OCC® Achieves Year-over-Year
Increases in Net Sales and Gross Profit in the Second Quarter and
First Half of Fiscal Year 2022
ROANOKE, Va., June 13, 2022 /PRNewswire/ -- Optical Cable
Corporation (Nasdaq GM: OCC) ("OCC®" or the "Company")
today announced financial results for its second quarter ended
April 30, 2022.
Second Quarter 2022 Financial Results
Consolidated net sales for the second quarter of fiscal year
2022 increased 9.3% to $17.2 million,
compared to net sales of $15.7
million for the same period last year, with increased net
sales in the enterprise and specialty markets, including the
wireless carrier market.
Sequentially, consolidated net sales increased 19.1% for the
second quarter of fiscal year 2022, compared to net sales of
$14.4 million for the first quarter
of fiscal year 2022.
The Company's sales order backlog/forward load continues to be
at higher than typical levels and product demand is robust with
demand for OCC's products increasing during the second quarter of
fiscal year 2022.
Production volumes were tempered during the second quarter of
fiscal year 2022 by supply chain and labor constraints, impacting
net sales. The Company believes labor constraints are
beginning to show signs of easing in the third quarter of fiscal
year 2022.
Gross profit increased 4.4% to $5.0
million in the second quarter of fiscal year 2022, compared
to gross profit of $4.8 million for
the same period last year. Sequentially, gross profit increased
24.4% in the second quarter of fiscal year 2022, compared to gross
profit of $4.0 million for the first
quarter of fiscal year 2022.
Gross profit margin, or gross profit as a percentage of net
sales, was 29.3% in the second quarter of fiscal year 2022 compared
to 30.6% in the second quarter of fiscal year 2021. The
year-over-year decrease in gross profit margin was primarily due to
rapid inflation causing increases in costs of raw materials for
sales orders accepted prior to raw material cost
increases.
SG&A expenses increased to $5.0
million during the second quarter of fiscal year 2022,
compared to $4.6 million for the
second quarter of fiscal year 2021. The increase in SG&A
expenses was primarily the result of net increases in employee and
contracted sales personnel related costs.
For the second quarter of fiscal year 2022, OCC recorded a net
loss of $228,000, or $0.03 per basic and diluted share, compared to
net income of $3.4 million, or
$0.45 per basic and diluted share,
for the second quarter of fiscal year 2021.
Fiscal Year-to-Date 2022 Financial Results
Consolidated net sales for the first half of fiscal year 2022
increased 14.6% to $31.6 million,
compared to net sales of $27.6
million for the first half of fiscal year 2021. The Company
achieved increases in net sales in both its enterprise and
specialty markets, including the wireless carrier market, in the
first half of fiscal year 2022, compared to the same period last
year.
OCC reported gross profit of $9.1
million in the first half of fiscal year 2022, an increase
of 27.4% compared to gross profit of $7.1
million in the first half of fiscal year 2021.
Gross profit margin increased to 28.7% in the first half of
fiscal year 2022 compared to 25.8% for the same period in fiscal
year 2021. The Company's gross profit margins tend to be higher
when it achieves higher net sales levels due to its operating
leverage, as certain fixed manufacturing costs are spread over
higher sales. This operating leverage positively impacted the
Company's gross profit margin during the first half of fiscal year
2022, particularly during the first quarter of fiscal year
2022. This positive impact during the first quarter of fiscal
year 2022 was partially offset by the impact of increasing costs of
raw materials.
SG&A expenses increased 10.3% to $9.8
million during the first half of fiscal year 2022 from
$8.9 million for the first half of
fiscal year 2021. The increase in SG&A expenses during the
first half of fiscal year 2022 compared to the first half of fiscal
year 2021 was primarily the result of increases in employee and
contracted sales personnel related costs.
OCC recorded a net loss of $1.2
million, or $0.16 per basic
and diluted share, for the first half of fiscal year 2022, compared
to net income of $1.2 million, or
$0.17 per basic and diluted share,
for the first half of fiscal year 2021.
As of April 30, 2022, OCC had a
$2.2 million receivable for Employee
Retention Tax Credit ("ERTC") still to be refunded, which was
received by the Company in May
2022.
Management's Comments
Neil Wilkin, President and Chief
Executive Officer of OCC, said, "Our second quarter results reflect
the OCC team's continued execution in a dynamic market that is
experiencing pressures from inflation, labor shortages and supply
chain constraints. We are continuing to see robust demand for our
products as we execute our growth strategies and build on our
strong competitive position. We also continue to focus on
controlling expenses as supply chain and labor market constraints
that affected our results are starting to show signs of relenting.
Looking ahead to the second half of fiscal 2022, our team is
focused on driving growth in our targeted markets, providing
customers with our full suite of mission-critical cabling and
connectivity products and solutions, and operating efficiently as
we work to capture the opportunities ahead and deliver value to
shareholders."
Conference Call Information
As previously announced, OCC will host a conference call today,
June 13, 2022, at 10:00 a.m. Eastern Time. Individuals wishing to
participate in the conference call should call (800) 909-7113 in
the U.S. or (785) 424-1677 internationally, Conference ID: OCCQ222.
For interested individuals unable to join the call, a replay will
be available through Monday, June 20,
2022 by dialing (800) 839-5245 or (402) 220-2701. 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
April 30,
|
|
Six Months
Ended April 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net sales
|
$
17,200
|
|
$
15,741
|
|
$
31,641
|
|
$
27,618
|
Cost of goods
sold
|
12,167
|
|
10,922
|
|
22,562
|
|
20,489
|
|
|
|
|
|
|
|
|
Gross
profit
|
5,033
|
|
4,819
|
|
9,079
|
|
7,129
|
|
|
|
|
|
|
|
|
SG&A
expenses
|
5,036
|
|
4,589
|
|
9,816
|
|
8,898
|
Royalty (income)
expense, net
|
7
|
|
(43)
|
|
13
|
|
(50)
|
Amortization of
intangible assets
|
11
|
|
11
|
|
24
|
|
22
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(21)
|
|
262
|
|
(774)
|
|
(1,741)
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(182)
|
|
(181)
|
|
(341)
|
|
(355)
|
Other, net
|
(30)
|
|
3,311
|
|
(41)
|
|
3,314
|
Other income
(expense), net
|
(212)
|
|
3,130
|
|
(382)
|
|
2,959
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(233)
|
|
3,392
|
|
(1,156)
|
|
1,218
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
(5)
|
|
7
|
|
8
|
|
(26)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(228)
|
|
$
3,385
|
|
$
(1,164)
|
|
$
1,244
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic and diluted
|
$
(0.03)
|
|
$
0.45
|
|
$
(0.16)
|
|
$
0.17
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic and diluted
|
7,487
|
|
7,536
|
|
7,465
|
|
7,536
|
OPTICAL CABLE
CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(thousands)
(unaudited)
|
|
|
April
30, 2022
|
|
October 31,
2021
|
Cash
|
$
239
|
|
$
132
|
Trade accounts
receivable, net
|
10,552
|
|
8,376
|
Inventories
|
18,646
|
|
16,304
|
Other current
assets
|
2,632
|
|
2,754
|
Total current
assets
|
32,069
|
|
27,566
|
Non-current
assets
|
9,710
|
|
10,351
|
Total assets
|
$
41,779
|
|
$
37,917
|
|
|
|
|
Current
liabilities
|
$
8,430
|
|
$
6,168
|
Non-current
liabilities
|
12,174
|
|
9,543
|
Total liabilities
|
20,604
|
|
15,711
|
Total shareholders'
equity
|
21,175
|
|
22,206
|
Total liabilities and
shareholders' equity
|
$
41,779
|
|
$
37,917
|
|
|
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