Exhibit 99.2
OPTICAL CABLE CORPORATION
PRO FORMA CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
Presented below is the pro forma impact of the acquisition of SMP Data Communications on May 30, 2008 on the results of operations of Optical Cable Corporation for the year ended October 31, 2007 and for the six months ended April 30, 2008 as though the transaction was completed as of November 1, 2007 and 2006, respectively. The pro forma adjustments include the amortization of the fair market value adjustments to property and equipment, patents and other intangibles; the turn of inventory adjusted to fair value; and the estimated interest cost related to the transaction, all reduced by the estimated income tax benefits.
SMP Data Communications previously reported on a calendar year basis and its results of operations are included in the fiscal year pro forma information for its year ended December 31, 2007, combined with the results of operations of Optical Cable Corporation for its fiscal year ended October 31, 2007. Therefore, the results of SMP Data Communications for the two months ended December 31, 2007 are included in the pro forma results for both periods, and the results of SMP Data Communications for the two months ended December 31, 2006 are excluded from the pro forma results for the fiscal year ended October 31, 2007. Total sales and net income of SMP Data Communications for the two months ended December 31, 2007 totaled $3.4 million (unaudited) and $101,000 (unaudited), respectively.
The pro forma information for the six months ended April 30, 2008 includes the results of operations for SMP Data Communications for the six months ended April 30, 2008, combined with the results of operations of Optical Cable Corporation for the six months ended April 30, 2008.
Six months ended April 30, 2008
(in 000s, except per share data)
(unaudited)
| | | | | | | | | | | | | | |
| | | OCC | | SMP | | Pro Forma
Adjustments | | | Pro Forma
Combined | |
Net sales | | $ | 26,157 | | $ | 10,032 | | $ | — | | | $ | 36,189 | |
Gross profit | | | 11,077 | | | 2,595 | | | (371 | ) | | | 13,301 | |
SG&A expenses | | | 8,386 | | | 2,599 | | | — | | | | 10,985 | |
Royalty income, net | | | — | | | 612 | | | — | | | | 612 | |
Amortization of intangible assets | | | — | | | — | | | 539 | | | | 539 | |
Other income (expense), net | | | 53 | | | 18 | | | (287 | ) | | | (216 | ) |
Income taxes | | | 1,004 | | | 235 | | | (419 | ) | | | 820 | |
Net income | | | 1,740 | | | 391 | | | (777 | ) | | | 1,354 | |
Net income per share (basic and diluted) | | $ | 0.29 | | $ | — | | $ | — | | | $ | 0.22 | |
Year ended October 31, 2007
(in 000s, except per share data)
(unaudited)
| | | | | | | | | | | | | | |
| | | OCC | | SMP* | | Pro Forma
Adjustments | | | Pro Forma
Combined | |
Net sales | | $ | 45,503 | | $ | 21,552 | | $ | — | | | $ | 67,055 | |
Gross profit | | | 17,170 | | | 4,200 | | | (321 | ) | | | 21,049 | |
SG&A expenses | | | 15,300 | | | 5,479 | | | — | | | | 20,779 | |
Royalty income, net | | | — | | | 1,930 | | | — | | | | 1,930 | |
Amortization of intangible assets | | | — | | | — | | | 958 | | | | 958 | |
Other income (expense), net | | | 48 | | | 63 | | | (574 | ) | | | (463 | ) |
Income taxes | | | 665 | | | 276 | | | (666 | ) | | | 275 | |
Net income | | | 1,253 | | | 437 | | | (1,186 | ) | | | 504 | |
Net income per share (basic and diluted) | | $ | 0.21 | | $ | — | | $ | — | | | $ | 0.08 | |
| * | SMP amounts are for the twelve months ended December 31, 2007 |
