ROANOKE, Va., Sept. 12, 2017 /PRNewswire/ -- Optical Cable
Corporation (Nasdaq GM: OCC) ("OCC®" or the "Company")
today announced financial results for its third quarter ended
July 31, 2017.
Third Quarter 2017 Financial Results
Consolidated net sales for the third quarter of fiscal year 2017
were $16.4 million, a 2.9% decrease,
compared to net sales of $16.9
million for the third quarter of fiscal year 2016, primarily
resulting from weakness in the enterprise markets during the
third quarter. The Company increased net sales in its
specialty markets in the third quarter of fiscal 2017, compared to
the same period last year, overcoming continued weakness in the
military portion of its specialty markets. The increase in
net sales in specialty markets achieved was not sufficient to
overcome the decrease in net sales in enterprise markets.
Sequentially, net sales continued to grow in the third quarter
of fiscal year 2017, increasing 3.7% compared to net sales of
$15.8 million in the prior
quarter. Net sales in the third quarter increased 12.5% as
compared to net sales of $14.6
million for the first quarter of fiscal year 2017.
The Company saw some improvement in net sales to customers
outside of the United States, with
an increase of 1.2% in the third quarter of fiscal year 2017
compared to the same period last year. Net sales to customers
in the United States decreased
3.8% compared to the same period last year.
Gross profit was $5.3 million in
the third quarter of fiscal year 2017, a decrease of 2.9% compared
to gross profit of $5.5 million in
the third quarter of fiscal year 2016. Gross profit margin,
or gross profit as a percentage of net sales, was 32.3% in the
third quarters of both fiscal years 2017 and 2016.
SG&A expenses increased 6.9% to $5.4
million during the third quarter of fiscal year 2017,
compared to $5.1 million for the
third quarter of fiscal year 2016. The increase in SG&A
expenses during the third quarter of fiscal 2017 compared to the
same period last year was primarily due to increases in employee
related costs intended to grow future sales into the next fiscal
year.
OCC recorded a net loss of $295,000, or $0.05
per basic and diluted share, for the third quarter of fiscal year
2017, compared to net income of $188,000, or $0.03
per basic and diluted share, for the third quarter of fiscal year
2016.
Fiscal Year-to-Date 2017 Financial Results
Consolidated net sales were $46.9
million for the first nine months of fiscal 2017, a slight
decrease compared to net sales of $47.3
million for the same period in fiscal 2016. The
Company experienced slight decreases in net sales in both its
enterprise and specialty markets in the first nine months of fiscal
year 2017, compared to the same period last year.
Net sales to customers in the United
States increased less than one percent in the first nine
months of fiscal year 2017, compared to the same period last year,
while net sales to customers outside of the United States decreased 6.7% compared to
the same period last year. During the first nine months of
fiscal 2017, net sales outside of the
United States was negatively impacted by a strong U.S.
dollar relative to other currencies, particularly in certain
geographic regions.
Gross profit increased 16.7% to $15.8
million in the first nine months of fiscal year 2017,
compared to $13.5 million in the
first nine months of fiscal 2016. Gross profit margin
increased to 33.7% in the first nine months of fiscal year 2017,
compared to 28.6% in the first nine months of fiscal year
2016. Gross profit margin for the first nine months of fiscal
2017 was positively impacted by a shift in product mix toward
certain higher margin products.
SG&A expenses increased 6.5% to $16.5
million during the first nine months of fiscal year 2017,
compared to $15.5 million for the
same period last year. The increase in SG&A expenses
during the first nine months of fiscal 2017, compared to the same
period last year, was primarily due to increases in employee
related costs, legal fees, and marketing expenses.
OCC recorded a net loss attributable to the Company of
$1.2 million, or $0.18 per basic and diluted share, for the first
nine months of fiscal year 2017, compared to a net loss of
$2.5 million, or $0.40 per basic and diluted share, for the same
period last year.
Management's Comments
Neil Wilkin, President and Chief
Executive Officer of OCC, said, "During the first nine months of
fiscal year 2017, OCC significantly improved gross profit and
bottom line performance. After strengthening in the first
half of the year, net sales were weaker in our enterprise markets
during the third quarter. We believe this market weakness is
temporary. In our third quarter, we continued taking steps to
improve long-term performance, including executing on sales and
business development efforts, as well as product innovation. These
efforts have helped us increase net sales in the past two
consecutive quarters, despite weakness in certain of our specialty
markets. We are confident that these efforts will drive future
growth and enhance shareholder value."
Conference Call Information
As previously announced, OCC will host a conference call today,
September 12, 2017, at 10:00 a.m. Eastern Time. Individuals
wishing to participate in the conference call should call (866)
610-1072 or (973) 935-2840 internationally, passcode
79987935. For interested individuals unable to join the call,
a replay will be available through September
19, 2017 by dialing (800) 585-8367 or (404) 537-3406,
passcode 79987935. The call will also be broadcast live over
the Internet and can be accessed by visiting the investor relations
section of the Company's website at www.occfiber.com.
Company Information
Optical Cable Corporation ("OCC®") is a leading
manufacturer of a comprehensive range of top-tier fiber optic and
copper communication cabling and connectivity products and
solutions—primarily for the enterprise market, various harsh
environment and specialty markets, and the wireless carrier
market.
OCC® is internationally recognized for pioneering
innovative fiber optic and copper communications technologies,
including fiber optic cable designs for the most demanding
environments and applications, copper connectivity designs to meet
the highest data communication industry standards, as well as a
broad product offering built on the evolution of these fundamental
technologies.
OCC uses its expertise to deliver cabling and connectivity
products and integrated solutions that are best suited to the
performance requirements of each end-user's application. And,
OCC's solutions offerings cover a broad range of applications—from
commercial, enterprise network, datacenter, residential and campus
installations to customized products for specialty applications and
harsh environments, including military, industrial, mining,
petrochemical and broadcast applications, as well as for the
wireless carrier market.
Founded in 1983, OCC is headquartered in Roanoke, Virginia with offices, manufacturing
and warehouse facilities located in Roanoke, Virginia, near Asheville, North Carolina and near
Dallas, Texas. OCC's
facilities are ISO 9001:2008 registered and OCC's Roanoke and Dallas facilities are MIL-STD-790G
certified.
Optical Cable Corporation™, OCC®,
Procyon®, Procyon Blade™, Superior Modular Products™,
SMP Data Communications™, Applied Optical Systems™, and associated
logos are trademarks of Optical Cable Corporation.
Further information about OCC® is available 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 known and unknown variables, uncertainties,
contingencies and risks that may cause actual events or results to
differ materially from our expectations, and such known and unknown
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. A
partial list of such variables, uncertainties, contingencies and
risks that could cause or contribute to such differences from our
expectations or that could otherwise adversely affect Optical Cable
Corporation and its subsidiaries is set forth in Optical Cable
Corporation's quarterly and annual reports filed with the
Securities and Exchange Commission ("SEC") under the heading
"Forward-Looking Information." OCC's quarterly and annual
reports are available to the public on the SEC's website at
http://www.sec.gov. In providing forward-looking information,
the Company expressly disclaims any obligation to update this
information, whether as a result of new information, future events
or otherwise except as required by applicable laws and
regulations.
(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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net sales
|
$
16,432
|
|
$
16,915
|
|
$
46,886
|
|
$
47,303
|
Cost of goods
sold
|
11,126
|
|
11,453
|
|
31,107
|
|
33,788
|
|
|
|
|
|
|
|
|
Gross
profit
|
5,306
|
|
5,462
|
|
15,779
|
|
13,515
|
|
|
|
|
|
|
|
|
SG&A
expenses
|
5,426
|
|
5,075
|
|
16,517
|
|
15,514
|
Royalty expense,
net
|
39
|
|
39
|
|
109
|
|
105
|
Amortization of
intangible assets
|
7
|
|
4
|
|
19
|
|
11
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(166)
|
|
344
|
|
(866)
|
|
(2,115)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(127)
|
|
(166)
|
|
(393)
|
|
(460)
|
Other, net
|
12
|
|
3
|
|
110
|
|
20
|
Other expense,
net
|
(115)
|
|
(163)
|
|
(283)
|
|
(440)
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(281)
|
|
181
|
|
(1,149)
|
|
(2,555)
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
14
|
|
(7)
|
|
1
|
|
7
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(295)
|
|
$
188
|
|
$
(1,150)
|
|
$
(2,562)
|
|
|
|
|
|
|
|
|
Net loss attributable
to
|
|
|
|
|
|
|
|
noncontrolling
interest
|
―
|
|
―
|
|
―
|
|
(22)
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to OCC
|
$
(295)
|
|
$
188
|
|
$
(1,150)
|
|
$
(2,540)
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to
OCC
|
|
|
|
|
|
|
|
per share: Basic and
diluted
|
$
(0.05)
|
|
$
0.03
|
|
$
(0.18)
|
|
$
(0.40)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic and diluted
|
6,490
|
|
7,115
|
|
6,539
|
|
6,403
|
OPTICAL CABLE
CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(thousands)
(unaudited)
|
|
|
|
|
|
|
July 31,
2017
|
|
October 31,
2016
|
Cash
|
$
529
|
|
$
1,879
|
Trade accounts
receivable, net
|
9,301
|
|
8,916
|
Inventories
|
18,355
|
|
15,024
|
Other current
assets
|
510
|
|
503
|
Total current
assets
|
28,695
|
|
26,322
|
Non-current
assets
|
13,394
|
|
14,344
|
Total assets
|
$
42,089
|
|
$
40,666
|
|
|
|
|
Current
liabilities
|
$
5,910
|
|
$
4,126
|
Non-current
liabilities
|
12,015
|
|
11,775
|
Total liabilities
|
17,925
|
|
15,901
|
Total shareholders'
equity
|
24,164
|
|
24,765
|
Total liabilities and
shareholders' equity
|
$
42,089
|
|
$
40,666
|
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.
8627
|
(212) 355-4449 ext.
8603
|
occ-jfwbk@joelefrank.com
|
occ-jfwbk@joelefrank.com
|
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SOURCE Optical Cable Corporation