As you all know, operating leverage is a result of fixed costs in manufacturing and also in FC&A costs being spread over higher sales. Manufacturing operating leverage is also impacted by product mix sold, which is not a variable that's very easy to predict.

Speaker #5: Manufacturing operating leverage is also impacted by product mix sold, which is not a variable that is very easy to predict.

Speaker #4: Thanks, Tracy. Next question is, Q1 and Q2 are typically the weakest quarters in terms of seasonality. Should we still expect the typical seasonality into—

Caroline Felix: Thanks, Tracy. Next question is, Q1 and Q2 are typically the weakest quarters in terms of seasonality. Should we still expect the typical seasonality into 2026?

Speaker #4: 2026? As Neil mentioned, we

Tracy Smith: As Neil mentioned, we do continue to see a seasonality impact in our Q1 and Q2, although there can be exceptions, particularly if there are larger orders that impact the first half of the year or unanticipated macroeconomic conditions during the year.

Speaker #5: We do continue to see a seasonality impact in our first and second quarters, although there can be exceptions, particularly if there are larger orders that impact the first half of the year or unanticipated macroeconomic conditions during the period.

Speaker #5: year. Got it.

Caroline Felix: Got it. Thanks, Tracy. Next question. Is the focus still on Tier 2 data centers, or is there some potential to capture some of the Tier 1 data center demand as part of your collaboration?

Speaker #4: Thanks, Tracy. Next question. Is the focus still on Tier 2 data centers, or is there some potential to capture some of the Tier 1 data center demand as part of your collaboration?

Speaker #3: Well, without speaking specifically about the strategic collaboration with Laterra, what I'd say is that OCC's products are best suited for Tier 2 or multi-tenant data centers and the enterprise data center market.

Neil Wilkin: Well, without speaking specifically about the strategic collaboration with Laterra, what I'd say is that OCC's products are best suited for Tier 2 or multi-tenant data centers and the enterprise data center market. That's really where our focus is, as we mentioned before. I would not expect that OCC to directly have any significant participation in Tier 1 or hyperscale data centers. Doesn't mean there couldn't be some impact at some level. Of course, those growth in Tier 1 data centers in the market can impact what kind of growth is being seen in Tier 2 for multi-tenant data centers and other parts of the market. But directly, I wouldn't expect us to have a significant participation at all in the Tier 1 or hyperscale data centers.

Speaker #3: And so that's really where our focus is, as we mentioned before. And I would not expect that OCC to directly have any significant participation in Tier 1 or hyperscale data centers.

Speaker #3: Doesn’t mean there couldn’t be some impact. It's at some level and, of course, those growth trends in Tier 1 data centers in the market can impact what kind of growth is being seen in Tier 2 for multi-tenant data centers and other parts of the market.

Speaker #3: But directly, I wouldn’t expect us to have a significant participation at all in the Tier 1 or hyperscale data centers.

Speaker #4: Thanks, Neil. Next question. In terms of capacity available and any capacity constraints, are there any changes versus what you commented on last?

Caroline Felix: Thanks, Neil. Next question. In terms of capacity available and any capacity constraints, are there any changes versus what you commented on last quarter?

Speaker #4: quarter? We continue to evaluate our

Neil Wilkin: We continue to evaluate our capacity, but right now, we believe that OCC has the capacity to capture the growth opportunities that we expect to see in fiscal year 2026. So I think that really answers that question.

Speaker #3: Capacity, but right now we believe that OCC has the capacity to capture the growth opportunities that we expect to see in fiscal year 2026.

Speaker #3: So, I think that really answers that question.

Speaker #4: Thanks, Neil. Next question. OCC has been hiring a lot recently. Can you comment if you have seen any issues finding the right workers?

Caroline Felix: Thanks, Neil. Next question. OCC has been hiring a lot recently. Can you comment if you have seen any issues to find the right workers, why you saw the need to hire that significantly, and if this will increase OpEx significantly?

Speaker #4: Why did you see the need to hire that significantly? And will this increase OpEx?

Speaker #4: significantly? Yes.

Neil Wilkin: Yes. I don't know if I'd characterize our hiring recently as significant. We do have a number of open positions that we are seeking to fill, and that's not unusual for that to be the case. Most of those positions are typically in manufacturing. We are fortunate that OCC has a good record of recruiting and retaining needed talent. But I think, like a lot of businesses generally, not just in our industry, OCC has seen some additional turnover among newly hired personnel. However, OCC has what we believe is a record of unusually low turnover among our longer-term employees. So we do continue to expect to see hires. I don't expect that to significantly increase operating expense specifically. And of course, we are consistently looking at what expenses we're incurring in order to provide the appropriate staffing as well as the appropriate balance of expense relative to our opportunities.

Speaker #3: I don't know if I'd characterize our hiring recently as significant. We do have a number of open positions that we are seeking to fill, and it's not unusual for that to be the case.

Speaker #3: Most of those positions are typically in manufacturing. We are fortunate that OCC has a good record of recruiting and retaining needed talent. But I think, like a lot of businesses generally—not just in our industry—OCC has seen some additional turnover among newly hired personnel.

Speaker #3: However, OCC has what we believe is a record of unusually low turnover among our longer-term employees. So we do continue to expect to see hires.

Speaker #3: I don't expect that to significantly increase operating expense specifically. And, of course, we are consistently looking at what expenses we're incurring in order to provide the appropriate staffing, as well as the appropriate balance of expense relative to our opportunities.

Caroline Felix: Thanks, Neil. Next question is, can you please provide an update on progress of the Laterra collaboration?

Speaker #4: Neil, next question is: Can you please provide an update on the progress of the Laterra?

Speaker #4: collaboration? Sure.

Neil Wilkin: Sure. So OCC and Laterra partnered in various capacities for many, many years. And so it's not surprising, because we've worked well with them in the past, that our new strategic collaboration with Laterra, I believe, is going well. The Laterra team is exceptional, and we think highly of the OCC team as well, obviously. And we believe that this strategic collaboration will create growing opportunities for OCC in fiscal year 2026, and hopefully for, although I can't speak for Laterra, for Laterra also.

Speaker #3: So OCC and Laterra partnered in various capacities for many, many years. And so it's not surprising, because we worked well with them in the past, that our new strategic collaboration with Laterra, I believe, is going well.

Speaker #3: The Laterra team is exceptional, and we think highly of the OCC team as well—obviously. We believe that this strategic collaboration will create growing opportunities for OCC in fiscal year 2026 and, hopefully, for Laterra also—although I can't speak for Laterra.

Speaker #4: Thanks, Neil. Last question this morning: Laterra has recently announced an investment into manufacturing. Is this an indication of strong demand for OCC?

Caroline Felix: Thanks, Neil. Last question this morning is, Laterra has recently announced an investment into manufacturing. Is this an indication of strong demand for OCC?

Speaker #3: Well, we can't—OCC really can't comment on announcements that Laterra has made or what their specific business plans are. So I leave those questions for Laterra rather than—

Neil Wilkin: Well, OCC really can't comment on announcements that Laterra has made or what their specific business plans are. So I'd leave those questions for Laterra rather than OCC.

Speaker #3: OCC. Thanks,

Caroline Felix: Thanks, Neil. We have no other questions that were provided in advance of the call today at this time.

Speaker #4: Neil, we have no other questions that were provided in advance of the call today at this time.

Speaker #4: time. Okay.

Neil Wilkin: Okay. So if those are the questions, I guess, Operator Stephanie, if you could let us know if there's any questions from analysts, we're happy to answer them. And if you could please, Stephanie, give the instructions for the folks to ask those questions, that would be wonderful. Thank you.

Speaker #3: So if those are the questions, I guess, operator Stephanie, if you could let us know if there are any questions for analysts, we're happy to answer them.

Speaker #3: And if you could, please—Stephanie, give the instructions for the folks to ask those questions. That would be wonderful.

Speaker #3: And if you could please—Stephanie, give the instructions for the folks to ask those questions. It would be wonderful. Thank you.

Speaker #1: If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. In the interest of time, we ask that you please limit yourself to one question and one follow-up question.

Operator: Thank you. If you'd like to ask a question, press Star 1 on your keypad. To leave the queue at any time, press Star 2. In the interest of time, we ask you please limit yourself to one question and one follow-up question. Once again, that is Star 1 to ask a question, and we'll pause for just a moment to allow questioners to queue. Again, that is Star 1 to ask a question. We'll take our first question from Anthony Crist with Odyssey Investments.

Speaker #1: Once again, that is star one to ask a question, and we'll pause for just a moment to allow questioners to queue. And again, that is star one to ask a question.

Speaker #1: We'll take our first question from Anthony Crist with Odyssey Investments.

Speaker #5: Thank you very much. Mr. Wilkin, I have tried to call two or three times. I'm located up in Northern Virginia. My question deals with, is there any visibility into whether or not Laterra may refer us some of the SMF cabling, single-mode fiber cabling, or the hollow fiber cabling, which is basically Tier 1 products?

Anthony Crist: Thank you very much. Mr. Wilkin, I have tried to call two or three times. I'm located up in Northern Virginia. My question deals with, is there any visibility into whether or not Laterra may refer us some of the SMF cabling, single-mode fiber cabling, or the Halo fiber cabling, which is basically Tier 1 products? And if you could, I know the words. If you could take a minute and explain what those two products are, I'd appreciate it. And then I have a follow-up.

Anthony Christ: Thank you very much. Mr. Wilkin, I have tried to call two or three times. I'm located up in Northern Virginia. My question deals with, is there any visibility into whether or not Laterra may refer us some of the SMF cabling, single-mode fiber cabling, or the Halo fiber cabling, which is basically Tier 1 products? And if you could, I know the words. If you could take a minute and explain what those two products are, I'd appreciate it. And then I have a follow-up.

Speaker #5: And if you could—I know the words—if you could take a minute and explain what those two products are, I'd appreciate it. And then I have a follow-up.

Speaker #3: Okay. So, hollow core is a type of fiber that's really looking to reduce latency and increase speed in certain applications. And so that is something that probably is usable in a lot of different applications.

Neil Wilkin: Okay. So HaloCore is a type of fiber that's really looking to reduce latency and increase speed in certain applications. And so that is something that probably is usable in a lot of different applications. Our engineering team would be better able to answer that question, but as a general matter, that's the case. I think that I can't comment on what people are thinking about with respect to, or what Laterra is thinking about with respect to how they're going to use that product. But OCC, we've partnered with Laterra in a number of different ways, and Laterra is a large fiber producer of various different products that have been having leading performance in the industry for many, many years.

Speaker #3: Our engineering team would be better able to answer that question, but as a general matter, that's the case. I think that I can't comment on what people are thinking about with respect to, or what Laterra is thinking about with respect to, how they're going to use that product.

Speaker #3: But OCC, we've partnered with Laterra in a number of different ways, and Laterra is a large fiber producer of various different products that have been a leading—having leading performance in the industry for many, many years.

Speaker #3: So again, our products are more focused on the traditional markets that we've had: enterprise, various parts of the enterprise market, as well as a number of specialty markets.

Neil Wilkin: So again, our products are more focused on the traditional markets that we've had, enterprise, various parts of the enterprise market, as well as a number of specialty markets, including harsh environment, military, and others. We use some specialty technologies in some of those products. And then in data centers, we've had a presence in data centers before, but now we're focusing on expanding that and leveraging our current relationships and also focusing on expanding our product offering. I don't know if that really helps specifically on your question. SMF specifically, I think of just as single-mode fiber. So that's a more typical product that would be used in data center, although multi-mode fiber is also used.

So again, our products are more focused on the traditional markets that we've had, enterprise, various parts of the enterprise market, as well as a number of specialty markets, including harsh environment, military, and others. We use some specialty technologies in some of those products. And then in data centers, we've had a presence in data centers before, but now we're focusing on expanding that and leveraging our current relationships and also focusing on expanding our product offering. I don't know if that really helps specifically on your question. SMF specifically, I think of just as single-mode fiber. So that's a more typical product that would be used in data center, although multi-mode fiber is also used.

Speaker #3: Including harsh environment and military and others, we use some specialty technologies and some of those products. And then in data centers, we've had a presence in data centers before, but now we're focusing on expanding that and leveraging our current relationships and also focusing on expanding our product offering.

Speaker #3: I don't know if that really helps specifically on the question. SMF specifically, I think of just a single-mode fiber. So that's a more typical product that would be used in data centers, although multi-mode fiber is also.

Speaker #3: used. Thank

Operator: Thank you. We'll take our next question from Sean Boyd with NickSmart Capital.

Speaker #1: Thank you. And we'll take our next question from Sean Boyd with NetSmart.

Speaker #1: Capital. He said he had a follow-up question,

Neil Wilkin: He said he had a follow-up question, though. Did you want to take that, Stephanie, first?

Speaker #6: Though, did you want to take that, Stephanie, first? Anthony

Caroline Felix: Thank you.

Neil Wilkin: Anthony did.

Anthony did.

Speaker #6: Did—Anthony, would you like to announce your—

Operator: Anthony, would you like to announce your follow-up?

Speaker #1: follow-up?

Speaker #5: Yes.

Anthony Crist: Yes. Yes.

Anthony Christ: Yes. Yes.

Speaker #5: Yes. Your line is

Operator: Your line is open, Anthony.

Speaker #1: open, Anthony.

Speaker #5: Okay. Thank you. Dare I ask, Neil, if those two fibers—the SMFs and the hollow case fibers—would make or be competitive with the Corning fibers?

Anthony Crist: Okay. Thank you. Dare I ask, Neil, if those two fibers, the SMFs and the HaloCore fibers, would make were competitive with the Corning fibers? And if any automation, AI, would be given us by Laterra to produce them?

Anthony Christ: Okay. Thank you. Dare I ask, Neil, if those two fibers, the SMFs and the HaloCore fibers, would make were competitive with the Corning fibers? And if any automation, AI, would be given us by Laterra to produce them?

Speaker #5: And if any automation AI would be given us by Laterra to produce them?

Speaker #3: Yeah, I'm not the best person to answer the question about how those are going to be used, and there's a whole lot of intellectual property and strategy that goes behind which fibers are going into which applications and what plans the fiber manufacturers have.

Neil Wilkin: Yeah. I'm not the best person to answer the question about how those are going to be used. And there's a whole lot of intellectual property and strategy that goes behind which fibers are going into which applications and what plans the fiber manufacturers have. What I can say is that Laterra is known for having leading technology in fiber development, everything from the rollable ribbon fibers to many, many other types of fibers. They've been a leader in many ways and are well respected in that regard. How they plan to deploy those technologies in different markets is not really something that we can comment on. And those are questions that would really be left to Laterra if they choose to answer them, which they may not be because of the proprietary nature of some of that.

Speaker #3: What I can say is that Laterra is known for having leading technology in fiber development—everything from the rollable ribbon fibers to many, many other types of fibers.

Speaker #3: They've been a leader in many ways and are well respected in that regard. How they plan to deploy those technologies in different markets is not really something that we can comment on.

Speaker #3: And those are questions that will really be left to Laterra. If they choose to answer them—which they may not, because of the proprietary nature of some of that.

Speaker #3: But Anthony, the one thing I guess I would add is, if you're asking how they compare to Corning, I would suspect that, as with any other competitors, Laterra would have a very favorable view of their products.

Neil Wilkin: But Anthony, the one thing I guess I would add is if you're asking how they compare to Corning, I would suspect that, as with any other competitors, Laterra would have a very favorable view of their products, and I think the market does too.

But Anthony, the one thing I guess I would add is if you're asking how they compare to Corning, I would suspect that, as with any other competitors, Laterra would have a very favorable view of their products, and I think the market does too.

Speaker #3: And I think the market does too.

Speaker #1: Thank you. Again, that's star one to ask a question, and we'll take our next question from Sean Boyd with NetSmart.

Operator: Thank you. Again, Star 1 to ask a question, and we'll take our next question from Sean Boyd with NickSmart Capital.

Speaker #1: Capital. Good morning.

Sean Boyd: Good morning. Can you hear me okay?

Speaker #7: Can you hear me

Speaker #7: okay? It's a

Neil Wilkin: It's a little low, but I think we'll be able to make out what you're saying.

Speaker #3: Little low, but I think we'll be able to make out what you're saying.

Speaker #7: Okay, let's give it a shot here. So, historically, the company has shown real positive seasonality in its October quarter, its fourth quarter—up double digits sequentially.

Sean Boyd: Okay. Let's give it a shot here. Historically, the company has showed real positive seasonality in its October quarter, its fourth quarter, up double digits sequentially. This year, we didn't quite see that. I thought I might have heard something about delays. The question is, were there any project delays or push-outs that might have caused that?

Speaker #7: This year, we didn't quite see that, so I thought I might have heard something about delays. So the question is, were there any project delays or push-outs that might have caused—

Speaker #7: that? Well, first of

Neil Wilkin: Well, first of all, generally, our seasonality is what we see in the first quarter versus the second quarter. I mean, excuse me, the first half of the year versus the second half of the year. So I don't have the precise percentage in front of me, but the growth that we would have seen from the second quarter to the third quarter would have been, I would expect, in double digits. Sequentially, that wasn't the case from Q3 to Q4, but I would expect Q3 and Q4 to be more equal, again, with most of the seasonality being impacting the first half of the year and seeing positive increases in the second half of the year.

Speaker #3: Generally, our seasonality is what we see in the first quarter versus the second quarter—I mean, excuse me, the first half of the year versus the second half of the year.

Speaker #3: So, I don't have the precise percentage in front of me, but the growth that we would have seen from the second quarter to the third quarter would have been, I would expect, in double digits.

Speaker #3: Sequentially, that wasn’t the case from Q3 to Q4, but I would expect Q3 and Q4 to be more equal. Again, with most of the seasonality impacting the first half of the year and seeing positive increases in the second half of the year.

Speaker #2: And we did see our seasonality this year mirror that from 2024. So for the second half of the year, I think it was 48% in the first half of total sales.

David Brown: And we did see our seasonality this year mirror that from 2024. So for the second half of the year, I think it was 48% in the first half.

Tracy Smith: And we did see our seasonality this year mirror that from 2024. So for the second half of the year, I think it was 48% in the first half.

Neil Wilkin: Of total sales.

Speaker #2: I'm sorry, 46% of total sales were in the first half of the year, and the rest were in the second half of the year. That was exactly the same in 2025 compared to 2024.

David Brown: I'm sorry, 46% of total sales in the first half of the year, and the rest in the second half of the year. That was exactly the same in 2025 compared to 2024.

Tracy Smith: I'm sorry, 46% of total sales in the first half of the year, and the rest in the second half of the year. That was exactly the same in 2025 compared to 2024.

Speaker #3: And we'll be filing our annual report in Form 10-K today. We expect to, in the footnotes, disclose details about some of the seasonality.

Neil Wilkin: We'll be filing our annual report in Form 10-K today. We expect to, and in the footnotes, we disclose details about some of the seasonality.

Speaker #2: And the MD&A.

David Brown: The MD&A.

Tracy Smith: The MD&A.

Speaker #3: Mm-hmm. The other question that you had was, part of the same question you had, was did we see any products that had been delayed impacting the fourth quarter?

Neil Wilkin: The other part of the same question you had was, did we see any products that had been delayed impacting the fourth quarter? I don't think that that was significant. And again, I don't think that those delays are significant overall. I think there, and one of the things that OCC benefits from is we're in many, many different markets geographically in particular market segments. And so sometimes we'll see big fluctuations in certain market sectors that are not truly visible because they're offset by other fluctuations in other market segments that we're targeting.

Speaker #3: I don't think that that was significant. And again, I don't think that the delays are significant overall. I think they're—and one of the things that OCC benefits from is we're in many, many different markets: geographically, in particular market segments.

Speaker #3: And so sometimes we'll see big fluctuations in certain market sectors that are not truly visible because they're offset by other fluctuations in other market segments that we're

Speaker #3: Targeting. Let me just correct the—

David Brown: Let me just correct the seasonality percentage that I stated earlier. It was 46% in the first half of the year and 54% in the second half of the year. That was the same seasonality pattern that we saw in 2024 and 2025.

Tracy Smith: Let me just correct the seasonality percentage that I stated earlier. It was 46% in the first half of the year and 54% in the second half of the year. That was the same seasonality pattern that we saw in 2024 and 2025.

Speaker #2: The seasonality percentage that I stated earlier was 46% in the first half of the year and 54% in the second half of the year.

Speaker #2: And that was the same seasonality pattern that we saw in 2024 and 2025.

Speaker #7: Okay. So, the 46, 54—is that the year we just finished, FY25?

Sean Boyd: Okay. So the 46.54 is the year we just finished, FY25?

Speaker #2: Yes, as well as 2024. They were exactly the same.

David Brown: Yes, as well as 2024. They were exactly the same.

Tracy Smith: Yes, as well as 2024. They were exactly the same.

Speaker #7: Got it. Okay. That color is helpful. Appreciate that. So just as a follow-up, the collaboration with Laterra, which we inked back in July—you indicate that we should start to see that impact the top line in 2026.

Sean Boyd: Got it. Okay. That color is helpful. Appreciate that. So just as a follow-up, the collaboration with Laterra, which we inked back in July, you indicate that we should start to see that impact the top line in 2026. Can you give us any more color on that? Can we see that in the first half? Would it be the second half? And just as a follow-on, why is that taking this long? What are the gating factors before we see the revenue contribution of that?

Speaker #7: Can you give us any more color on that? Can we see that in the first half? Would it be the second half? And just as a follow-on, why is that taking this long?

Speaker #7: What is it that—what are the gating factors before we see the revenue contribution of

Speaker #7: that? Yeah.

Speaker #3: I mean, it's a good question. It also has a lot of details behind it. So, specifically, what we're going to see in 2026—we don't provide forecasts on what we're going to see.

Neil Wilkin: Yeah. I mean, it's a good question. It also has a lot of details behind it. So specifically, what we're going to see in 2026, we don't provide forecasts on what we're going to see. We do think we're going to see a positive impact, and we've stated that. With respect to the collaboration, as you'd imagine, when you're working with companies in a different way, that there is a lot of work that goes into that. I think that the work is going well and expeditiously, and that there's a lot of work that's being done. You'd expect that that would be the case before it started to impact sales, but I can't, beyond that, comment on what it is. I think that what I'd also I don't have the quite percentage. If you'll just hold on for a second.

Speaker #3: We do think we're going to see a positive impact, and we've stated that. With respect to the collaboration, as you'd imagine, when you're working with companies in a different way, there is a lot of work that goes into that.

Speaker #3: I think that the work is going well and expeditiously, and that there's a lot of work that's being done. You'd expect that that would be the case before it started to impact sales.

Speaker #3: But I can't be on that comment on what it is. I think that what I'd also— I don't have the quite percentage, if you'll just hold on for a second.

Speaker #3: So there I was, just confirming—you talked about the double-digit increase because of seasonality. If you look at what our performance was in the second quarter of 2025 versus the third quarter of 2025, that does create—that you do see—a double-digit increase in sales, which is consistent with the observation that you had made.

Neil Wilkin: So, I was just confirming you talked about the double-digit increase because of seasonality. If you look at what our performance was in the second quarter of 2025 versus the third quarter of 2025, that does create that you do see a double-digit increase in sales, which is consistent with the observation that you had made. But you wouldn't necessarily expect to see that between the third and fourth quarter because the seasonality between the first half and the second half, as we described, is fairly consistent.

So, I was just confirming you talked about the double-digit increase because of seasonality. If you look at what our performance was in the second quarter of 2025 versus the third quarter of 2025, that does create that you do see a double-digit increase in sales, which is consistent with the observation that you had made. But you wouldn't necessarily expect to see that between the third and fourth quarter because the seasonality between the first half and the second half, as we described, is fairly consistent.

Speaker #3: But you wouldn't necessarily expect to see that between the third and fourth quarter, because the seasonality between the first half and the second half, as we described, is fairly—

Speaker #3: consistent. Thank you.

Operator: Thank you. There are no additional questions at this time. I'd like to now turn it back to our presenters for any additional closing remarks.

Speaker #8: There are no additional questions at this time. I'd like to now turn it back to our presenters for any additional or closing remarks.

Speaker #3: Thank you, Stephanie. Appreciate everyone's questions. I would like to thank everyone for listening to our fourth quarter and fiscal year 2025 conference call today. As always, we appreciate your time and your investment in Optical Cable Corporation.

Neil Wilkin: Thank you, Stephanie. Appreciate everyone's questions. We'd like to thank everyone for listening to our fourth quarter and fiscal year 2025 conference call today. As always, we appreciate your time and your investment in Optical Cable Corporation. We hope that you and your families have a wonderful holiday and a happy New Year. Thank you.

Speaker #3: We hope that you and your families have a wonderful holiday, and a Happy New Year. Thank you.

Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Q4 2025 Optical Cable Corp Earnings Call

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