ROANOKE, Va., Jan. 24, 2011 /PRNewswire/ -- Optical Cable
Corporation (Nasdaq GM: OCCF) ("OCC®" or the "Company") today
announced financial results for its fourth quarter and fiscal year
ended October 31, 2010.
OCC's consolidated net sales for fiscal year 2010 were the
highest in the Company's history.
Fourth Quarter 2010 Financial Results
Consolidated net sales for the fourth quarter of fiscal year
2010 increased 31.1% to $18.5 million
compared to net sales of $14.1
million for the comparable period in fiscal year 2009.
Net sales in both the Company's commercial market and its
specialty markets increased during the fourth quarter of fiscal
year 2010 compared to the same period last year. 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 in the fourth quarter
of fiscal year 2010.
Gross profit increased 47.9% to $7.2
million in the fourth quarter of fiscal year 2010, compared
to $4.8 million for the fourth
quarter of fiscal year 2009. Gross profit margin, or gross
profit as a percentage of net sales, increased to 38.8% in the
fourth quarter compared to 34.4% in the same period last year.
OCC recorded net income attributable to the Company of
$1.5 million, or $0.23 per basic and diluted share, for the fourth
quarter of fiscal year 2010, compared to a net loss of $90,000, or $0.01
per basic and diluted share, for the fourth quarter of fiscal year
2009.
During the fourth quarter of fiscal year 2010, OCC reversed a
$666,000, or $0.10 per share, goodwill impairment charge
associated with a purchase accounting adjustment in connection with
the AOS acquisition. Excluding the positive impact that this
goodwill impairment charge reversal had on income from operations,
the Company's proforma net income attributable to OCC was
$808,000, or $0.13 per share, during the fourth quarter of
fiscal year 2010.(1)
Fiscal Year 2010 Financial Results
Consolidated net sales increased 15.2% to $67.5 million in fiscal year 2010, compared to
$58.6 million in fiscal year 2009.
Net sales growth during the fiscal year 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 AOS acquisition also contributed to the net
sales growth achieved by the Company in fiscal year 2010.
Geographically, OCC achieved consolidated net sales growth both
in international markets and within the
United States. Net sales to customers located outside
of the United States increased
14.3% in fiscal year 2010 compared to the prior year, and net sales
to customers located in the United
States increased 15.6%.
Gross profit increased 19.8% to $23.8
million for fiscal year 2010, compared to $19.8 million for fiscal year 2009. Gross
profit margin, or gross profit as a percentage of net sales,
increased to 35.2% for fiscal year 2010 from 33.9% for fiscal year
2009.
For fiscal year 2010, OCC recorded a net loss attributable to
the Company of $5.7 million, or
$0.95 per basic and diluted share,
compared to a net loss of $1.9
million, or $0.34 per basic
and diluted share, for fiscal year 2009. Significantly
contributing to the net loss for fiscal year 2010 was a
non-recurring, non-cash net impairment charge of $5.6 million recorded to write-off the carrying
value of the goodwill associated with the acquisition of AOS.
Excluding the non-recurring, non-cash net goodwill impairment
charge of $5.6 million, the Company
would have reported a net loss attributable to OCC of $153,000, or $0.03
per share, for fiscal year 2010.(2)
At the end of fiscal year 2010, OCC's net book value
attributable to OCC was $27.9
million, or $4.44 per share.
In addition, OCC had a retained earnings balance of
$21.9 million, or $3.48 per share as of the end of the fiscal year.
OCC's share price closed at $3.70 per share on Friday,
January 21, 2011.
Management's Comments
Neil Wilkin, President and Chief
Executive Officer of OCC, said, "During the fiscal fourth quarter,
we built on OCC's strong momentum to finish the year with the
highest net sales in our company's history. Importantly, we
generated record revenue by meeting the needs of our diverse,
global customer base, which is increasingly taking advantage of
OCC's comprehensive suite of products and integrated solutions.
With our strategic acquisitions now positively contributing
to our bottom line results, we are focused on maintaining our
operational discipline and executing on our plan to grow sales and
earnings in order to create meaningful value for shareholders."
Mr. Wilkin added, "In addition to achieving record sales, we are
pleased to have further strengthened our balance sheet and
initiated a quarterly dividend to provide a regular return of
capital to our shareholders. Despite challenging economic and
market conditions, we demonstrated OCC's strength in 2010 and we
are confident in OCC's strategy, market position and prospects for
continued growth and value creation in the future."
Company Information
Optical Cable Corporation ("OCC") 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 ISO 9001:2008
registered and 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.
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 our
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 forward-looking information is
subject to variables, uncertainties, contingencies and risks that
may cause actual events to differ materially from our expectations,
and furthermore, such variables, uncertainties, contingencies and
risks may also adversely affect Optical Cable Corporation and its
subsidiaries, the Company's future results of operations and future
financial condition, and/or the future equity value of the Company.
Factors that could cause or contribute to such differences
from our 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;
our dependence on customized equipment for the manufacture of our
products and a limited number of production facilities; our ability
to protect our proprietary manufacturing technology; our ability to
replace royalty income as existing patented and licensed products
expire by developing and licensing new products; market conditions
influencing prices or pricing; our 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 us; 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 us; technological changes and introductions
of new competing products; changes in end-user preferences for
competing technologies, relative to our 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 complete the integration of the
operations of our new subsidiaries; the impact of changes in
accounting policies and related costs of compliance, including
changes by the Securities and Exchange Commission (SEC), the Public
Company Accounting Oversight Board (PCAOB), the Financial
Accounting Standards Board (FASB), and/or the International
Accounting Standards Board (IASB); our 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 us; 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, including our direct and indirect costs
of compliance with such laws and regulations; the impact of the
Patient Protection and Affordable Care Act of 2010, the Health Care
and Education Reconciliation Act of 2010, and any revisions to
those acts that apply to us and the related legislation and
regulation associated with those acts, which directly or indirectly
results in increases to our costs; the impact of changes in state
or federal tax laws and regulations increasing our costs; impact of
future consolidation among competitors and/or among customers
adversely affecting our position with our customers and/or our
market position; actions by customers adversely affecting us in
reaction to the expansion of our product offering in any manner,
including, but not limited to, by offering products that compete
with our 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 ours; voluntary or
involuntary delisting of the Company's capital stock from any
exchange on which it is traded; the deregistration by the Company
from SEC reporting requirements, as a result of the small number of
holders of the Company's capital stock; adverse reactions by
customers, vendors or other service providers to unsolicited
proposals regarding the ownership or management of the Company; the
additional costs of considering and possibly defending our position
on such unsolicited proposals; impact of weather or natural
disasters in the areas of the world in which we operate and market
our products; an increase in the number of the Company's capital
stock issued and outstanding; economic downturns and/or changes in
market demand, exchange rates, productivity, or market and economic
conditions in the areas of the world in which we operate and market
our products; and our success in managing the risks involved in the
foregoing. The foregoing is not intended to be complete and
the Company is subject to other variables, uncertainties,
contingencies and risks than those set forth above.
(1) This reversal of a goodwill impairment charge
partially reduces the $6.2 million
non-cash, non-recurring goodwill impairment charge recorded by the
Company during the second quarter of fiscal year 2010. The
purchase accounting adjustment made during the fourth quarter was
primarily the result of the Company's adjustment to the valuation
of certain deferred tax assets acquired in the purchase of AOS, and
is not a result of a re-evaluation of the goodwill impairment
recorded during the second quarter of fiscal year 2010. There
is no tax benefit associated with the reversal of the goodwill
impairment charge in the fourth quarter, as it is considered a
non-deductible permanent item for tax purposes. Accordingly,
there is no change to the tax expense as reported for fourth
quarter of fiscal year 2010 in determining the proforma net loss
and net loss per share.
(2) This proforma net loss attributable to OCC and
proforma net loss per share attributable to OCC are calculated by
excluding the non-cash, non-recurring net impairment of goodwill
charge of $5.6 million that was
recorded during fiscal year 2010 from the Company's net loss
attributable to OCC as reported for the fiscal year ended
October 31, 2010. The net
goodwill impairment charge of $5.6
million during fiscal year 2010 consists of (i) a
$6.2 million goodwill impairment
charge recognized during the second quarter of fiscal year 2010 and
(ii) a $666,000 reversal of the
goodwill charge associated with a purchase accounting adjustment
recognized during the fourth quarter of fiscal year 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 expense as reported for fiscal year 2010 in determining the
proforma net loss and net loss per share.
(Financial Tables Follow)
OPTICAL
CABLE CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands, except
per share data)
(unaudited)
|
|
|
Three Months
Ended
October
31,
|
Fiscal Year
Ended
October
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
18,464
|
|
$
14,080
|
|
$
67,506
|
|
$
58,589
|
|
Cost of goods sold
|
11,298
|
|
9,233
|
|
43,746
|
|
38,748
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
7,166
|
|
4,847
|
|
23,760
|
|
19,841
|
|
SG&A expenses
|
6,028
|
|
5,336
|
|
24,268
|
|
22,345
|
|
Royalty income, net
|
(309)
|
|
(198)
|
|
(1,233)
|
|
(878)
|
|
Amortization of intangible
assets
|
146
|
|
199
|
|
587
|
|
825
|
|
Impairment of
goodwill
|
(666)
|
|
-
|
|
5,580
|
|
-
|
|
Impairment of intangible assets
(other than goodwill)
|
-
|
|
153
|
|
-
|
|
344
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
1,967
|
|
(643)
|
|
(5,442)
|
|
(2,795)
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense),
net
|
(157)
|
|
653
|
|
(542)
|
|
149
|
|
Other, net
|
(3)
|
|
(9)
|
|
65
|
|
16
|
|
Other income
(expense), net
|
(160)
|
|
644
|
|
(477)
|
|
165
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
1,807
|
|
1
|
|
(5,919)
|
|
(2,630)
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
455
|
|
91
|
|
91
|
|
(706)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
1,352
|
|
$
(90)
|
|
$
(6,010)
|
|
$
(1,924)
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
noncontrolling
|
|
|
|
|
|
|
|
|
interest
(2)
|
(122)
|
|
-
|
|
(277)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to OCC
|
$
1,474
|
|
$
(90)
|
|
$
(5,733)
|
|
$
(1,924)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share
attributable to
|
|
|
|
|
|
|
|
|
OCC: Basic
and diluted
|
$
0.23
|
|
$
(0.01)
|
|
$
(0.95)
|
|
$
(0.34)
|
|
|
|
|
|
|
|
|
|
|
PROFORMA net income (loss)
attributable to OCC, EXCLUDING impairment of goodwill
(1)
|
$
808
|
|
|
|
$
(153)
|
|
|
|
PROFORMA net income (loss) per
share attributable to OCC, EXCLUDING impairment of goodwill: Basic
and diluted (1)
|
$
0.13
|
|
|
|
$
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTICAL
CABLE CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(thousands,
except per share data)
(unaudited)
|
|
|
Three Months
Ended
October
31,
|
Fiscal Year
Ended
October
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
6,388
|
|
6,543
|
|
6,015
|
|
5,656
|
|
|
|
|
|
|
|
|
|
|
(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 net impairment of goodwill charge of $5.6 million
associated with the acquisition of Applied Optical Systems, Inc.
("AOS") that was recorded during fiscal year 2010 from the
Company's net loss attributable to OCC as reported for the fiscal
year ended October 31, 2010. The goodwill impairment charge
of $5.6 million consists of (i) a $6.2 million goodwill impairment
charge recognized during the second quarter of fiscal year 2010 and
(ii) a $666,000 reversal of the goodwill charge associated with a
purchase accounting adjustment recognized during the fourth quarter
of fiscal year 2010. The purchase accounting adjustment made
during the fourth quarter was primarily the result of the Company's
adjustment to the valuation of certain deferred tax assets acquired
in the purchase of AOS, and is not a result of a re-evaluation of
the goodwill impairment recorded during the second quarter of
fiscal year 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 expense as reported for fiscal year 2010 in
determining the proforma net loss and net loss per
share.
(2) Accounting Standards
Codification 810-10, Consolidation
("ASC
810-10"), was
adopted by OCC effective for fiscal year 2010 as it relates to
noncontrolling interests. There are no noncontrolling
interest amounts presented for fiscal year 2009 since the minority
interest's share of losses attributable to Centric Solutions LLC
was charged against the Company's majority interest in accordance
with the previous accounting literature.
|
|
|
|
|
|
|
|
|
|
OPTICAL
CABLE CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(thousands)
(unaudited)
|
|
|
October
31,
2010
|
October
31,
2009
|
|
Cash and cash
equivalents
|
$
2,522
|
|
$
1,948
|
|
Trade accounts receivable,
net
|
10,660
|
|
9,533
|
|
Inventories
|
14,423
|
|
12,306
|
|
Other current assets
|
3,062
|
|
3,915
|
|
Total current
assets
|
30,667
|
|
27,702
|
|
Non-current assets
|
14,624
|
|
22,625
|
|
Total
assets
|
$
45,291
|
|
$
50,327
|
|
|
|
|
|
|
Current liabilities
|
$
7,762
|
|
$
7,632
|
|
Non-current
liabilities
|
9,949
|
|
9,438
|
|
Total
liabilities
|
17,711
|
|
17,070
|
|
Total shareholders' equity
attributable to OCC
|
27,857
|
|
33,257
|
|
Noncontrolling interest
(a)
|
(277)
|
|
-
|
|
Total shareholders'
equity
|
27,580
|
|
33,257
|
|
Total liabilities
and shareholders' equity
|
$
45,291
|
|
$
50,327
|
|
(a) ASC 810-10,
Consolidation, was adopted by OCC
effective for fiscal year 2010 as it relates to noncontrolling
interests. There are no noncontrolling interest amounts
presented for fiscal year 2009 since the minority interest's share
of losses attributable to Centric Solutions LLC was charged against
the Company's majority interest in accordance with the previous
accounting literature.
|
|
|
|
|
|
|
|
|
|
|
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