Aaron Palash - Investor Relations Neil Wilkin - President and Chief Executive Officer Tracy Smith - Senior Vice President and Chief Financial Officer

Good morning. My name is Kristen and I will be your conference operator today. At this time, I would like to welcome everyone to the Optical Cable Corporation Fourth Quarter and Fiscal Year 2016 Earnings Conference Call. [Operator Instructions] It is now my pleasure to hand our program over to Mr. Palash. You may begin.

Thank you. Good morning and thank you all for participating on Optical Cable Corporation’s fourth quarter of fiscal year 2016 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 is Neil Wilkin, President and Chief Executive Officer of OCC and Tracy Smith, Senior Vice President and Chief Financial Officer. Before we begin, I would 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 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 content of the Internet webcast on www.occfiber.com as well as today’s call. Now I will turn the call over to Neil Wilkin. Neil, please begin.

Thank you, Aaron and good morning everyone. I will begin the call today with a few opening remarks regarding our fourth quarter and fiscal year 2016. Tracy will then review the fourth quarter and full year results for the 3-month and 12-month periods ended October 31, 2016 in more 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 opportunities to make 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. Over the course of fiscal year 2016, we again demonstrated our ability to adjust course in a challenging market environment to position OCC for success. In 2016, we continued to exercise – we continued to experience market weakness that increased towards the end of our prior fiscal year, particularly in certain of our specialty markets, including military, mining, oil and gas and wireless carrier markets. The strong U.S. dollar also continued to negatively impact our international markets increasing the price of our products for international customers. In response to these challenges, we focused on two categories of initiatives in fiscal year 2016, cost reductions aimed at cutting expenses and strengthening manufacturing efficiencies and sales marketing and product initiatives to drive increased sales in markets with the greatest growth opportunities and maintain sales levels in more static markets. OCC achieved success in both of these initiatives and I want to take this opportunity to provide you with a little more detail on them. As I mentioned, we continued to take steps to reduce expenses across all expense categories and improve manufacturing efficiencies. These…

Thank you, Neil. Consolidated net sales for fiscal 2016 were $64.6 million, a decrease of 12.2% compared to net sales of $73.6 million for fiscal 2015. Net sales continued to be negatively impacted by reduced demand in our enterprise market and in certain specialty markets. Our net sales were negatively impacted by a decrease in demand in the military, oil and gas and mining specialty markets during fiscal 2016 as well as the wireless carrier markets. The strong U.S. dollar also impacted sales outside of the U.S. during fiscal 2015. Consolidated net sales for the fourth quarter of fiscal 2016 increased to $17.3 million compared to net sales of $16.8 million for the same period last year. We have experienced sequential quarterly improvement in net sales during fiscal 2016. Gross profit was $19.7 million in fiscal year 2016 compared to $21.8 million in fiscal year 2015. Gross profit margin or gross profit as a percentage of net sales was 30.5% in fiscal 2016 compared to 29.6% in fiscal 2015. Gross profit was $6.2 million in the fourth quarter of fiscal 2016 compared to $5 million in the fourth quarter of fiscal year 2015. Gross profit margin was 35.9% in the fourth quarter of fiscal 2016 compared to 30% in the fourth quarter of fiscal 2015. Gross profit margin for the fourth quarter and for fiscal 2016 was positively impacted primarily by a change in product mix, including an increase in net sales of certain fiber optic cable products that positively impacted gross profit and a decrease in net sales of certain fiber optic cable products that negatively impacted gross profit in fiscal 2015. Additionally, concerted efforts to reduce manufacturing costs and increased production efficiencies contributed to the increase in gross profit in fiscal 2016. SG&A expenses decreased $3.3 million or…

Thank you, Tracy. And now, if you have any questions, we are happy to answer them. Operator, if you can please indicate the instructions for our participants to call in any questions they may have, I would appreciate it.

Okay. Aaron, are there any questions that were submitted by individual investors in advance of today’s call?

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

Okay. Well, I would like to thank everyone for listening to our annual conference call today for fiscal year 2016. As always, we appreciate your time and interest in OCC. During this holiday season, please remember those men and women in uniform defending freedom and protecting our country and their families. We thank them for their service, their sacrifice and their families’ sacrifice. Happy holidays, Merry Christmas and Happy New Year to you and your family and thank you for your continued interest in Optical Cable Corporation.

Ladies and gentlemen, this does conclude today’s conference call. You may now disconnect your lines.