ROANOKE, Va., March 12, 2019 /PRNewswire/ -- Optical Cable
Corporation (Nasdaq GM: OCC) ("OCC®" or the "Company")
today announced financial results for its first quarter ended
January 31, 2019.
First Quarter 2019 Financial Results
Consolidated net sales were $16.8
million in the first quarter of fiscal year 2019, a decrease
of 4.6% when compared to net sales of $17.6
million in the first quarter of fiscal year 2018. The
Company's net sales in enterprise and specialty markets decreased
in the first quarter of fiscal year 2019, compared to the same
period last year. The net decrease in the specialty markets
reflects $1.2 million in net sales
related to a military project during the first quarter of last year
that did not recur this year. OCC's sales order backlog/forward
load was $10.0 million at the end of
the first quarter—higher than typically would be expected.
Gross profit was $3.6 million in
the first quarter of fiscal year 2019, compared to gross profit of
$5.2 million in the same period last
year. Gross profit margin, or gross profit as a percentage of
net sales, was 21.3% in the first quarter of fiscal year 2019
compared to 29.8% for the same period in fiscal year 2018.
OCC's net sales and gross profit during the first quarter of
fiscal year 2019 were impacted by initiatives intended to
ultimately increase production throughput and efficiency in order
to meet increased product demand over the short- and long-term.
These initiatives, which include the expansion, training, and
restructuring of the Company's manufacturing workforce, and certain
process changes, created throughput constraints and inefficiencies
in the Roanoke
facility—particularly increased labor related costs—in the first
quarter of fiscal 2019.
SG&A expenses were $6.8
million during the first quarter of fiscal year 2019, an
increase of 21.9% compared to $5.6
million for the first quarter of fiscal year 2018.
SG&A expenses as a percentage of net sales were 40.4% in the
first quarter of fiscal year 2019, compared to 31.7% during the
same period last year. The increase in SG&A expenses was
primarily the result of increases in employee related costs
totaling $1.1 million. The
largest increase in employee related costs was a result of
share-based compensation expense of $862,000 in the first quarter of fiscal year
2019, an increase of $749,000 in such
costs compared to the same period in fiscal year 2018, as a result
of previously granted long-term, performance-based equity grants
that vested on January 31,
2019.
For the first quarter of fiscal year 2019, OCC recorded a net
loss of $3.3 million, or $0.44 per basic and diluted share, compared to a
net loss of $410,000, or $0.06 per basic and diluted share, for the first
quarter of fiscal year 2018.
Management's Comments
Neil Wilkin, President and Chief
Executive Officer of OCC, said, "Demand for OCC's comprehensive
suite of innovative and integrated solutions continues to show
strength—particularly in a number of our specialty markets—and OCC
is taking actions to meet this increasing product demand. We are
working hard to quickly realize the ultimate benefits of
initiatives to increase manufacturing throughput and enhanced
operational efficiency."
Mr. Wilkin concluded, "We are excited about the opportunities we
see for 2019 and beyond. As we move forward, we are focused on
executing on our growth strategies and marketing initiatives in
targeted markets to meet the needs of our diverse customer base. We
are confident the actions we are taking will position OCC to
deliver enhanced value for shareholders."
Conference Call Information
As previously announced, OCC will host a conference call today,
March 12, 2019, at 10:00 a.m. Eastern Time. Individuals wishing to
participate in the conference call should call (866) 610-1072 in
the U.S. or (973) 935-2840 internationally, passcode 4580908. For
interested individuals unable to join the call, a replay will be
available through Tuesday, March 19,
2019 by dialing (800) 585-8367 or (404) 537-3406, passcode
4580908. 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 broad range of fiber optic and copper data
communication cabling and connectivity solutions primarily for the
enterprise market and various harsh environment and specialty
markets (collectively, the non-carrier markets) and also the
wireless carrier market, offering integrated suites of high quality
products which operate as a system solution or seamlessly integrate
with other providers' offerings.
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 9001:2015 registered and its Roanoke and Dallas facilities are MIL-STD-790G
certified.
Optical Cable Corporation™, OCC®,
Procyon®, 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
|
January
31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Net sales
|
$
16,751
|
|
$
17,551
|
|
Cost of goods
sold
|
13,188
|
|
12,322
|
|
|
|
|
|
|
Gross
profit
|
3,563
|
|
5,229
|
|
|
|
|
|
|
SG&A
expenses
|
6,774
|
|
5,558
|
|
Royalty (income)
expense, net
|
─
|
|
(5)
|
|
Amortization of
intangible assets
|
10
|
|
7
|
|
|
|
|
|
|
Loss from
operations
|
(3,221)
|
|
(331)
|
|
|
|
|
|
|
Interest expense,
net
|
(116)
|
|
(129)
|
|
Other, net
|
─
|
|
10
|
|
Other expense,
net
|
(116)
|
|
(119)
|
|
|
|
|
|
|
Loss before income
taxes
|
(3,337)
|
|
(450)
|
|
|
|
|
|
|
Income tax
benefit
|
27
|
|
40
|
|
|
|
|
|
|
Net loss
|
$
(3,310)
|
|
$
(410)
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
Basic and diluted
|
$
(0.44)
|
|
$
(0.06)
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
Basic and diluted
|
7,537
|
|
6,668
|
|
OPTICAL CABLE
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
|
(thousands)
|
(unaudited)
|
|
|
|
January
31,
|
|
October
31,
|
|
2019
|
|
2018
|
Cash
|
$
418
|
|
$
177
|
Trade accounts
receivable, net
|
9,851
|
|
12,833
|
Inventories
|
19,486
|
|
17,475
|
Other current
assets
|
518
|
|
562
|
Total current
assets
|
30,273
|
|
31,047
|
Non-current
assets
|
11,894
|
|
12,051
|
Total assets
|
$
42,167
|
|
$
43,098
|
|
|
|
|
Current
liabilities
|
$
7,711
|
|
$
7,028
|
Non-current
liabilities
|
10,961
|
|
9,259
|
Total liabilities
|
18,672
|
|
16,287
|
Total shareholders'
equity
|
23,495
|
|
26,811
|
Total liabilities and
shareholders' equity
|
$
42,167
|
|
$
43,098
|
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