OCC recorded net income of $3.3 million or $0.42 per basic and diluted share for the first nine months of fiscal year 2023 compared to a net loss of $1.5 million or $0.20 per basic and diluted share for the first nine months of fiscal year 2022. In addition to improved sales and gross profit, the company’s results benefited from the gain on insurance proceeds received for damage to property and equipment, totaling $2 million. This was recorded as other income net on the company’s statement of operations during the first nine months of fiscal year 2023. During the second and third quarters of fiscal year 2023, we received insurance proceeds in connection with our office building and its content at our Asheville facilities sustaining water damage from a burst pipe in the sprinkler system at the end of December 2022.
In connection with this event, we recognized a gain on insurance proceeds received for damage to property and equipment during the first nine months of fiscal year 2023, totaling $2 million. To the extent we incur expenses in future periods to restore, repair or replace damaged assets, we may recognize offsetting losses in those future periods. At this time, we do not expect future restoration and repair costs to exceed any insurance proceeds. As of July 31, 2023, we had outstanding borrowings of $7.3 million on our revolver and $3.9 million in available credit. We also had outstanding loan balances of $4.3 million under our real estate term loan. And with that, I will turn the call back over to you, Neil.
Neil Wilkin: Thank you, Tracy. And now, if analysts or institutional investors have questions, we are happy to answer them. Angela, if you could please indicate the instructions for our participants to call in any questions they may have, I’d appreciate it. Again, we are only taking live questions from analysts and institutional investors.
Operator: [Operator Instructions] It appears there are no questions at this time. I will now turn the program back over to our presenters for additional remarks.
Neil Wilkin: Thank you, Angela. Aaron, I know we have some questions that have been submitted by individual investors. If you can walk us through those, I’d appreciate it.
Aaron Palash: Sure. Here’s the first. There was a recent article in the Wall Street Journal about the building out of broadband to all types of rural areas in the U.S.A. Might OCC be a beneficiary of this build-out? And also, might the increasing tension with China work to OCC’s advantage in any way?
Neil Wilkin: First part of the question, OCC does have products that are used in broadband-related applications. Generally, the broadband market has not been 1 of OCC’s targeted markets for a number of reasons, however, we are following the developments and the potential opportunities in the broadband markets. With respect to the second part of the question, as you all – as listeners know, for sure, there’s been more onshoring of manufacturing in the U.S., and as a U.S. manufacturer, we believe this trend provides us with additional opportunities.
Aaron Palash: Next question. The cash balance is always low at quarter end. Is it low throughout the quarter? And does this cause any issues in regards to running the company?
Neil Wilkin: I’m going to ask Tracy to answer that question, Aaron.
Tracy Smith: Sure. The cash balance reflects the way advances on and payments on our revolver work. Higher accounts receivable collections pay down our revolver on a daily basis, which is not unusual, so we believe our revolver provides sufficient capital to meet our business needs. As you know, OCC benefits from a strong balance sheet with a current ratio of 3:1 at the end of the third quarter, even when excluding our restricted cash balance.
Aaron Palash: Okay. That was the last question supported before the deadline.
Neil Wilkin: Okay. Thank you. Thank you, Aaron. We’d like to thank everyone for listening to our third quarter fiscal year 2023 conference call today. As always, we appreciate your time and your investment in Optical Cable Corporation. Thank you.
Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time.
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