Optical Cable Corporation Reports Fiscal Year And Fourth Quarter 2020 Financial Results
ROANOKE, Va., Dec. 21, 2020 /PRNewswire/ -- Optical Cable Corporation (Nasdaq GM: OCC) ("OCC®" or the "Company") today announced financial results for its fiscal year 2020 and its fourth quarter ended October 31, 2020.
Fiscal Year 2020 Financial Results
Consolidated net sales for fiscal year 2020 were
OCC reported gross profit of
The Company's gross profit margins tend to be higher when the Company achieves higher net sales levels, as certain fixed manufacturing costs are spread over higher sales. This operating leverage, which benefits OCC at higher sales levels, typically negatively impacts our gross profit margins, as fixed costs were spread over lower sales. Despite lower COVID-19 impacted sales, the Company's gross profit margins remained relatively steady in fiscal year 2020, and increased to
SG&A expenses decreased
OCC recorded a net loss of
Fourth Quarter 2020 Financial Results
Consolidated net sales were
Gross profit was
SG&A expenses decreased
For the fourth quarter of fiscal year 2020, OCC recorded a net loss of
Management's Comments
Neil Wilkin, President and Chief Executive Officer of OCC, said, "Faced with the significant and persistent headwinds we believe are a result of the COVID-19 pandemic, the OCC team demonstrated strength, dedication, flexibility and creative problem-solving. We took proactive and aggressive actions to mitigate the impact of the pandemic and position the business for future growth and success, implementing cost control initiatives and advancing new and existing strategic efforts to capture growth opportunities in our targeted markets. While 2020 was a challenging year, due to the actions we took to serve customers and protect the business, we believe OCC is positioned to build on its strong market positioning as business conditions normalize and the impact of the pandemic wanes."
Mr. Wilkin added, "I am thankful for the OCC team and their dedication and tireless efforts throughout this past year. It was their hard work and perseverance that enabled OCC to provide an uninterrupted supply of our mission-critical products and solutions to our customers and end-users, including our country's military and those on the front line against COVID-19, like healthcare facilities and hospitals, test centers and laboratories."
Mr. Wilkin concluded, "As we continue to manage through the pandemic and anticipate the return to normalcy on the horizon, we remain focused on operating as efficiently as possible, while providing exceptional service to our customers and positioning OCC to deliver long-term shareholder value."
Revolver Refinancing
As previously disclosed, during fiscal year 2020, OCC's Revolving Credit Note with Pinnacle Bank was terminated and, along with its wholly owned subsidiaries, OCC entered into a Loan and Security Agreement with North Mill Capital LLC ("North Mill"). As part of the refinancing transaction, OCC also entered into a Revolving Credit Master Promissory Note with North Mill that provides up to a maximum aggregate principal amount of
SBA PPP Loan
During fiscal year 2020, OCC closed on a
Overview of COVID-19 Effects
We believe the COVID-19 pandemic continues to have a significant negative impact on businesses and individuals in OCC's markets both in the United States and globally—particularly in certain specialty markets. Actions taken to limit the spread of the virus have resulted in an unprecedented disruption of normal activities as businesses have been forced to shut down or operate on a limited basis.
OCC is obligated and continues to operate during the COVID-19 pandemic because the Company's workforce is classified a "Defense Industrial Base Essential Critical Infrastructure Workforce" under guidelines from the U.S. Department of Defense and an "Essential Critical Infrastructure Workforce" under guidelines by the U.S. Department of Homeland Security, Cybersecurity and Infrastructure Security Agency (CISA). While continuing to operate, OCC's revenues, production volumes, and operations have been negatively impacted by the COVID-19 pandemic.
During the COVID-19 pandemic, the safety of OCC employees and their families, as well as safely manufacturing and supplying the critical and essential needs of OCC's customers, are of primary importance. The Company made a number of changes to business operations in response to the COVID-19 pandemic, including severely limiting business travel and face-to-face meetings, having a portion of its non-manufacturing employees work remotely, and implementing strict social distancing, symptom self-assessments and mask protocols within its facilities.
OCC continues to closely monitor the COVID-19 situation and will continue to take appropriate actions to protect the safety of OCC employees and their families, as well as the business.
Conference Call Information
As previously announced, OCC will host a conference call today, December 21, 2020, 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 4119027. For interested individuals unable to join the call, a replay will be available through Monday, December 28, 2020 by dialing (800) 585-8367 or (404) 537-3406, passcode 4119027. 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.
OPTICAL CABLE CORPORATION | |
5290 Concourse Drive | |
Roanoke, VA 24019 | |
(Nasdaq GM: OCC) | |
AT THE COMPANY: | |
Neil Wilkin | Tracy Smith |
Chairman, President & CEO | Senior Vice President & CFO |
(540) 265-0690 | (540) 265-0690 |
AT JOELE FRANK, WILKINSON BRIMMER KATCHER: | |
Andrew Siegel | Aaron Palash |
(212) 355-4449 ext. 8627 | (212) 355-4449 ext. 8603 |
(Financial Tables Follow)
OPTICAL CABLE CORPORATION | |||||||
Condensed CONSOLIDATED Statements OF OPERATIONS | |||||||
(thousands, except per share data) | |||||||
(unaudited) | |||||||
Three Months Ended | Fiscal Year Ended | ||||||
October 31, | October 31, | ||||||
2020 | 2019 | 2020 | 2019 | ||||
Net sales | $ 13,887 | $ 18,250 | $ 55,277 | $ 71,324 | |||
Cost of goods sold | 9,674 | 13,308 | 41,191 | 53,019 | |||
Gross profit | 4,213 | 4,942 | 14,086 | 18,305 | |||
SG&A expenses | 4,312 | 5,466 | 19,245 | 23,434 | |||
Royalty (income) expense, net | 123 | (5) | 332 | (6) | |||
Amortization of intangible assets | 11 | 10 | 42 | 39 | |||
Loss from operations | (233) | (529) | (5,533) | (5,162) | |||
Interest expense, net | (173) | (139) | (570) | (521) | |||
Other, net | 3 | 15 | ─ | 8 | |||
Other expense, net | (170) | (124) | (570) | (513) | |||
Loss before income taxes | (403) | (653) | (6,103) | (5,675) | |||
Income tax expense (benefit) | 3 | 4 | 18 | (6) | |||
Net loss | $ (406) | $ (657) | $ (6,121) | $ (5,669) | |||
Net loss per share: | |||||||
Basic and diluted | $ (0.06) | $ (0.09) | $ (0.83) | $ (0.77) | |||
Weighted average shares outstanding: | |||||||
Basic and diluted | 7,352 | 7,319 | 7,355 | 7,387 |
OPTICAL CABLE CORPORATION | |||
CONDENSED CONSOLIDATED BALANCE SHEET DATA | |||
(thousands) | |||
(unaudited) | |||
October 31, | October 31, | ||
2020 | 2019 | ||
Cash | $ 141 | $ 537 | |
Trade accounts receivable, net | 7,561 | 10,348 | |
Inventories | 17,100 | 18,096 | |
Other current assets | 521 | 399 | |
Total current assets | 25,323 | 29,380 | |
Non-current assets | 11,235 | 10,727 | |
Total assets | $ 36,558 | $ 40,107 | |
Current liabilities | $ 6,266 | $ 13,627 | |
Non-current liabilities | 15,032 | 5,241 | |
Total liabilities | 21,298 | 18,868 | |
Total shareholders' equity | 15,260 | 21,239 | |
Total liabilities and shareholders' equity | $ 36,558 | $ 40,107 |
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SOURCE Optical Cable Corporation