Optical Cable Corporation Reports Fourth Quarter and Fiscal Year 2009 Financial Results

Monday, Feb 01, 2010

ROANOKE, Va., Jan. 29 /PRNewswire-FirstCall/ -- Optical Cable Corporation (NASDAQ:OCCF) ("OCC") today announced financial results for its fiscal year and fourth quarter ended October 31, 2009.

Fiscal Year 2009 Financial Results

OCC's consolidated net sales for fiscal year 2009 decreased 4.0% to $58.6 million from $61.0 million for fiscal year 2008. The Company believes that the decline in net sales is primarily attributable to the global economic recession. The sale of enterprise connectivity products, which were consolidated for the full year, added $13.0 million to OCC's consolidated net sales during fiscal year 2009. These products, which were consolidated for only five months during fiscal year 2008 after the May 30, 2008 acquisition of SMP Data Communications, added $8.0 million to OCC's consolidated net sales during fiscal year 2008.

Gross profit decreased 17.9% to $19.8 million for fiscal year 2009, compared to $24.2 million for fiscal year 2008. Gross profit as a percentage of net sales (or gross profit margin) for fiscal year 2009 decreased to 33.9% compared to 39.6% for fiscal year 2008, largely due to lower gross profit margins for enterprise connectivity products.

OCC recorded a net loss of $1.9 million, or $0.34 per basic and diluted share, for fiscal year 2009, compared to net income of $2.2 million, or $0.36 per basic and diluted share, for fiscal year 2008.

Contributing to the net loss during fiscal year 2009 were non-cash, non-recurring special charges. The Company recorded a charge of $344,000 to write-off certain intangible assets associated with the acquisition of SMP Data Communications and pre-tax losses of $1.6 million associated with the SG&A expenses of a start-up business in which OCC acquired a controlling interest on August 1, 2008.

Fourth Quarter 2009 Financial Results

Consolidated net sales for the fourth quarter of fiscal year 2009 decreased 23.6% to $14.1 million compared to net sales of $18.4 million for the comparable period last year. The sale of enterprise connectivity products added $3.3 million and $4.7 million to OCC's consolidated net sales during the fourth quarters of fiscal years 2009 and 2008, respectively.

Gross profit decreased 29.6% to $4.8 million in the fourth quarter of fiscal year 2009 compared to $6.9 million in the fourth quarter of 2008. Gross profit as a percentage of net sales (or gross profit margin) for the fourth quarter of fiscal year 2009 decreased to 34.4% compared to 37.4% for the fourth quarter of fiscal 2008, as manufacturing costs were spread over lower volumes and as the lower gross profit margins associated with the enterprise connectivity products historically sold by SMP Data Communications contributed a dilutive gross profit margin effect for a full twelve months versus only five months in fiscal year 2008.

OCC recorded a net loss of $90,000, or $0.01 per basic and diluted share, for the fourth quarter of fiscal 2009, compared to a net loss of $10,000, or no earnings per basic and diluted share, for the same period last year.

Contributing to the net loss during the quarter were non-cash, non-recurring special charges. The Company recorded a charge of $153,000 to write-off certain intangible assets associated with the acquisition of SMP Data Communication and pre-tax losses of $446,000 related to the start-up business in which OCC acquired a controlling interest on August 1, 2008.

The Company's results in the fourth quarter of 2009 were positively impacted by cost reduction initiatives. During fiscal year 2009, among other actions to curtail expenses, OCC reduced headcount by approximately 10% and negotiated new shipping contracts.

Management's Comments

Neil Wilkin, President and Chief Executive Officer of OCC, said "OCC finished fiscal year 2009 with positive cash flow from operations, positive EBITDA (earnings before interest, taxes, depreciation and amortization), and a strong balance sheet, all despite the severe economic recession impacting our industry. In light of the significant revenue declines that our industry experienced in 2009, OCC performed well relative to many competitors. Importantly, we also achieved improved operating results in our fourth quarter as compared to our third quarter of 2009, as OCC began to realize the benefit of cost reduction initiatives implemented earlier in the year."

"Fiscal 2009 was challenging for our company, our industry, and the global economy, but we have taken the right steps to strategically position OCC for long-term success in our markets. We are confident that by continuing to execute on our strategic plan and by completing the integration of our recent acquisitions, we can deliver improved shareholder value," stated Mr. Wilkin.

Company Information

Optical Cable Corporation 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 high quality fiber optic cables at its Roanoke facility which is ISO 9001:2008 registered and MIL-STD-790F certified, its high quality enterprise connectivity products at its Asheville facility which is ISO 9001:2008 registered, and its high quality military and harsh environment connectivity products and systems at its Dallas facility which is 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.

Source: PR Newswire