Aaron Palash Neil D. Wilkin - Chairman, Chief Executive Officer and President Tracy G. Smith - Chief Financial Officer, Senior Vice President and Corporate Secretary

Good morning. I'll be your conference operator today. At this time, I would like to welcome you to the Optical Cable Corporation Second Quarter 2013 Earnings Conference Call. [Operator Instructions] Mr. Aaron Palash, you may begin your conference.

Thank you. Good morning, and thank you, all, for participating in Optical Cable Corporation's second quarter of fiscal year 2013 conference call. By this time, everyone should have a copy of the earnings press release. If you don't have it, please visit www.occfiber.com for a copy. On the call with us today is Neil Wilkin, Chairman, President and Chief Executive Officer of OCC. 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, 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. Now I'll turn the call over to Neil Wilkin. Neil, please begin.

Thank you, Aaron, and good morning, everyone. Joining me today on the call at OCC's Roanoke, Virginia, corporate headquarters is Tracy Smith, our Senior Vice President and Chief Financial Officer. I will begin the call today with a few opening remarks. Tracy will then review the second quarter results for the 3-month and 6-month periods ended April 30, 2013, in more detail. After Tracy's remarks, we will answer as many of your questions as we can. As is the normal practice, we will take questions from analysts and institutional investors during the Q&A session. We also offer individual 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. Consolidated net sales for the second quarter of fiscal year 2013 were $19.1 million, down 13.3% when compared to net sales of $22.1 million for the second quarter of fiscal year 2012. And OCC achieved the second higher quarterly net sales on the company's history. Sequentially, net sales increased 10.6% in the second quarter of fiscal year 2013 compared to net sales of $17.3 million for the first quarter of the year. We believe our second fiscal quarter results reflect difficult year-over-year comparisons relative to the second -- relative to the record setting results for the second quarter of fiscal 2012, which we believe were not representative of our typical quarterly seasonality patterns. Our gross profit for the quarter was impacted by increases in plant capacity that we made to accommodate previous large orders for major customers, capacity that we believe will be utilized by future large orders. We also continued to experience weakness in certain of our markets that persisted throughout the first half of fiscal 2013. Despite these continued economic…

Thanks, Neil. Consolidated net sales for the second quarter of fiscal 2013 decreased 13.3% to $19.1 million compared to net sales of $22.1 million for the same period last year. Net sales to customers in the United States decreased 17.4% in the second quarter of fiscal 2013 compared to the same period last year, and net sales to customers outside of the United States decreased 1.8% compared to the same period last year. Consolidated net sales for the first half of fiscal 2013 decreased 7.5% to $36.4 million compared to net sales of $39.4 million for the same period last year. We experienced an increase in net sales during the first half of fiscal 2013 in our specialty markets compared to the same period last year, but this increase was offset by decreases in net sales in our commercial market. Net sales to customers in the United States decreased 13.8% in the first half of fiscal 2013 compared to the same period last year, while net sales to customers outside of the United States increased 9.5%. Decrease in net sales during the second quarter and first half of fiscal year 2013 compared to the same periods last year is primarily due to the fact that we recognized net sales totaling, in the aggregate, approximately $4.8 million and $5.9 million, respectively, during the second quarter and the first half of fiscal 2012 as a result of a number of large orders for 2 customers that did not recur at the same levels during the second quarter and the first half of fiscal 2013. Additionally, the extended global economic weakness in certain of our markets continues to contribute to our lower net sales to other customers. Gross profit decreased 24.8% to $6.7 million in the second quarter of fiscal 2013 compared to…

Thank you, Tracy. And now, we are happy to answer as many of your questions as we can. Operator, if you could please indicate the instructions for participants to call in their questions, I would appreciate it.

[Operator Instructions] At this time, we have no audio questions.

Aaron, do we have any questions from shareholders, individual shareholders, provided in advance of the call?

Neil, at this time, we do not have any questions submitted by individual shareholders.

Okay. Well, with that, I would like to thank everyone for participating on today's call. And as always, we appreciate your time and your interest in Optical Cable Corporation.

Thank you. This concludes your conference. You may now disconnect.