Exhibit 99.1
| | |
 | | OPTICAL CABLE CORPORATION |
| | 5290 Concourse Drive |
| | Roanoke, VA 24019 |
| | (Nasdaq GM: OCCF) |
| | www.occfiber.com |
| | | | |
| AT THE COMPANY: | | | | |
| | |
| Neil Wilkin | | Tracy Smith | | |
| President & CEO | | Vice President & CFO | | |
| (540) 265-0690 | | (540) 265-0690 | | |
| investorrelations@occfiber.com | | investorrelations@occfiber.com | | |
| | | | |
| AT JOELE FRANK, WILKINSON BRIMMER KATCHER: | | |
| | |
| Andrew Siegel | | Jaime Wert | | |
| (212) 355-4449 ext. 127 | | (212) 355-4449 ext. 173 | | |
| asiegel@joelefrank.com | | jwert@joelefrank.com | | |
FOR IMMEDIATE RELEASE
OPTICAL CABLE CORPORATION REPORTS
FISCAL FOURTH QUARTER 2007 FINANCIAL RESULTS
Net Sales, Gross Profit Margins and Net Income all Increased
in Fourth Quarter and Fiscal 2007
ROANOKE, VA, January 28, 2008 —Optical Cable Corporation (Nasdaq GM: OCCF) today announced financial results for its fourth quarter and its fiscal year ended October 31, 2007.
The Company reported increases in net sales, gross profit margins and net income for both the fourth quarter and fiscal year as compared to results in the prior year.
Fourth Quarter 2007 Financial Results
Optical Cable reported net income of $810,000, or $0.13 per basic and diluted share, for its fourth quarter of fiscal 2007, an increase of 7.8% compared to net income of $751,000, or $0.13 per basic and diluted share, for the same period last year.
Net sales for the fourth quarter of fiscal 2007 increased 6.0% to $13.4 million compared to net sales of $12.6 million for the comparable period last year. Sequentially, net sales for the fourth quarter of fiscal 2007 increased 14.6% compared to net sales of $11.7 million for the third quarter of fiscal 2007. The Company’s net sales growth during the fourth quarter was achieved over a broad customer base and product mix, with increases in the Company’s specialty markets.
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Gross profits increased 14.2% to $5.4 million in the fourth quarter of fiscal 2007, up from $4.7 million in the fourth quarter of fiscal 2006. Gross profit as a percentage of net sales (or “gross profit margin”) for the fourth quarter of fiscal 2007 increased to 40.5% compared to 37.6% for the fourth quarter of fiscal 2006.
Selling, general and administrative expenses (“SG&A expenses”) for the fourth quarter of fiscal 2007 increased 15.4% to $4.3 million from $3.7 million for the comparable period last year. SG&A expenses as a percentage of net sales were 31.7% in the fourth quarter of fiscal 2007 compared to 29.2% in the fourth quarter of fiscal 2006.
Fiscal Year 2007 Financial Results
Optical Cable’s net income for its fiscal year ended October 31, 2007 increased substantially compared to the prior year. The Company reported net income of $1.3 million, or $0.21 per basic and diluted share, for fiscal year 2007, compared to net income of $351,000, or $0.06 per basic and diluted share, for fiscal year 2006.
Total net sales for fiscal year 2007 increased to $45.5 million compared to net sales of $45.3 million in the prior year. The Company’s net sales outside the U.S. increased 22.7% to $12.9 million in fiscal year 2007, compared to $10.5 million in fiscal year 2006. Optical Cable also recorded increased sales in its specialty markets in both the U.S. and outside the U.S.
Gross profits increased 11.3% to $17.2 million in fiscal year 2007, up from $15.4 million in fiscal year 2006. Gross profit margin increased to 37.7% for fiscal year 2007 compared to 34.0% in fiscal year 2006, as the Company’s manufacturing lead times decreased and its manufacturing efficiencies increased. The Company believes that the benefits of the investments made in its systems, processes and facilities are being realized and that its enhanced profitability is in part due to the successful implementation of its new ERP system.
SG&A expenses increased 2.7% to $15.3 million in fiscal year 2007 compared to $14.9 million in fiscal year 2006. SG&A expenses as a percentage of net sales increased to 33.6% in fiscal year 2007 compared to 32.9% in fiscal year 2006.
Management’s Comments
Mr. Neil Wilkin, President and CEO of Optical Cable Corporation, stated “We are pleased to report increases in net sales, gross profit margins and net income not only for the fourth quarter, but also for fiscal year 2007. After a slow first quarter, we improved performance in the second, third and fourth quarters of fiscal year 2007, finishing the year with strong financial results. During fiscal 2007 the Optical Cable team clearly demonstrated its ability to leverage investments in facilities, processes, systems, and personnel to deliver growing financial performance. We look forward to building on our success in fiscal 2008 and to creating meaningful value for all Optical Cable shareholders.”
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Conference Call and Webcast
Optical Cable will host its quarterly conference call on Monday, January 28, 2008 at 11:00 a.m. Eastern Time.
Individuals wishing to participate in the conference call should call (888) 868-9083. For interested individuals unable to join the call, a replay will be available through February 4, 2008 by dialing (800) 642-1687, pass code 32242041. 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.
As in the past, Optical Cable Corporation will answer questions from analysts and fund investors during the conference call. However, Optical Cable Corporation also invites individual investors to submit questions in advance of the conference call. Questions should be submitted in writing to jwert@joelefrank.com by 10:00 a.m. Eastern Time on Monday, January 28, 2008.
Company Information
Optical Cable Corporation is a leading manufacturer of fiber optic cables primarily sold into the enterprise market, and the premier manufacturer of military ground tactical fiber optic cables for the U.S. military. Founded in 1983, Optical Cable Corporation pioneered the design and production of fiber optic cables for the most demanding military field applications, as well as fiber optic cables suitable for both indoor and outdoor use. The Company’s current broad product offering is built on the evolution of these fundamental technologies, and is designed to provide end-users with fiber optic cables that are easy and economical to install, provide a high degree of reliability and offer outstanding performance characteristics. Optical Cable Corporation sells its products worldwide for uses ranging from commercial and campus installations to customized products for specialty applications and harsh environments, including military applications. The Company manufactures its high quality fiber optic cables at its ISO 9001:2000 registered and MIL-STD-790F certified facility located in Roanoke, Virginia.
Further information about Optical Cable Corporation is available on the World Wide Web atwww.occfiber.com.
FORWARD-LOOKING INFORMATION
This news release by Optical Cable Corporation (the “Company”) 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 forward-looking information is subject to risks and uncertainties that may cause actual events to differ materially from the Company’s expectations. Factors that could cause or contribute to such differences 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;
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corporate and/or government spending on information technology; actions by competitors; fluctuations in the price of raw materials (including optical fiber); the Company’s dependence on a single manufacturing facility; the Company’s ability to protect its proprietary manufacturing technology; market conditions influencing prices or pricing; the Company’s dependence on a limited number of suppliers; 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; further adverse changes in laws and regulations associated with the extraterritorial income exclusion; 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 of competing technologies, including copper cable and wireless, relative to fiber optic cable; economic conditions that affect the telecommunications sector, certain technology sectors or the economy as a whole; terrorist attacks or acts of war, and any 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 Company’s ability to successfully implement planned changes to its information technology systems and manufacturing processes; 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 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; impact of future consolidation among competitors and/or among customers adversely affecting the Company’s position with its customers and/or our market position; actions by customers adversely affecting the Company in reaction to the expansion of the Company’s 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, and/or making investments in or with, 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 acquisition of the Company by another company; the additional costs of considering and possibly defending the Company’s position on such unsolicited proposals regarding the acquisition of us by another company; 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 and the Company incorporates by reference those factors included in current reports on Form 8-K.
(Financial Tables Follow)
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OPTICAL CABLE CORPORATION
CONDENSED STATEMENTS OF INCOME
(thousands, except per share data)
(unaudited)
| | | | | | | | | | | | | | |
| | | Three Months Ended
October 31, | | | Fiscal Year Ended
October 31, | |
| | | 2007 | | 2006 | | | 2007 | | 2006 | |
Net sales | | $ | 13,399 | | $ | 12,641 | | | $ | 45,503 | | $ | 45,330 | |
Cost of goods sold | | | 7,976 | | | 7,893 | | | | 28,333 | | | 29,908 | |
| | | | | | | | | | | | | | |
Gross profit | | | 5,423 | | | 4,748 | | | | 17,170 | | | 15,422 | |
SG&A expenses | | | 4,254 | | | 3,686 | | | | 15,300 | | | 14,900 | |
| | | | | | | | | | | | | | |
Income from operations | | | 1,169 | | | 1,062 | | | | 1,870 | | | 522 | |
Interest income (expense), net | | | 19 | | | (11 | ) | | | 21 | | | (10 | ) |
Other, net | | | 25 | | | (3 | ) | | | 27 | | | (9 | ) |
| | | | | | | | | | | | | | |
Other income (expense), net | | | 44 | | | (14 | ) | | | 48 | | | (19 | ) |
| | | | | | | | | | | | | | |
Income before income taxes | | | 1,213 | | | 1,048 | | | | 1,918 | | | 503 | |
Income tax expense | | | 403 | | | 297 | | | | 665 | | | 152 | |
| | | | | | | | | | | | | | |
Net income | | $ | 810 | | $ | 751 | | | $ | 1,253 | | $ | 351 | |
| | | | | | | | | | | | | | |
Net income per share: | | | | | | | | | | | | | | |
Basic and diluted | | $ | 0.13 | | $ | 0.13 | | | $ | 0.21 | | $ | 0.06 | |
| | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | |
Basic | | | 6,087 | | | 6,011 | | | | 6,089 | | | 5,954 | |
| | | | | | | | | | | | | | |
Diluted | | | 6,087 | | | 6,014 | | | | 6,096 | | | 5,966 | |
| | | | | | | | | | | | | | |
—MORE—
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OPTICAL CABLE CORPORATION
CONDENSED BALANCE SHEET DATA
(thousands)
(unaudited)
| | | | | | |
| | | October 31,
2007 | | October 31,
2006 |
Cash | | $ | 3,139 | | $ | 555 |
Trade accounts receivable, net | | | 9,057 | | | 8,297 |
Inventories | | | 7,340 | | | 8,615 |
Other current assets | | | 1,279 | | | 1,280 |
| | | | | | |
Total current assets | | $ | 20,815 | | $ | 18,747 |
Non-current assets | | | 16,466 | | | 16,044 |
| | | | | | |
Total assets | | $ | 37,281 | | $ | 34,791 |
| | | | | | |
Current liabilities | | $ | 4,878 | | $ | 4,306 |
Non-current liabilities | | | 425 | | | 50 |
| | | | | | |
Total liabilities | | $ | 5,303 | | $ | 4,356 |
Total shareholders’ equity | | | 31,978 | | | 30,435 |
| | | | | | |
Total liabilities and shareholders’ equity | | $ | 37,281 | | $ | 34,791 |
| | | | | | |
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