Q3 2026 Optical Cable Corp Earnings Call

September 9, 2026

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Speaker #1: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero, and a member of our team will be happy to help you.

Operator: Please stand by. Your meeting is about to begin. Good morning, everyone. My name is Beau, and I will be your conference operator today. At this time, I would like to welcome you to Optical Cable Corporation's third quarter of fiscal year 2026 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 over the phone at that time, please press star one on your telephone. If you would like to remove yourself from the queue, please press star two. With that, Ms. Felix, you may begin your conference.

Speaker #2: Please stand by. Your meeting is about to begin.

Speaker #3: Good morning, everyone. My name is Beau, and I will be your conference operator today. At this time, I would like to welcome you to Optical Cable Corporation's third quarter of fiscal year 2026 earnings conference call.

Speaker #3: 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 over the phone at that time, please press star one on your telephone.

Speaker #3: If you would like to remove yourself from the queue, please press star two. With that, Ms. Felix may begin your conference.

Speaker #4: Good morning, and thank you for joining us for Optical Cable Corporation's third quarter of fiscal year 2026 conference call. By this time, everyone should have a copy of the earnings press release issued earlier today.

Ms. Felix: Good morning, and thank you for joining us for Optical Cable Corporation's Q3 of fiscal year 2026 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, Executive 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.

[Company Representative] (Optical Cable): Good morning, and thank you for joining us for Optical Cable Corporation's Q3 of fiscal year 2026 conference call.

[Company Representative] (Optical Cable): 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, Executive Vice President and Chief Financial Officer.

Speaker #4: 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, Executive Vice President and Chief Financial Officer.

Speaker #4: 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.

[Company Representative] (Optical Cable): 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 #4: 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.

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

[Company Representative] (Optical Cable): With that, I'll turn the call over to Neil Wilkin. Neil, please begin.

Speaker #4: Neil, please begin.

Speaker #5: Thank you, Caroline. 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, 2026, in some additional detail.

Neil D. Wilkin: Thank you, Caroline, and good morning, everyone. I will begin the call today with a few opening remarks. Tracy will then review the Q3 results for the 3-month and 9-month periods ended 31 July 2026 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 live 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. I will say that today we got more questions than we typically would get on a quarter from individual investors.

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 Q3 results for the 3-month and 9-month periods ended 31 July 2026 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 live 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. I will say that today we got more questions than we typically would get on a quarter from individual investors.

Speaker #5: 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 take live questions from analysts and institutional investors during the Q&A session.

Speaker #5: 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 #5: I will say that today we got more questions than we typically would get. On a quarter from individual investors, we'll answer as many of those as we can, and then when we get to the Q&A for institutional investors, please limit your questions to things that were not addressed by the questions from the individual shareholders and will be limiting the questions we'll take from institutional investors to one question per person.

Neil D. Wilkin: We'll answer as many of those as we can. Then when we get to the Q&A for institutional investors, please limit your questions to things that were not addressed by the questions from the individual shareholders, and we'll be limiting the questions we'll take from institutional investors to one question per person. With that, we'll begin. Following a solid start to the year, we continued to build on OCC's strong growth and momentum during the Q3 of fiscal year 2026, delivering year-over-year increases of net sales, gross profit, and net income. Net sales increased 22% to $24.3 million, and gross profit increased 43.9% to $9.1 million during the Q3. Our net sales increase was largely driven by strong demand in OCC's enterprise, data center, and specialty markets.

Neil Wilkin: We'll answer as many of those as we can. Then when we get to the Q&A for institutional investors, please limit your questions to things that were not addressed by the questions from the individual shareholders, and we'll be limiting the questions we'll take from institutional investors to one question per person. With that, we'll begin. Following a solid start to the year, we continued to build on OCC's strong growth and momentum during the Q3 of fiscal year 2026, delivering year-over-year increases of net sales, gross profit, and net income. Net sales increased 22% to $24.3 million, and gross profit increased 43.9% to $9.1 million during the Q3. Our net sales increase was largely driven by strong demand in OCC's enterprise, data center, and specialty markets.

Speaker #5: With that, we'll begin. Following a solid start to the year, we continued to build on OCC's strong growth and momentum during the third quarter of fiscal year '20, '26.

Speaker #5: Delivering year-over-year increases of net sales, gross profit, and net income. Net sales increased 22% to $24.3 million, and gross profit increased 43.9% to $9.1 million during the third quarter.

Speaker #5: Our net sales increase was largely driven by strong demand in OCC's enterprise, data center, and specialty markets. Our strong gross profit results during the third quarter and also fiscal year-to-date continue to demonstrate the benefit of OCC's manufacturing operating leverage.

Neil D. Wilkin: Our strong gross profit results during Q3, and also fiscal year to date, continue to demonstrate the benefit of OCC's manufacturing operating leverage. As our production volumes increase, our fixed manufacturing costs are spread over higher sales volumes, and manufacturing efficiencies also tend to increase. As of the end of Q3, our sales order backlog and forward load stood at $13.5 million. We are now in the last quarter of our fiscal year, and we are confident in OCC's ability to build on our momentum and capitalize on the opportunities ahead. At the same time, we continue to explore opportunities to further strengthen OCC's capabilities and support long-term growth. As always, we remain focused on delivering exceptional service to our customers and end users and driving sustainable value creation for our shareholders.

Neil Wilkin: Our strong gross profit results during Q3, and also fiscal year to date, continue to demonstrate the benefit of OCC's manufacturing operating leverage. As our production volumes increase, our fixed manufacturing costs are spread over higher sales volumes, and manufacturing efficiencies also tend to increase. As of the end of Q3, our sales order backlog and forward load stood at $13.5 million. We are now in the last quarter of our fiscal year, and we are confident in OCC's ability to build on our momentum and capitalize on the opportunities ahead. At the same time, we continue to explore opportunities to further strengthen OCC's capabilities and support long-term growth. As always, we remain focused on delivering exceptional service to our customers and end users and driving sustainable value creation for our shareholders.

Speaker #5: As our production volume volumes increase, our fixed manufacturing costs are spread over higher sales volumes and manufacturing efficiencies also tend to increase. As of the end of the third quarter, our sales order backlog and forward loads stood at 13.5 million dollars.

Speaker #5: We are now in the last quarter of our fiscal year, and we are confident in OCC's ability to build on our momentum and capitalize on the opportunities ahead.

Speaker #5: At the same time, we continue to explore opportunities to further strengthen OCC's capabilities in support long-term growth. As always, we remain focused on delivering exceptional service to our customers and end users and driving sustainable value creation for our shareholders.

Speaker #5: And with that, I'll turn the call over to Tracy who will review an additional detail on third quarter of fiscal year 2026 financial results.

Neil D. Wilkin: I'll turn the call over to Tracy, who will review in additional detail our Q3 of fiscal year 2026 financial results.

Neil Wilkin: I'll turn the call over to Tracy, who will review in additional detail our Q3 of fiscal year 2026 financial results.

Speaker #6: Thank you, Neil. Consolidated net sales for the third quarter of fiscal 2026 increased 22% to $24.3 million compared to $19.9 million for the same period last year.

Tracy G. Smith: Thank you, Neil. Consolidated net sales for Q3 of fiscal 2026 increased 22% to $24.3 million, compared to $19.9 million for the same period last year. Consolidated net sales for the first nine months of fiscal 2026 were $62.9 million, an increase of 18.3% compared to net sales of $53.2 million for the same period last year. During Q3 and first nine months of fiscal 2026, we experienced an increase in net sales in our enterprise, data center, and specialty markets compared to the same periods last year, as we continued to see general market growth opportunities in our industry, both domestically and internationally, with strength specifically in our enterprise, data center, and specialty markets.

Tracy Smith: Thank you, Neil. Consolidated net sales for Q3 of fiscal 2026 increased 22% to $24.3 million, compared to $19.9 million for the same period last year. Consolidated net sales for the first nine months of fiscal 2026 were $62.9 million, an increase of 18.3% compared to net sales of $53.2 million for the same period last year. During Q3 and first nine months of fiscal 2026, we experienced an increase in net sales in our enterprise, data center, and specialty markets compared to the same periods last year, as we continued to see general market growth opportunities in our industry, both domestically and internationally, with strength specifically in our enterprise, data center, and specialty markets.

Speaker #6: Consolidated net sales for the first nine months of fiscal 2026 were $62.9 million and increase of $18.3% compared to net sales of $53.2 million for the same period last year.

Speaker #6: During the third quarter and first nine months of fiscal 2026, we experienced an increase in net sales in our enterprise, data center, and specialty markets compared to the same periods last year.

Speaker #6: As we continue to see general market growth opportunities in our industry, both domestically and internationally, with strength specifically in our enterprise, data center, and specialty markets.

Speaker #6: As Neil mentioned, our sales order backlog and forward load increased to $13.5 million at the end of the third quarter of fiscal 2026, as compared to $13.3 million as of April 30, 2026, $10.4 million as of January 31, 2026, and $7.3 million as of October 31, 2025.

Tracy G. Smith: As Neil mentioned, our sales order backlog and forward load increased to $13.5 million at the end of Q3 of fiscal 2026, as compared to $13.3 million as of 30 April 2026, $10.4 million as of 31 January 2026, and $7.3 million as of 31 October 2025. Turning to gross profit. Our gross profit increased 43.9% to $9.1 million in Q3 of fiscal 2026, compared to $6.3 million in Q3 of fiscal 2025. Gross profit margin, our gross profit as a percentage of net sales, increased to 37.4% in Q3 of fiscal 2026, compared to 31.7% in Q3 of the prior year. Gross profit increased 35.5% to $22.1 million in the first nine months of fiscal 2026, compared to $16.3 million in the first nine months of fiscal 2025.

Tracy Smith: As Neil mentioned, our sales order backlog and forward load increased to $13.5 million at the end of Q3 of fiscal 2026, as compared to $13.3 million as of 30 April 2026, $10.4 million as of 31 January 2026, and $7.3 million as of 31 October 2025. Turning to gross profit. Our gross profit increased 43.9% to $9.1 million in Q3 of fiscal 2026, compared to $6.3 million in Q3 of fiscal 2025. Gross profit margin, our gross profit as a percentage of net sales, increased to 37.4% in Q3 of fiscal 2026, compared to 31.7% in Q3 of the prior year. Gross profit increased 35.5% to $22.1 million in the first nine months of fiscal 2026, compared to $16.3 million in the first nine months of fiscal 2025.

Speaker #6: Turning to gross profit, our gross profit increased 43.9% to $9.1 million in the third quarter of fiscal 2026 compared to $6.3 million in the third quarter of fiscal 2025.

Speaker #6: Gross profit margin, our gross profit is a percentage of net sales increased to 37.4% in the third quarter of fiscal 2026 compared to 31.7% in the third quarter of the prior year.

Speaker #6: Gross profit increased 35.5% to $22.1 million in the first nine months of fiscal 2026 compared to 16.3 million dollars in the first nine months of fiscal 2025.

Speaker #6: Gross profit margin increased to 35% in the first nine months of fiscal 2026 compared to 30.6% for the same period last year. Gross profit margin for the third quarter and first nine months of fiscal 2026 was positively impacted by higher volumes and the resulting positive impact of our strong operating leverage.

Tracy G. Smith: Gross profit margin increased to 35% in the first nine months of fiscal 2026, compared to 30.6% for the same period last year. Gross profit margin for Q3 and the first nine months of fiscal 2026 was positively impacted by higher volumes and the resulting positive impact of our strong operating leverage. 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. SG&A expenses increased to $7 million in Q3 of fiscal year 2026, compared to $5.7 million for the same period last year. SG&A expenses as a percentage of net sales were 28.7% in Q3 of fiscal 2026, compared to 28.8% in Q3 of fiscal 2025.

Tracy Smith: Gross profit margin increased to 35% in the first nine months of fiscal 2026, compared to 30.6% for the same period last year. Gross profit margin for Q3 and the first nine months of fiscal 2026 was positively impacted by higher volumes and the resulting positive impact of our strong operating leverage. 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. SG&A expenses increased to $7 million in Q3 of fiscal year 2026, compared to $5.7 million for the same period last year. SG&A expenses as a percentage of net sales were 28.7% in Q3 of fiscal 2026, compared to 28.8% in Q3 of fiscal 2025.

Speaker #6: 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.

Speaker #6: SG&A expenses increased to $7 million in the third quarter of fiscal year 2026 compared to $5.7 million for the same period last year. SG&A expenses is a percentage of net sales were 28.7% in the third quarter of fiscal 2026 compared to 28.8% in the third quarter of fiscal 2025.

Speaker #6: SG&A expenses increased to 18.8 million dollars in the first nine months of fiscal year 2026 compared to 16.9 million dollars for the same period last year.

Tracy G. Smith: SG&A expenses increased to $18.8 million in the first nine months of fiscal year 2026, compared to $16.9 million for the same period last year. SG&A expenses as a percentage of net sales were 29.9% in the first nine months of fiscal 2026, compared to 31.8% in the first nine months of fiscal 2025. The increase in SG&A expenses during Q3 and the first nine months of fiscal 2026 compared to the same periods last year was primarily the result of increases in employee costs, contracted sales personnel related costs, and shipping costs. Included in employee costs and contracted sales personnel related costs are compensation costs and sales incentives.

Tracy Smith: SG&A expenses increased to $18.8 million in the first nine months of fiscal year 2026, compared to $16.9 million for the same period last year. SG&A expenses as a percentage of net sales were 29.9% in the first nine months of fiscal 2026, compared to 31.8% in the first nine months of fiscal 2025. The increase in SG&A expenses during Q3 and the first nine months of fiscal 2026 compared to the same periods last year was primarily the result of increases in employee costs, contracted sales personnel related costs, and shipping costs. Included in employee costs and contracted sales personnel related costs are compensation costs and sales incentives.

Speaker #6: SG&A expenses as a percentage of net sales were 29.9% in the first nine months of fiscal 2026, compared to 31.8% in the first nine months of fiscal 2025.

Speaker #6: The increase in SG&A expenses during the third quarter and first nine months of fiscal 2026 compared to the same periods last year was primarily the result of increases in employee costs, contracted sales personnel-related costs, and shipping costs.

Speaker #6: Included in employee costs and contracted sales personnel-related costs are compensation costs and sales incentives. OCC recorded net income of $1.9 million or $21 cents per basic and diluted share for the third quarter of fiscal 2026 compared to net income of $302,000 or $0.04 per basic and diluted share for the third quarter of fiscal 2025.

Tracy G. Smith: OCC recorded net income of $1.9 million, or $0.21 per basic and diluted share for Q3 of fiscal 2026, compared to net income of $302,000, or $0.04 per basic and diluted share for Q3 of fiscal 2025. OCC recorded net income of $2.5 million, or $0.28 per basic and diluted share for the first nine months of fiscal 2026, compared to a net loss of $1.5 million or $0.19 per basic and diluted share for the first nine months of fiscal 2025. With that, I'll turn the call back over to you, Neil.

Tracy Smith: OCC recorded net income of $1.9 million, or $0.21 per basic and diluted share for Q3 of fiscal 2026, compared to net income of $302,000, or $0.04 per basic and diluted share for Q3 of fiscal 2025. OCC recorded net income of $2.5 million, or $0.28 per basic and diluted share for the first nine months of fiscal 2026, compared to a net loss of $1.5 million or $0.19 per basic and diluted share for the first nine months of fiscal 2025. With that, I'll turn the call back over to you, Neil.

Speaker #6: OCC recorded net income of $2.5 million or $28 cents per basic and diluted share for the first nine months of fiscal 2026 compared to a net loss of $1.5 million or $0.19 per basic and diluted share for the first nine months of fiscal 2025.

Speaker #6: With that, I'll turn the call back over to you, Neil.

Speaker #5: Thank you, Tracy. As I previously mentioned, we received a large number of questions in advance of today's call, some of which came in just before the call.

Neil D. Wilkin: Thank you, Tracy. As I previously mentioned, we received a large number of questions in advance of today's call, some of which came in just before the call. We believe that some of these questions that have been submitted will be of interest to most participants. So we're going to go through those questions first, and then we will address any remaining questions live from analysts or institutional investors. As we've stated before, we'd like to take one question from each institutional investor, because I think we're going to be covering a lot of the questions you may have through the previously submitted questions. Caroline, if you'd please begin by reading the questions we've received that we were provided in advance of the call, and we'll proceed to respond.

Neil Wilkin: Thank you, Tracy. As I previously mentioned, we received a large number of questions in advance of today's call, some of which came in just before the call. We believe that some of these questions that have been submitted will be of interest to most participants. So we're going to go through those questions first, and then we will address any remaining questions live from analysts or institutional investors. As we've stated before, we'd like to take one question from each institutional investor, because I think we're going to be covering a lot of the questions you may have through the previously submitted questions. Caroline, if you'd please begin by reading the questions we've received that we were provided in advance of the call, and we'll proceed to respond.

Speaker #5: We believe that some of these questions that have been submitted will be of interest to most participants. So we're going to go through those questions first, and then we'll address any remaining questions live from analysts or institutional investors.

Speaker #5: As we've stated before, we'd like to take one question from each institutional investor because I think we're going to be covering a lot of the questions you may have through the previously submitted questions.

Speaker #5: Caroline, if you'd please received that we were provided in advance of the call, and we'll proceed to respond.

Speaker #4: Thanks, Neil. The first question is, can you please go into more detail about how backlog and quarterly revenue have been changing in this new demand cycle and how it is different from prior instances where backlog has bumped to above 10 million?

Ms. Felix: Thanks, Neil. The first question is, "Can you please go into more detail about how backlog and quarterly revenue have been changing in this new demand cycle, and how it is different from prior instances where backlog has bumped to above $10 million? You had said in prior calls that you expected the H2 of 2026 to be very strong. Is this reflected in current and future expected backlog? Is that assumption still valid, or is the H2 of 2026 looking different at all, positive or negative? How long do you expect this higher backlog to sustain?

[Company Representative] (Optical Cable): Thanks, Neil. The first question is, "Can you please go into more detail about how backlog and quarterly revenue have been changing in this new demand cycle, and how it is different from prior instances where backlog has bumped to above $10 million? You had said in prior calls that you expected the H2 of 2026 to be very strong. Is this reflected in current and future expected backlog? Is that assumption still valid, or is the H2 of 2026 looking different at all, positive or negative? How long do you expect this higher backlog to sustain?

Speaker #4: You had said in prior calls that you expected the second half of 2026 to be very strong. Is this reflected in current and future expected backlog?

Speaker #4: Is that assumption still valid, or is the second half of 2026 looking different at all, positive or negative, how long do you expect this higher backlog to sustain?

Speaker #5: So there's a lot of questions in that first statement. As you can see from our press release earlier this morning, our results during the third quarter of fiscal year 2026 support our previous expectation that the second half of 2026 would be very strong.

Neil D. Wilkin: So there's a lot of questions in that first statement. As you can see from our press release earlier this morning, our results during the Q3 of fiscal year 2026 support our previous expectation that the H2 of 2026 would be very strong. We continue to believe that that's going to be the case. We continue to have a robust backlog and forward load that are increasing. At the same time, sales are increasing. We can't specifically comment on how long we expect our higher backlog to continue. However, as we've seen in the past, the backlog, when it increases to a certain level, certainly is indicative of what we believe we're going to see in the following quarter or so. But a lower backlog doesn't necessarily mean that that's going to generate a lower sales number, and we've talked about that previously.

Neil Wilkin: So there's a lot of questions in that first statement. As you can see from our press release earlier this morning, our results during the Q3 of fiscal year 2026 support our previous expectation that the H2 of 2026 would be very strong. We continue to believe that that's going to be the case. We continue to have a robust backlog and forward load that are increasing. At the same time, sales are increasing. We can't specifically comment on how long we expect our higher backlog to continue. However, as we've seen in the past, the backlog, when it increases to a certain level, certainly is indicative of what we believe we're going to see in the following quarter or so. But a lower backlog doesn't necessarily mean that that's going to generate a lower sales number, and we've talked about that previously.

Speaker #5: We continue to believe that that's going to be the case. We continue to have a robust backlog and forward load that our increasing at the same time sales are increasing.

Speaker #5: We can't specifically comment on how long we expect our higher backlog to continue, however, as we've seen in the past, the backlog, when it increases to a certain level, certainly is indicative of what we believe we're going to see in the following quarter or so.

Speaker #5: But a lower backlog doesn't necessarily mean that that's going to generate a lower sales number, and we've talked about that previously. It's not a data point we've always described, but we've only been disclosing it to folks through our press releases and 10-Qs when we believe that that number has some significant value.

Neil D. Wilkin: It's not a data point we've always described. We've only been disclosing it to folks through our press releases and 10-Qs when we believe that that number has some significant value. I think I can also say that even though we don't know what the backlog will do, we still do believe that the industry in general is seeing high levels of demand, and there does not appear to be any indication that demand is weakening, at least as far as we can see at the moment. This does not necessarily mean that we will not see any seasonality. Our Q1 has many holidays in it, including Thanksgiving, Christmas, other December holidays, as well as New Year's. So, at this point, we're not really sure what we'll see in the Q1, but we are seeing a significant amount of demand across the board in all of our markets.

Neil Wilkin: It's not a data point we've always described. We've only been disclosing it to folks through our press releases and 10-Qs when we believe that that number has some significant value. I think I can also say that even though we don't know what the backlog will do, we still do believe that the industry in general is seeing high levels of demand, and there does not appear to be any indication that demand is weakening, at least as far as we can see at the moment. This does not necessarily mean that we will not see any seasonality. Our Q1 has many holidays in it, including Thanksgiving, Christmas, other December holidays, as well as New Year's. So, at this point, we're not really sure what we'll see in the Q1, but we are seeing a significant amount of demand across the board in all of our markets.

Speaker #5: I think I can also say that even though we don't know what the backlog will do, we still do believe that the industry in general is seeing high levels of demand.

Speaker #5: And there does not appear to be any indication that demand is weakening at least as far as we can see at the moment. This does not necessarily mean that we will not see any seasonality.

Speaker #5: Our first quarter has many holidays in it, including Thanksgiving, Christmas, other December holidays, as well as New Year's. So at this point, we're not really sure what we'll see in the first quarter, but we are seeing significant amount of demand across the board in all of our markets.

Speaker #4: Thanks, Neil. Next question: Can you touch on the performance of OCC's traditional markets, including defense?

Ms. Felix: Thanks, Neil. Next question is, "Can you touch on performance of OCC traditional markets, including defense?

[Company Representative] (Optical Cable): Thanks, Neil. Next question is, "Can you touch on performance of OCC traditional markets, including defense?

Speaker #5: Yes. I mean, as we noted in our press release this morning, our enterprise data center and specialty market sectors are all increasing during this quarter.

Neil D. Wilkin: Yes. As we noted in our press release this morning, our enterprise data center and specialty market sectors are all increasing during this quarter and during our year-to-date periods through Q3 2026. Our specialty markets include market sectors such as the military market sector.

Neil Wilkin: Yes. As we noted in our press release this morning, our enterprise data center and specialty market sectors are all increasing during this quarter and during our year-to-date periods through Q3 2026. Our specialty markets include market sectors such as the military market sector.

Speaker #5: And during our year-to-date periods for through the third quarter of 2026, our specialty markets include markets, sectors such as the military market sector.

Speaker #4: Thanks, Neil. Next question. Can you comment on OCC's working capital position and if you feel you have enough working capital to sustain the planned growth?

Ms. Felix: Thanks, Neil. Next question. Can you comment on OCC's working capital position and if you feel you have enough working capital to sustain the planned growth?

[Company Representative] (Optical Cable): Thanks, Neil. Next question. Can you comment on OCC's working capital position and if you feel you have enough working capital to sustain the planned growth?

Speaker #5: Tracy, you'll take this one.

Neil D. Wilkin: Tracy will take this one.

Neil Wilkin: Tracy will take this one.

Speaker #3: Yes, sure. Our working capital is strong at $19.2 million at the end of the third quarter and improved compared to $13.9 million at the end of fiscal year 2025.

Tracy G. Smith: Yes, sure. Our working capital is strong at $19.2 million at the end of Q3 and improved compared to $13.9 million at the end of fiscal year 2025. We do believe that our working capital and credit revolver are sufficient to support and sustain our working capital needs.

Tracy Smith: Yes, sure. Our working capital is strong at $19.2 million at the end of Q3 and improved compared to $13.9 million at the end of fiscal year 2025. We do believe that our working capital and credit revolver are sufficient to support and sustain our working capital needs.

Speaker #3: We do believe that our working capital and credit revolver are sufficient to support and sustain our working capital needs.

Speaker #4: Thanks, Tracy. The next question is, can you provide some color on the growth rates for new versus existing customers?

Ms. Felix: Thanks, Tracy. The next question is, "Can you provide some color on the growth rates for new versus existing customers?

[Company Representative] (Optical Cable): Thanks, Tracy. The next question is, "Can you provide some color on the growth rates for new versus existing customers?

Speaker #3: I'll take that one as well. As we have noted previously, most of our sales are made through distributor channels, so we do not always have a clear picture of the customer purchasing our products through distribution or the end users of our products.

Tracy G. Smith: I will take that one as well. As we have noted previously, most of our sales are made through distributor channels, so we do not always have a clear picture of the customer purchasing our products through distribution or the end users of our products. However, we believe that our growth is being driven by both our existing customers and new customers and end users.

Tracy Smith: I will take that one as well. As we have noted previously, most of our sales are made through distributor channels, so we do not always have a clear picture of the customer purchasing our products through distribution or the end users of our products. However, we believe that our growth is being driven by both our existing customers and new customers and end users.

Speaker #3: However, we believe that our growth is being driven by both our existing customers and new customers and end users.

Speaker #4: Thanks, Tracy. Next question. On the last earnings call, Neil, you had said that the sales cycle is longer for data center. Could you elaborate on that?

Ms. Felix: Thanks, Tracy. Next question. On the last earnings call, Neil, you had said that the sales cycle is longer for data center. Could you elaborate on that? Is the pre-backlog sales process/pipeline longer because of customer qualifications?

[Company Representative] (Optical Cable): Thanks, Tracy. Next question. On the last earnings call, Neil, you had said that the sales cycle is longer for data center. Could you elaborate on that? Is the pre-backlog sales process/pipeline longer because of customer qualifications?

Speaker #4: Is the pre-backlog sales process or pipeline longer because of customer qualification?

Speaker #5: So yeah, I'll take that one. Yes, the sales cycle for certain portions of the data center market sector do tend to be longer that can include qualification requirements as a new supplier for certain new products being supplied.

Neil D. Wilkin: Yes, I will take that one. Yes, the sales cycle for certain portions of the data center market sector do tend to be longer. That can include qualification requirements as a new supplier for certain new products being supplied. However, as we are going through those qualification processes where they exist or indications or periods where the sales cycle is longer, those hopefully potential sales do not show up in our backlog. Our forward load and backlog is really items where we have either received an order, where we received an order, and where we expect that that order is non-cancelable and that we will be delivering it at some point in the future. Sometimes that is a short time period, sometimes that is a longer time period, because we do have some customers that stage the deliveries over time.

Neil Wilkin: Yes, I will take that one. Yes, the sales cycle for certain portions of the data center market sector do tend to be longer. That can include qualification requirements as a new supplier for certain new products being supplied. However, as we are going through those qualification processes where they exist or indications or periods where the sales cycle is longer, those hopefully potential sales do not show up in our backlog. Our forward load and backlog is really items where we have either received an order, where we received an order, and where we expect that that order is non-cancelable and that we will be delivering it at some point in the future. Sometimes that is a short time period, sometimes that is a longer time period, because we do have some customers that stage the deliveries over time.

Speaker #5: However, as we're going through those qualification processes where they exist or indications or periods where the sales cycle is longer, that those hopefully potential sales do not show up in our backlog.

Speaker #5: Our for load and backlog is really items where we've either received an order, where we received an order, and where we expect that that order is non-cancellable and that we will be delivering it at some point in the future.

Speaker #5: Sometimes that's a short time period. Sometimes that's a longer time period because we do have some customers that stage the deliveries over time.

Speaker #4: Thanks, Neil. Next question. Does the flattish backlog versus the last quarter reflect a potential normalization in demand? Should we expect backlog to normalize further in Q4 given that Q1 is the softest quarter in terms of seasonality?

Ms. Felix: Thanks, Neil. Next question. Does the flattish backlog versus the last quarter reflect a potential normalization in demand? Should we expect backlog to normalize further in Q4 given that Q1 is the softest quarter in terms of seasonality?

[Company Representative] (Optical Cable): Thanks, Neil. Next question. Does the flattish backlog versus the last quarter reflect a potential normalization in demand? Should we expect backlog to normalize further in Q4 given that Q1 is the softest quarter in terms of seasonality?

Speaker #5: I don't think that this the backlog increasing a slight amount indicates that the demand has flattening in any way. We continue to see significant growth opportunities and we have seen our backlog and sales for load continue to grow this past month.

Neil D. Wilkin: I don't think that the backlog increasing a slight amount indicates that demand is flattening in any way. We continue to see significant growth opportunities, and we have seen our backlog and sales forward load continue to grow this past month. This does not mean we may not experience some typical seasonality, as I mentioned before, in the first quarter. But for now, we continue to see continued strength and demand for our products, even if it's not reflected in a small change in the backlog forward load as of the end of the quarter.

Neil Wilkin: I don't think that the backlog increasing a slight amount indicates that demand is flattening in any way. We continue to see significant growth opportunities, and we have seen our backlog and sales forward load continue to grow this past month. This does not mean we may not experience some typical seasonality, as I mentioned before, in the first quarter. But for now, we continue to see continued strength and demand for our products, even if it's not reflected in a small change in the backlog forward load as of the end of the quarter.

Speaker #5: This does not mean we may not experience some typical seasonality, as I mentioned before, in the first quarter. But for now, we continue to see strong demand for our products.

Speaker #5: Even if it's not reflected in a small change in the backlog forward load as of the end of the quarter.

Speaker #4: Thanks, Neil. The next question is, SG&A rose to $7 million above where the operating leverage story would predict. Was the Q2 to Q3 increase in employee and contracted sales personnel a one-time capacity step that now levels off, or should we model continued SG&A growth as revenue scales?

Ms. Felix: Thanks, Neil. The next question is, SG&A rose to $7 million, above where the operating leverage story would predict. Was the Q2 to Q3 increase in employee and contracted sales personnel a one-time capacity step that now levels off? Or should we model continued SG&A growth as revenue scales? Put differently, where does SG&A settle as a percentage of sales at a $100 million-plus run rate?

[Company Representative] (Optical Cable): Thanks, Neil. The next question is, SG&A rose to $7 million, above where the operating leverage story would predict. Was the Q2 to Q3 increase in employee and contracted sales personnel a one-time capacity step that now levels off? Or should we model continued SG&A growth as revenue scales? Put differently, where does SG&A settle as a percentage of sales at a $100 million-plus run rate?

Speaker #4: Put differently, where does SG&A settle as a percentage of sales at a $100 million plus run rate?

Speaker #3: I'll take that one. We don't generally provide theoretical sales levels. However, certain sales compensation costs included in SG&A as well as other costs such as shipping costs generally tend to fluctuate with sales levels.

Tracy G. Smith: I'll take that one. We don't generally provide guidance related to future or theoretical sales levels. However, certain sales compensation costs included in SG&A, as well as other costs such as shipping costs, generally tend to fluctuate with sales levels. However, this does not mean we will not see future benefits of SG&A operating leverage as sales continue to grow.

Tracy Smith: I'll take that one. We don't generally provide guidance related to future or theoretical sales levels. However, certain sales compensation costs included in SG&A, as well as other costs such as shipping costs, generally tend to fluctuate with sales levels. However, this does not mean we will not see future benefits of SG&A operating leverage as sales continue to grow.

Speaker #3: However, this does not mean we will not see future benefits of SG&A operating leverage as sales continue to grow.

Speaker #4: Thanks, Tracy. Next question is, on funding and dilution, with working capital rising alongside growth and cash still thin, how are you funding the ramp and at what revenue level would you need to raise equity or expand the credit facility?

Ms. Felix: Thanks, Tracy. Next question is, on funding and dilution, with working capital rising alongside growth and cash still thin, how are you funding the ramp, and at what revenue level would you need to raise equity or expand the credit facility? Should shareholders anticipate a capital raise to support fiscal year 2027 growth?

[Company Representative] (Optical Cable): Thanks, Tracy. Next question is, on funding and dilution, with working capital rising alongside growth and cash still thin, how are you funding the ramp, and at what revenue level would you need to raise equity or expand the credit facility? Should shareholders anticipate a capital raise to support fiscal year 2027 growth?

Speaker #4: Should shareholders anticipate a capital raise to support fiscal year 2027 growth?

Speaker #3: As we believe we've described previously, our cash is swept daily to repay the balance on our credit revolver. So our cash balance at any point in time will generally not be very high.

Tracy G. Smith: As we believe we've described previously, our cash is swept daily to repay the balance on our credit revolver. So our cash balance at any point in time will generally not be very high. At the current time, we believe we have sufficient availability on our credit revolver and from cash generated from operations to meet our needs for the near term.

Tracy Smith: As we believe we've described previously, our cash is swept daily to repay the balance on our credit revolver. So our cash balance at any point in time will generally not be very high. At the current time, we believe we have sufficient availability on our credit revolver and from cash generated from operations to meet our needs for the near term.

Speaker #3: At the current time, we believe we have sufficient availability on a credit revolver and from cash generated from operations to meet our needs for the near term.

Speaker #4: Thanks, Tracy. Next question. Can you give some color on deliveries expected in Q4 and how you see margins progressing throughout fiscal year 2027?

Ms. Felix: Thanks, Tracy. Next question. Can you give some color on deliveries expected in Q4 and how you see margins progressing throughout fiscal year 2027?

[Company Representative] (Optical Cable): Thanks, Tracy. Next question. Can you give some color on deliveries expected in Q4 and how you see margins progressing throughout fiscal year 2027?

Speaker #3: Again, we don't provide forward guidance, so I won't comment on how we expect margins to progress throughout fiscal year 2027. But I will say that we have continued to see strong sales and demand in August, but it is too early to comment on September.

Tracy G. Smith: Again, we don't provide forward guidance, so I won't comment on how we expect margins to progress throughout fiscal year 2027. But I will say that we have continued to see strong sales and demand in August, but it is too early to comment on September.

Tracy Smith: Again, we don't provide forward guidance, so I won't comment on how we expect margins to progress throughout fiscal year 2027. But I will say that we have continued to see strong sales and demand in August, but it is too early to comment on September.

Speaker #4: Thanks. The next question is: can you comment on the increased demand cycle you are experiencing, and how long it could last?

Ms. Felix: Thanks. The next question is, can you comment on the increased demand cycle you are experiencing and how long it could last?

[Company Representative] (Optical Cable): Thanks. The next question is, can you comment on the increased demand cycle you are experiencing and how long it could last?

Speaker #3: Sure. As previously noted, we can't forecast specifically on how long we expect the increased demand cycle to continue. However, I can say that the industry in general is seeing high levels of demand and there doesn't appear to be an indication of demand weakening in the near term.

Tracy G. Smith: Sure. As previously noted, we cannot forecast specifically on how long we expect the increased demand cycle to continue. However, I can say that the industry in general is seeing high levels of demand, and there does not appear to be an indication of demand weakening in the near term.

Tracy Smith: Sure. As previously noted, we cannot forecast specifically on how long we expect the increased demand cycle to continue. However, I can say that the industry in general is seeing high levels of demand, and there does not appear to be an indication of demand weakening in the near term.

Speaker #4: Thanks, Tracy. Next question. Can you provide any sort of future outlook regarding customer demand signals?

Ms. Felix: Thanks, Tracy. Next question. Can you provide any sort of future outlook regarding customer demand signals?

[Company Representative] (Optical Cable): Thanks, Tracy. Next question. Can you provide any sort of future outlook regarding customer demand signals?

Speaker #5: So Caroline, so that you know, we're having a little bit of trouble hearing you. If Bo could confirm that he's able to hear you okay, we're hearing your question and we'll continue to answer them.

Neil D. Wilkin: Caroline, so that you know, we are having a little bit of trouble hearing you. If Bo could confirm that he is able to hear you okay. We are hearing your question, and we will continue to answer them, but your signal is breaking up just a little bit. Mr. Wilkin, are you having any problem hearing Caroline?

Neil Wilkin: Caroline, so that you know, we are having a little bit of trouble hearing you. If Bo could confirm that he is able to hear you okay. We are hearing your question, and we will continue to answer them, but your signal is breaking up just a little bit.

Speaker #5: But your signal's breaking up just a little bit.

Speaker #2: And Mr. Wilkin, are you having

[Company Representative] (Optical Cable): Mr. Wilkin, are you having any problem hearing Caroline?

Speaker #5: any problem hearing Caroline?

Speaker #2: Mr. Wilkin, I can hear her loud and clear. At this time, sir.

Operator: Mr. Wilkin, I can hear her loud and clear at this time, sir.

Neil Wilkin: I can hear her loud and clear at this time, sir.

Speaker #5: Okay, okay. Maybe it's on our end then. So, hopefully you can hear us. Please flag or let us know if you're having any trouble hearing us.

Neil D. Wilkin: Okay. Okay. Maybe on our end then. Hopefully you can hear us. Please let us know if you are having any trouble hearing us.

Neil Wilkin: Okay. Okay. Maybe on our end then. Hopefully you can hear us. Please let us know if you are having any trouble hearing us.

Speaker #4: Yep, we can hear you okay.

Ms. Felix: Yep, we can hear you okay.

[Company Representative] (Optical Cable): Yep, we can hear you okay.

Speaker #3: Okay. So other than what we have already disclosed, we cannot really provide any additional future customer demand outlook.

Tracy G. Smith: Okay. Other than what we have already disclosed, we cannot really provide any additional future customer demand outlook.

Tracy Smith: Okay. Other than what we have already disclosed, we cannot really provide any additional future customer demand outlook.

Speaker #4: Thanks, Tracy. The next question is: Are you seeing any new or emerging risks?

Ms. Felix: Thanks, Tracy. The next question is, are you seeing any new or emerging risks?

[Company Representative] (Optical Cable): Thanks, Tracy. The next question is, are you seeing any new or emerging risks?

Speaker #5: We are not seeing any new or unusual market risks at this time. As we've described during our second quarter earnings call, we have been seeing some industry-wide delays as a result of high product demand in certain fiber optic optical fiber shortages.

Neil D. Wilkin: We are not seeing any new or unusual market risks at this time. As we've described during our Q2 earnings call, we have been seeing some industry-wide delays as a result of high product demand in certain fiber optic optical fiber shortages. Additionally, we've seen some longer lead times for certain raw materials, as one would expect, given the current high demand for products. We expect these challenges will continue, but we also believe we're taking appropriate action to navigate those challenges.

Neil Wilkin: We are not seeing any new or unusual market risks at this time. As we've described during our Q2 earnings call, we have been seeing some industry-wide delays as a result of high product demand in certain fiber optic optical fiber shortages. Additionally, we've seen some longer lead times for certain raw materials, as one would expect, given the current high demand for products. We expect these challenges will continue, but we also believe we're taking appropriate action to navigate those challenges.

Speaker #5: Additionally, we've seen some longer lead times for certain raw materials, as one would expect given the current high demand. For products, we expect these challenges will continue, but we also believe we're taking appropriate action to navigate those challenges.

Speaker #4: Thanks, Neil. The next question is, can you provide an update on OCC's plans to increase capacity? What level of capacity expansion are we talking about and what is the plan?

Ms. Felix: Thanks, Neil. The next question is: can you provide an update on OCC's plans to increase capacity? What level of capacity expansion are we talking about, and what is the plan?

[Company Representative] (Optical Cable): Thanks, Neil. The next question is: can you provide an update on OCC's plans to increase capacity? What level of capacity expansion are we talking about, and what is the plan?

Speaker #5: We are regularly considering the need for investment in machinery and equipment and/or human resources to expand our capacity in general. And also for specific opportunities.

Neil D. Wilkin: We are regularly considering the need for investment in machinery and equipment and/or human resources to expand our capacity in general, and also for specific opportunities. We are seeing some opportunities to increase our capacity currently. We do not generally comment publicly on the specific capacity expansion plans for various reasons, including for competitive reasons. I think that answers the question.

Neil Wilkin: We are regularly considering the need for investment in machinery and equipment and/or human resources to expand our capacity in general, and also for specific opportunities. We are seeing some opportunities to increase our capacity currently. We do not generally comment publicly on the specific capacity expansion plans for various reasons, including for competitive reasons. I think that answers the question.

Speaker #5: We are seeing some opportunities to increase our capacity currently. We do not generally come in publicly on the specific capacity expansion plans for various reasons.

Speaker #5: Including for competitive reasons. And I think that answers the question.

Speaker #4: Thanks, Neil. The next question is, can you provide an update on fiber shortages and potential challenges of higher fiber pricing on OCC's margins?

Ms. Felix: Thanks, Neil. The next question is: can you provide an update on fiber shortages and potential challenges of higher fiber pricing on OCC's margins?

[Company Representative] (Optical Cable): Thanks, Neil. The next question is: can you provide an update on fiber shortages and potential challenges of higher fiber pricing on OCC's margins?

Neil D. Wilkin: Yes. Currently, the industry continues to experience optical fiber shortages due to excessive product demand for data centers, as well as certain other product applications. We believe OCC is successfully managing these industry dynamics as we've demonstrated during the first 9 months of this fiscal year. We do not believe these industry challenges will prevent us from continuing to report strong top-line revenue growth during the remainder of fiscal year 2026. Notably, we work to limit potential impacts on our customers and our gross profits that these industry factors may have. Of course, as we noted in the past, OCC's profit margins can also be impacted by product mix and other factors, which can be difficult to predict.

Neil Wilkin: Yes. Currently, the industry continues to experience optical fiber shortages due to excessive product demand for data centers, as well as certain other product applications. We believe OCC is successfully managing these industry dynamics as we've demonstrated during the first 9 months of this fiscal year. We do not believe these industry challenges will prevent us from continuing to report strong top-line revenue growth during the remainder of fiscal year 2026. Notably, we work to limit potential impacts on our customers and our gross profits that these industry factors may have. Of course, as we noted in the past, OCC's profit margins can also be impacted by product mix and other factors, which can be difficult to predict.

Speaker #5: Yes. Currently, the industry continues to experience optical fiber shortages due to excessive product demand for data centers as well as certain other product applications.

Speaker #5: We believe OCC is successfully managing these industry dynamics, as we have demonstrated during the first nine months of this fiscal year. We do not believe these industry challenges will prevent us from continuing to report strong top-line revenue growth during the remainder of fiscal year 2026.

Speaker #5: Notably, we work to limit potential impacts on our customers and our gross profits that these industry factors may have. Of course, as we've noted in the past, OCC's profit margins can also be impacted by product mix and other factors, which can be difficult to predict.

Speaker #4: Thanks, Neil. Next question: Can you share an update on any potential bottlenecks in ramping up manufacturing, including labor availability and costs?

Ms. Felix: Thanks, Neil. Next question. Can you share an update on any potential bottlenecks at ramping up manufacturing, including labor availability and costs?

[Company Representative] (Optical Cable): Thanks, Neil. Next question. Can you share an update on any potential bottlenecks at ramping up manufacturing, including labor availability and costs?

Neil D. Wilkin: We are seeing various different effects that are limiting our product shipments at some level, and so those are bottlenecks. Those are primarily impediments to ramping up manufacturing. The primary impediments are ramping up manufacturing at the current time is really optical fiber shortages, as we previously described. As you can also see in our results, we've been able to generate increased sales despite those impediments.

Neil Wilkin: We are seeing various different effects that are limiting our product shipments at some level, and so those are bottlenecks. Those are primarily impediments to ramping up manufacturing. The primary impediments are ramping up manufacturing at the current time is really optical fiber shortages, as we previously described. As you can also see in our results, we've been able to generate increased sales despite those impediments.

Speaker #5: We are able to we are seeing various different effects that are limiting our product shipments at some level. And so those are bottlenecks. Those are primarily impediments to ramping up manufacturing the primary impediments are ramping up manufacturing at the current time is really optical fiber shortages as we previously described.

Speaker #5: But as you can also see in our results, we've been able to generate increased sales despite those impediments.

Speaker #4: Thanks, Neil. Next question: Can you provide some color on inventory levels at OCC customers and dealers, and if this is above or below average?

Ms. Felix: Thanks, Neil. Can you provide some color on inventory levels at OCC customers and dealers, and if this is above or below average?

[Company Representative] (Optical Cable): Thanks, Neil. Can you provide some color on inventory levels at OCC customers and dealers, and if this is above or below average?

Speaker #3: As you might expect, we're not able to specifically comment on inventory levels of our products at our customers. That said, given current market conditions, we believe it would be unusual for companies to be carrying inventory in excess of current expected demand.

Tracy G. Smith: As you might expect, we are not able to specifically comment on inventory levels of our products at our customers. That said, given current market conditions, we believe it would be unusual for companies to be carrying inventory in excess of current expected demand.

Tracy Smith: As you might expect, we are not able to specifically comment on inventory levels of our products at our customers. That said, given current market conditions, we believe it would be unusual for companies to be carrying inventory in excess of current expected demand.

Speaker #4: Thanks, Tracy. Next question. What is the typical duration of your backlog and is this currently changing or does the data center-related business have different characteristics?

Ms. Felix: Thanks, Tracy. What is the typical duration of your backlog, and is this currently changing, or does the data center-related business have different characteristics?

[Company Representative] (Optical Cable): Thanks, Tracy. What is the typical duration of your backlog, and is this currently changing, or does the data center-related business have different characteristics?

Speaker #3: Various factors determine the duration of our sales order backlog and forward load, which are specific to each customer. Our backlog and forward load generally represents what we consider to be non-cancelable orders.

Tracy G. Smith: Various factors determine the duration of our sales order backlog and forward load, which are specific to each customer. Our backlog and forward load generally represents what we consider to be non-cancellable orders. However, in some cases, customers may schedule out future deliveries, while others are expected to ship as soon as we can complete manufacturing. As a result, I would not say there is a typical duration. However, I would say that most of our sales order backlog and forward load is expected to be shipped within two to three quarters.

Tracy Smith: Various factors determine the duration of our sales order backlog and forward load, which are specific to each customer. Our backlog and forward load generally represents what we consider to be non-cancellable orders. However, in some cases, customers may schedule out future deliveries, while others are expected to ship as soon as we can complete manufacturing. As a result, I would not say there is a typical duration. However, I would say that most of our sales order backlog and forward load is expected to be shipped within two to three quarters.

Speaker #3: However, in some cases, customers may schedule out future deliveries, while others are expected to ship as soon as we can complete manufacturing. As a result, I would not say there is a typical duration.

Speaker #3: However, I would say that most of our sales order backlog and forward load is expected to be shipped within two to three quarters.

Speaker #4: Thanks, Tracy. The next question is, can you help us understand what level of capacity OCC is currently operating at? On the last earnings call, Tracy, you had mentioned that OCC is looking into expanding capacity.

Ms. Felix: Thanks, Tracy. The next question is: can you help us understand what level of capacity OCC is currently operating at? On the last earnings call, Tracy, you had mentioned that OCC is looking into expanding capacity. Could you provide some additional color on which products or end markets you may focus on?

[Company Representative] (Optical Cable): Thanks, Tracy. The next question is: can you help us understand what level of capacity OCC is currently operating at? On the last earnings call, Tracy, you had mentioned that OCC is looking into expanding capacity. Could you provide some additional color on which products or end markets you may focus on?

Speaker #4: Could you provide some additional color on which products or end markets you may focus on?

Speaker #3: OCC has different levels of capacity for different product families at each of our manufacturing facilities. And so, yes, we are looking into expanding capacity for certain products at certain facilities.

Tracy G. Smith: OCC has different levels of the capacity for different product families at each of our manufacturing facilities. Yes, we are looking into expanding capacity for certain products at certain facilities. This includes additional hires as well as additional equipment.

Tracy Smith: OCC has different levels of the capacity for different product families at each of our manufacturing facilities. Yes, we are looking into expanding capacity for certain products at certain facilities. This includes additional hires as well as additional equipment.

Speaker #3: And this includes additional hires as well as additional equipment.

Speaker #4: Thanks, Tracy. Next question. Does OCC have opportunities in the grid, battery, energy, and storage systems verticals?

Ms. Felix: Thanks, Tracy. Next question. Does OCC have opportunities in the grid, battery, energy, and storage systems verticals?

[Company Representative] (Optical Cable): Thanks, Tracy. Next question. Does OCC have opportunities in the grid, battery, energy, and storage systems verticals?

Speaker #5: Yes, OCC has some fiber optic cable and connectivity opportunities in grid and energy vertical market sectors.

Neil D. Wilkin: Yes. OCC has some fiber optic cable and connectivity opportunities in grid and energy vertical market sectors.

Neil Wilkin: Yes. OCC has some fiber optic cable and connectivity opportunities in grid and energy vertical market sectors.

Speaker #4: Thanks, Neil. The next question is, Google data is projected to build a large campus of data centers very close to OCC's site in Roanoke.

Ms. Felix: Thanks, Neil. The next question is: Google Data is projected to build a large campus of data centers very close to OCC's site in Roanoke. Does this present an opportunity for you?

[Company Representative] (Optical Cable): Thanks, Neil. The next question is: Google Data is projected to build a large campus of data centers very close to OCC's site in Roanoke. Does this present an opportunity for you?

Speaker #4: Does this present an opportunity for you?

Speaker #5: OCC's primary focus in the data center market sector is multi-tenant data centers and enterprise. Data centers. However, we are following the Google data center project near us and as you'd expect, we will explore potential opportunities on that project.

Neil D. Wilkin: OCC's primary focus in the data center market sector is multi-tenant data centers and enterprise data centers. However, we are following the Google data center project near us, and as you'd expect, we will explore potential opportunities on that project. And of course, we're very excited that they're going to be setting this data center up so close to our Roanoke facility.

Neil Wilkin: OCC's primary focus in the data center market sector is multi-tenant data centers and enterprise data centers. However, we are following the Google data center project near us, and as you'd expect, we will explore potential opportunities on that project. And of course, we're very excited that they're going to be setting this data center up so close to our Roanoke facility.

Speaker #5: And of course, we're very excited that they're going to be setting this data center up so close to our Roanoke facility.

Speaker #4: Thanks, Neil. The next question is, this summer, Furuokawa announced a significant capacity expansion through Lightera. Is this an opportunity for OCC?

Ms. Felix: Thanks, Neil. The next question is: this summer, Furukawa announced a significant capacity expansion through Lightera. Is this an opportunity for OCC?

[Company Representative] (Optical Cable): Thanks, Neil. The next question is: this summer, Furukawa announced a significant capacity expansion through Lightera. Is this an opportunity for OCC?

Speaker #5: Well, as you'd expect, we don't speak for Furuokawa or Lightera. However, from OCC's perspective, Lightera is not only a strategic collaboration partner with OCC, but they are also an important supplier to OCC.

Neil D. Wilkin: Well, as you'd expect, we don't speak for Furukawa or Lightera. However, from OCC's perspective, Lightera is not only a strategic collaboration partner with OCC, but they are also an important supplier to OCC. The strategic collaboration with Lightera does add certain products to OCC's product offering.

Neil Wilkin: Well, as you'd expect, we don't speak for Furukawa or Lightera. However, from OCC's perspective, Lightera is not only a strategic collaboration partner with OCC, but they are also an important supplier to OCC. The strategic collaboration with Lightera does add certain products to OCC's product offering.

Speaker #5: The strategic collaboration with Lightera does add certain products to OCC's product offering.

Speaker #4: Thanks, Neil. The next question is, in June, the company's significantly stepped up its manufacturing-related hiring in Plano. Is this in relation to the Lightera partnership?

Ms. Felix: Thanks, Neil. The next question is, in June, the company significantly stepped up its manufacturing-related hiring in Plano. Is this in relation to the Lightera partnership? Am I correctly recalling that OCC does a lot of its data center related connectivity work in Plano?

[Company Representative] (Optical Cable): Thanks, Neil. The next question is, in June, the company significantly stepped up its manufacturing-related hiring in Plano. Is this in relation to the Lightera partnership? Am I correctly recalling that OCC does a lot of its data center related connectivity work in Plano?

Speaker #4: And am I correctly recalling that OCC does a lot of its data center-related connectivity work in Plano?

Speaker #5: Well, we're actually currently increasing staffing at each of our facilities with the largest increases at our fiber optic cable manufacturing facility in Roanoke and our connectivity and termination facility near Dallas.

Neil D. Wilkin: Well, we are actually currently increasing staffing at each of our facilities, with the largest increases at our fiber optic cable manufacturing facility in Roanoke and our connectivity and termination facility near Dallas. OCC has capabilities related to our targeted data center market sectors in each of our manufacturing facilities, including Roanoke, Dallas, as well as some in Nashville as well.

Neil Wilkin: Well, we are actually currently increasing staffing at each of our facilities, with the largest increases at our fiber optic cable manufacturing facility in Roanoke and our connectivity and termination facility near Dallas. OCC has capabilities related to our targeted data center market sectors in each of our manufacturing facilities, including Roanoke, Dallas, as well as some in Nashville as well.

Speaker #5: OCC has capabilities related to our targeted data center market sectors in each of our manufacturing facilities. Including Roanoke, Dallas, as well as some in Nashville as well.

Speaker #4: Thanks, Neil. The last question for today is, your last 10-Q changed its language around the Lightera partnership—related to Lightera products being offered and sold by the company.

Ms. Felix: Thanks, Neil. The last question for today is, your last 10-Q changed its language around the Lightera partnership related to Lightera products being offered and sold by the company. Does this mean that OCC has started to realize the first sales related to the Lightera partnership in Q2? Could you give us an update for Q3?

[Company Representative] (Optical Cable): Thanks, Neil. The last question for today is, your last 10-Q changed its language around the Lightera partnership related to Lightera products being offered and sold by the company. Does this mean that OCC has started to realize the first sales related to the Lightera partnership in Q2? Could you give us an update for Q3?

Speaker #4: Does this mean that OCC has started to realize the first sales related to the Lightera partnership in Q2? And could you give us an update for Q3?

Speaker #3: As you would expect, we are beginning to see some sales of certain Lightera products. That's the change in the language in the 10-Q.

Tracy G. Smith: As you would expect, we are beginning to see some sales of some Lightera products, thus the change in the language in the 10-Q.

Tracy Smith: As you would expect, we are beginning to see some sales of some Lightera products, thus the change in the language in the 10-Q.

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

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

[Company Representative] (Optical Cable): Thanks, Tracy and Neil. We have no other questions that were provided in advance of the call today at this time.

Speaker #5: Well, thank you, Caroline. And now we will answer any additional questions that analysts or institutional investors may have. We ask that you please submit your to limit yourself to one question.

Neil D. Wilkin: Well, thank you, Caroline. Now, we will answer any additional questions that analysts or institutional investors may have. We ask that you please limit yourself to one question. Bo, if you could please indicate the instructions to our participants to call in any questions they have, I'd appreciate it. Additionally, if you'd please mute individuals following their one question so that we can take as many of the questions from analysts and as institutional investors that wish to ask.

Neil Wilkin: Well, thank you, Caroline. Now, we will answer any additional questions that analysts or institutional investors may have. We ask that you please limit yourself to one question. Bo, if you could please indicate the instructions to our participants to call in any questions they have, I'd appreciate it. Additionally, if you'd please mute individuals following their one question so that we can take as many of the questions from analysts and as institutional investors that wish to ask.

Speaker #5: Bo, if you could please indicate the instructions to our participants to call in any questions they have, I'd appreciate it. Additionally, if you'd please mute individuals following their one question.

Speaker #5: So that we can take as many of the questions from analysts as institutional investors that wish to ask.

Speaker #2: Certainly, with Mr. Wilkin. My pleasure. Ladies and gentlemen, at this time, any questions over the phone—please press star one. If you do find that your question has been addressed, you may remove yourself from the queue by pressing star two.

Operator: Certainly, Mr. Wilkin, my pleasure. Ladies and gentlemen, at this time, any questions over the phone, please press star 1. If you do find that your question has been addressed, you may remove yourself from the queue by pressing star 2. So once again, star 1 for any questions. We'll go first this morning to Sergi Mascaro with Eden Discovery.

Speaker #2: So once again, star one for any questions. We'll go first this morning to Sergi Mascaro with Eden Discovery.

Speaker #6: Good morning, Tracy and Neil. Thanks for taking our questions. So the gross margin was very impressive this quarter. And I am wondering if this improvement is just related to higher volumes or there are other factors or other one-offs impacting the gross margin.

Sergi Mascaro: Good morning, Tracy and Neil. Thanks for taking our questions. The gross margin was very impressive this quarter, and I am wondering if this improvement is just related to higher volumes, or there are other factors or other one-offs impacting the gross margin?

Speaker #5: Well, our gross margin can vary based on manufacturing operating leverage, but also and other efficiencies. Also product mix. And so we're pleased that we've been able to show an increase in our quarters our gross profit margin percentage in over the last couple of quarters.

Neil D. Wilkin: Well, our gross margin can vary based on manufacturing, operating leverage, and other efficiencies, also product mix. We are pleased that we have been able to show an increase in our gross profit margin percentage over the last couple of quarters, and we are hoping that we will continue to maintain higher margins at the production levels we are currently at.

Neil Wilkin: Well, our gross margin can vary based on manufacturing, operating leverage, and other efficiencies, also product mix. We are pleased that we have been able to show an increase in our gross profit margin percentage over the last couple of quarters, and we are hoping that we will continue to maintain higher margins at the production levels we are currently at.

Speaker #5: And we're hoping that we're continue to maintain higher margins at the production levels we're currently at.

Speaker #2: Thank you. And just a quick reminder, ladies and gentlemen, any further questions this morning, please press star one. And we'll pause for just one moment.

Operator: Thank you. Just a quick reminder, ladies and gentlemen, any further questions this morning, please press star one, and we will pause for just one moment. Mr. Wilkin, it appears we have no further questions over the phone at this time. Sir, I would like to turn the conference back to you for any closing comments.

Speaker #2: And Mr. Wilkin, it appears we have no further questions over the phone at this time. Sir, I'd like to turn the conference back to you for any closing comments.

Speaker #5: Okay. Well, thank you. I would like to thank everyone for listening to our third quarter of fiscal year 2026 conference call today. As always, we appreciate your time.

Neil D. Wilkin: Okay. Well, thank you. I would like to thank everyone for listening to our Q3 of fiscal year 2026 conference call today. As always, we appreciate your time, and your investment in Optical Cable Corporation. Additionally, I would like to note that this Friday marks the 25th anniversary of the terrible attack on the United States on September 11, 2001. We are so grateful for our company's first responders and those that serve and support the US military for protecting us, protecting our freedom, and protecting our way of life. Thank you, all. Have a good day.

Neil Wilkin: Okay. Well, thank you. I would like to thank everyone for listening to our Q3 of fiscal year 2026 conference call today. As always, we appreciate your time, and your investment in Optical Cable Corporation. Additionally, I would like to note that this Friday marks the 25th anniversary of the terrible attack on the United States on September 11, 2001. We are so grateful for our company's first responders and those that serve and support the US military for protecting us, protecting our freedom, and protecting our way of life. Thank you, all. Have a good day.

Speaker #5: And your investment in optical cable corporation. Additionally, I would like to note that this Friday marks the 25th anniversary of the terrible attack on the United States on September 11th, 2001.

Speaker #5: We are so grateful for our company's first responders, and for those who serve and support the U.S. military, for protecting us, protecting our freedom, and protecting our way of life.

Speaker #5: Thank you all. Have a good day.

Speaker #2: Thank you very much, Mr. Wilkin. And thank you, Ms. Smith. Again, ladies and gentlemen, this brings us to the end of today's meeting. We do appreciate your time and participation.

Operator: Thank you very much, Mr. Wilkin, and thank you, Ms. Smith. Again, ladies and gentlemen, this brings us to the end of today's meeting. We do appreciate your time and participation. You may now disconnect.