ROANOKE, Va., Sept. 13 /PRNewswire-FirstCall/ -- Optical Cable
Corporation (Nasdaq: OCCF) ("OCC" or the "Company") today announced
financial results for its fiscal third quarter ended July 31, 2010. The Company achieved
significant increases in net sales and gross profit for both the
quarter and year-to-date periods compared to the same periods in
fiscal 2009, and returned to profitability in the third quarter of
fiscal 2010.
Third Quarter 2010 Financial Results
Net sales during the third quarter of fiscal year 2010 were the
highest in OCC's history -- exceeding the quarterly net sales that
OCC achieved in the fourth quarter of fiscal year 2008.
Consolidated net sales for the third quarter of fiscal year 2010
increased 32.2% to $18.8 million
compared to consolidated net sales of $14.2
million for the comparable period last year. Net sales
growth during the third quarter was achieved over a broad customer
base and product mix, with notable increases in both commercial and
specialty markets, despite the difficult economic environment.
The acquisition of Applied Optical Systems, Inc. ("AOS") by
OCC on October 31, 2009 also
contributed to the net sales growth achieved by the Company for the
third quarter of fiscal year 2010.
Net sales of OCC's fiber optic cable and enterprise connectivity
products increased 14.9% and 28.7%, respectively, during the third
quarter of fiscal 2010, compared to the same period last year.
Net sales of OCC's applied interconnect system products
(added to OCC's product offering following the Company's
acquisition of AOS) improved during the third quarter of fiscal
2010 compared to the first and second quarters of fiscal 2010.
Geographically, OCC achieved consolidated net sales growth both
in international markets and within the
United States during the third quarter of fiscal year 2010.
Net sales to customers located outside of the United States increased 83.6% in the third
quarter of fiscal 2010 compared to the same period last year, and
net sales to customers located in the
United States increased 17.3% as compared to the same period
last year.
Gross profit increased 51.8% to $6.8
million in the third quarter of fiscal 2010, compared to
$4.5 million in the third quarter of
fiscal 2009. Gross profit margin, or gross profit as a
percentage of net sales, increased to 36.2% in the third quarter of
fiscal 2010 from 31.6% in the third quarter of fiscal year 2009.
OCC recorded net income attributable to the Company of
$575,000, or $0.09 per basic and diluted share, for the third
quarter of fiscal year 2010, compared to a net loss of $1.1 million, or $0.19 per basic and diluted share, for the same
period last year.
Fiscal Year-to-Date 2010 Financial Results
Consolidated net sales for the first nine months of fiscal 2010
increased 10.2% to $49.0 million
compared to net sales of $44.5
million for the same period in fiscal 2009. Net sales in
both the Company's commercial markets and its specialty markets
increased during the first nine months of fiscal year 2010 compared
to the same period last year. The acquisition of AOS by OCC
on October 31, 2009 also contributed
to the net sales growth achieved by the Company for the first nine
months of fiscal year 2010.
Based on year-to-date results, OCC expects that net sales for
the fiscal year ending October 31,
2010 will be the highest in the Company's 27 year history.
Gross profit increased 10.7% to $16.6
million in the first nine months of fiscal 2010, compared to
$15.0 million for the same period
last year. Gross profit margin, or gross profit as a
percentage of net sales, increased slightly to 33.8% in the first
nine months of fiscal 2010 compared to 33.7% for the first nine
months of fiscal 2009.
For the first nine months of fiscal 2010, OCC recorded a net
loss attributable to the Company of $7.2
million, or $1.21 per basic
and diluted share, compared to a net loss of $1.8 million, or $0.33 per basic and diluted share, for the first
nine months of fiscal 2009. Significantly contributing to
the net loss for the first nine months of fiscal 2010 was a
non-recurring, non-cash impairment charge of $6.2 million recorded in the second fiscal
quarter to write-off the carrying value of the goodwill associated
with the acquisition of AOS.
Excluding the non-recurring, non-cash goodwill impairment
charge, the Company would have reported a net loss attributable to
OCC of $960,000, or $0.16 per share, for the first nine months of
fiscal 2010(1).
Management's Comments
Neil Wilkin, President and Chief
Executive Officer of OCC, said, "Over the past year, OCC has taken
steps to grow both organically and through strategic acquisitions
in order to offer a comprehensive suite of products to meet the
full range of our customers' needs. We are pleased to report
that these strategic investments are already bearing fruit, as
evidenced by the fact that OCC returned to profitability in our
third quarter and generated the highest quarterly net sales in the
Company's history. At the same time, and while maintaining
our customer focus, we have significantly improved our cost
structure and enhanced our financial flexibility."
Mr. Wilkin added, "Importantly, we believe our results in the
third quarter underscore the strong operating leverage OCC has in
its business model--providing OCC with the ability to substantially
increase earnings as net sales grow. Further, we believe we
are now beginning to realize product line synergies from our
strategic acquisitions. As a result of our strategic
initiatives, we believe OCC is exceptionally well-positioned in our
target markets with a full suite of high quality products that
provide our customers with unrivaled integrated solutions. We
look forward to continuing to build on OCC's strong momentum by
meeting and exceeding the needs of customers with the goal of
creating long-term value for the Company's shareholders."
Company Information
Optical Cable Corporation is a leading manufacturer of a broad
range of fiber optic and copper data communications cabling and
connectivity solutions primarily for the enterprise market,
offering an integrated suite of high quality, warranted products
which operate as a system solution or seamlessly integrate with
other providers' offerings. OCC's product offerings include
designs for uses ranging from commercial, enterprise network,
datacenter, residential and campus installations to customized
products for specialty applications and harsh environments,
including military, industrial, mining and broadcast applications.
OCC products include fiber optic and copper cabling, fiber
optic and copper connectors, specialty fiber optic and copper
connectors, fiber optic and copper patch cords, pre-terminated
fiber optic and copper cable assemblies, racks, cabinets, datacom
enclosures, patch panels, face plates, multi-media boxes and other
cable and connectivity management accessories, and are designed to
meet the most demanding needs of end-users, delivering a high
degree of reliability and outstanding performance
characteristics.
OCC is internationally recognized for pioneering the design and
production of fiber optic cables for the most demanding military
field applications, as well as of fiber optic cables suitable for
both indoor and outdoor use, and creating a broad product offering
built on the evolution of these fundamental technologies. OCC
also is internationally recognized for its role in establishing
copper connectivity data communications standards, through its
innovative and patented technologies.
Founded in 1983, OCC is headquartered in Roanoke, Virginia with offices, manufacturing
and warehouse facilities located in each of Roanoke, Virginia, near Asheville, North Carolina and near
Dallas, Texas. OCC primarily
manufactures its fiber optic cables at its Roanoke facility which is ISO 9001:2008
registered and MIL-STD-790F certified, its enterprise connectivity
products at its Asheville facility
which is ISO 9001:2008 registered, and its military and harsh
environment connectivity products and systems at its Dallas facility which is MIL-STD-790F
certified.
Optical Cable Corporation, OCC, Superior Modular Products, SMP
Data Communications, Applied Optical Systems, and associated logos
are trademarks of Optical Cable Corporation.
Further information about OCC is available on the Internet at
www.occfiber.com.
(1) This proforma net loss and net loss per share attributable
to OCC are calculated by adding the impairment charge of
$6.2 million to the Company's net
loss attributable to OCC as reported for the nine months ended
July 31, 2010. There is no tax
benefit associated with the impairment charge, as it is considered
a non-deductible permanent item for tax purposes, so there is no
change to the tax benefit as reported for the period in determining
the proforma net loss and net loss per share attributable to
OCC.
FORWARD-LOOKING INFORMATION
This news release by Optical Cable Corporation and its
subsidiaries (collectively, the "Company" or "OCC") may contain
certain forward-looking information within the meaning of the
federal securities laws. The forward-looking information may
include, among other information, (i) statements concerning the
Company's outlook for the future, (ii) statements of belief,
anticipation or expectation, (iii) future plans, strategies or
anticipated events, and (iv) similar information and statements
concerning matters that are not historical facts. Such
forwardlooking information is subject to variables, uncertainties,
contingencies and risks that may cause actual events to differ
materially from the Company's expectations. Additionally,
such variables, uncertainties, contingencies and risks may
adversely affect the Company and the Company's future results of
operations and future financial condition. Factors that could
cause or contribute to such differences from the Company's
expectations or could adversely affect the Company, include, but
are not limited to: the level of sales to key customers, including
distributors; timing of certain projects and purchases by key
customers; the economic conditions affecting network service
providers; corporate and/or government spending on information
technology; actions by competitors; fluctuations in the price of
raw materials (including optical fiber, copper, gold and other
precious metals, and plastics and other materials affected by
petroleum product pricing); fluctuations in transportation costs;
the Company's dependence on customized equipment for the
manufacture of its products and a limited number of production
facilities; the Company's ability to protect its proprietary
manufacturing technology; the Company's ability to replace royalty
income as existing patented and licensed products expire by
developing and licensing new products; market conditions
influencing prices or pricing; the Company's dependence on a
limited number of suppliers; the loss of or conflict with one or
more key suppliers or customers; an adverse outcome in litigation,
claims and other actions, and potential litigation, claims and
other actions against the Company; an adverse outcome in regulatory
reviews and audits and potential regulatory reviews and audits;
adverse changes in state tax laws and/or positions taken by state
taxing authorities affecting the Company; technological changes and
introductions of new competing products; changes in end-user
preferences for competing technologies, relative to the Company's
product offering; economic conditions that affect the
telecommunications sector, certain technology sectors or the
economy as a whole; changes in demand of our products from certain
competitors for which we provide private label connectivity
products; terrorist attacks or acts of war, and any current
or potential future military conflicts; changes in the level of
military spending by the United
States government; ability to retain key personnel;
inability to recruit needed personnel; poor labor relations; the
inability to successfully integrate the operations of the Company's
new subsidiaries; the impact of changes in accounting policies,
including those by the Securities and Exchange Commission and the
Public Company Accounting Oversight Board; the Company's ability to
continue to successfully comply with, and the cost of compliance
with, the provisions of Section 404 of the Sarbanes-Oxley Act of
2002 or any revisions to that act which apply to the Company; the
impact of changes and potential changes in federal laws and
regulations adversely affecting our business and/or which result in
increases in our direct and indirect costs as we comply with such
laws and regulations; impact of future consolidation among
competitors and/or among customers adversely affecting the
Company's position with its customers and/or its market position;
actions by customers adversely affecting the Company in reaction to
the expansion of its product offering in any manner, including, but
not limited to, by offering products that compete with its
customers, and/or by entering into alliances with, making
investments in or with, and/or acquiring parties that compete with
and/or have conflicts with customers of the Company; adverse
reactions by customers, vendors or other service providers to
unsolicited proposals regarding the management of the Company, and
the additional costs of considering and possibly defending the
Company's position on such unsolicited proposals; impact of weather
or natural disasters in the areas of the world in which the Company
operates and markets its products; economic downturns and/or
changes in market demand, exchange rates, productivity, or market
and economic conditions in the areas of the world in which the
Company operates and markets its products, and the Company's
success in managing the risks involved in the foregoing. The
Company cautions readers that the foregoing list of important
factors is not exclusive. Furthermore, the Company
incorporates by reference those factors included in current reports
on Form 8-K, in the annual report on Form 10-K for the fiscal year
ended October 31, 2009, and/or in the Company's other
filings.
(Financial Tables
Follow)
OPTICAL CABLE
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(thousands, except per share
data)
(unaudited)
|
|
|
Three Months Ended
July 31,
|
|
Nine Months Ended
July 31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
18,779
|
|
$
14,207
|
|
$
49,042
|
|
$
44,509
|
|
Cost of goods sold
|
11,972
|
|
9,725
|
|
32,449
|
|
29,515
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
6,807
|
|
4,482
|
|
16,593
|
|
14,994
|
|
|
|
|
|
|
|
|
|
|
SG&A expenses
|
5,999
|
|
5,387
|
|
18,240
|
|
17,009
|
|
Royalty income, net
|
(315)
|
|
(297)
|
|
(925)
|
|
(679)
|
|
Amortization of intangible
assets
|
147
|
|
208
|
|
440
|
|
626
|
|
Impairment of
goodwill
|
-
|
|
-
|
|
6,246
|
|
-
|
|
Impairment of intangible assets
(other than
goodwill)
|
-
|
|
190
|
|
-
|
|
190
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
976
|
|
(1,006)
|
|
(7,408)
|
|
(2,152)
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense),
net
|
(159)
|
|
(170)
|
|
(384)
|
|
(504)
|
|
Other, net
|
(1)
|
|
-
|
|
67
|
|
25
|
|
Other
expense, net
|
(160)
|
|
(170)
|
|
(317)
|
|
(479)
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
816
|
|
(1,176)
|
|
(7,725)
|
|
(2,631)
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
282
|
|
(68)
|
|
(363)
|
|
(797)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
534
|
|
$
(1,108)
|
|
$
(7,362)
|
|
$
(1,834)
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
noncontrolling
Interest
|
(41)
|
|
-
|
|
(155)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to OCC
|
$
575
|
|
$
(1,108)
|
|
$
(7,207)
|
|
$
(1,834)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share
attributable to
OCC: Basic
and diluted
|
$
0.09
|
|
$
(0.19)
|
|
$
(1.21)
|
|
$
(0.33)
|
|
|
|
|
|
|
|
|
|
|
PROFORMA net income (loss)
attributable to OCC,
EXCLUDING impairment of
goodwill (1)
|
$
575
|
|
$
(1,108)
|
|
$
(960)
|
|
$
(1,834)
|
|
|
|
|
|
|
|
|
|
|
PROFORMA net income (loss) per
share
attributable to OCC, EXCLUDING
impairment
of goodwill: Basic and
diluted (1)
|
$
0.09
|
|
$
(0.19)
|
|
$
(0.16)
|
|
$
(0.33)
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
6,495
|
|
5,832
|
|
5,933
|
|
5,549
|
|
|
|
|
|
|
|
|
|
(1)
|
Proforma net income (loss)
attributable to OCC and proforma net income (loss) per share
attributable to OCC are
calculated by excluding the
non-cash, non-recurring impairment of goodwill charge of $6.2
million recorded during
the second quarter of fiscal
year 2010 from the Company's net loss attributable to OCC as
reported for the nine
months ended July 31, 2010.
There is no tax benefit associated with the goodwill
impairment charge, as it is
considered a non-deductible
permanent item for tax purposes. Accordingly, there is no
change to the tax benefit as
reported for the period in
determining the proforma net loss and net loss per
share.
|
|
|
|
OPTICAL CABLE
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEET DATA
(thousands)
(unaudited)
|
|
|
July 31,
2010
|
|
October 31,
2009
|
|
Cash and cash
equivalents
|
$
2,058
|
|
$
1,948
|
|
Trade accounts receivable,
net
|
10,494
|
|
9,533
|
|
Inventories
|
13,404
|
|
12,306
|
|
Other current assets
|
2,857
|
|
3,915
|
|
Total current
assets
|
$
28,813
|
|
$
27,702
|
|
Non-current assets
|
15,467
|
|
22,625
|
|
Total
assets
|
$
44,280
|
|
$
50,327
|
|
|
|
|
|
|
Current liabilities
|
$
7,656
|
|
$
7,632
|
|
Non-current
liabilities
|
10,321
|
|
9,438
|
|
Total
liabilities
|
$
17,977
|
|
$
17,070
|
|
Total shareholders' equity
attributable to OCC
|
26,458
|
|
33,257
|
|
Noncontrolling
interest
|
(155)
|
|
―
|
|
Total shareholders'
equity
|
26,303
|
|
33,257
|
|
Total liabilities
and shareholders' equity
|
$
44,280
|
|
$
50,327
|
|
|
|
|
|
|
|
AT THE COMPANY:
|
|
|
|
|
Neil Wilkin
|
Tracy Smith
|
|
Chairman, President &
CEO
|
Senior Vice President &
CFO
|
|
(540) 265-0690
|
(540) 265-0690
|
|
investorrelations@occfiber.com
|
investorrelations@occfiber.com
|
|
|
|
|
AT JOELE FRANK, WILKINSON
BRIMMER KATCHER:
|
|
|
|
|
Andrew Siegel
|
Aaron Palash
|
|
(212) 355-4449 ext.
127
|
(212) 355-4449 ext.
103
|
|
occf-jfwbk@joelefrank.com
|
occf-jfwbk@joelefrank.com
|
|
|
|
SOURCE Optical Cable Corporation
Copyright . 13 PR Newswire