OPTICAL CABLE CORPORATION
5290 Concourse Drive
Roanoke, VA 24019
(NASDAQ: OCCF)
AT THE COMPANY: AT THE FINANCIAL RELATIONS
BOARD:
Robert Kopstein Ken Harber Michael Lawson - General Info.
Chairman & CEO VP of Finance Christine Mazurek - Analyst Info.
(540) 265-0690 (540) 265-0690 Deanne Eagle - Media Info.
[email protected] [email protected] (212) 661-8030
32% SALES GROWTH FUELS ACROSS-THE-BOARD GAINS
AT OPTICAL CABLE CORPORATION
Third Quarter Operating Income Up 36%, Net Income Up 26%
ROANOKE, Va., September 6, 2000 -- Optical Cable Corporation (Nasdaq: OCCF)
today announced double-digit sales, operating income, and net income growth for
the fiscal third quarter of 2000. The Company posted revenues of $16.7 million
for its fiscal third quarter ended July 31, 2000, a 32.1% increase from the same
period last year. Net income for the third quarter increased 25.9% to $2.3
million, up from $1.8 million for the third quarter of 1999.
The Company also announced that it will affect a three-for-two stock split
for shareholders of record on September 8, 2000, with an effective date of
September 29, 2000. Assuming completion of the split that will result in 56.709
million diluted shares outstanding, reported earnings per diluted share for the
third quarter of 2000 was $0.04, compared to $0.03 per diluted share for the
third quarter of 1999.
With three quarters of fiscal 2000 completed, Optical Cable Corp. is on
pace for a banner year. Revenues for the first nine months totaled $41.0
million, and trends are expected to continue enabling the Company to easily
surpass total 1999 annual revenues of $50.7 million. The Company pointed out
that its impressive third quarter gains affirm the strength of Optical Cable
Corp.'s core business, with operating income of $3.9 million, a 36.1% gain from
the same period last year. Management said the strong pace of growth has shown
no signs of abating, with record order input of $21 million for the last three
months, the highest in the Company's history. Monthly order input totals were:
June -- $6.7 million, July -- $6.4 million and August -- $7.9 million.
Commenting on the Company's strong financial performance, Robert Kopstein,
President and Chief Executive Officer, said "I think we'll continue to see
strong double-digit growth going forward. The demand for broadband, high-speed
Internet services is universal, and it's driving wholesale infrastructure
changes, especially for business customers looking for "last mile" solutions.
Businesses are eager to minimize any obstacle to speed and capacity, and are
beginning to understand the answer is end-to-end fiber."
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According to Mr. Kopstein, Optical Cable is particularly well-positioned to
capitalize on the growing demand for close-in, "last mile" fiber deployments.
"Our tight-buffer construction allows for long cable pulls through building and
up multi-floor risers," he said. "And, unlike gel-filled tube solutions, our
fiber optic cable meets building safety codes in regard to flammability."
Optical Cable Corp.'s flame retardant, indoor/outdoor cables are used for
optical fiber based systems within buildings, as well as connecting to long-
haul cable in an outdoor environment. Mr. Kopstein noted that industry experts
have forecasted demand for flame retardant cables to grow by more than 40% a
year, due largely to the increase in the number close-in fiber deployments. "The
trends bode very well for Optical Cable Corp.," said Mr. Kopstein. "As optical
fiber reaches closer to businesses and homes, I believe demand for our product
will grow even faster."
During the third quarter of 2000, Optical Cable Corp. negotiated several new
significant sales orders. The Company's fiber optic cable will be used to
automate the Panama Canal, requiring enough cable meters to traverse the Canal's
length several times. Mr. Kopstein said that authorities are updating the
Canal's communication infrastructure in an effort to achieve maximum traffic
efficiencies.
Additionally, in late July Optical Cable Corporation won a $1.5 million contract
with one of the country's largest discount, general merchandise retailers. The
contract comprises three million feet, or 600 miles, of fiber optic cable to be
installed in over 1,000 of the giant retailer's stores, streamlining electronic
links between various points-of-sale and a sophisticated, just-in-time,
inventory management system.
"Optical Cable was chosen as the sole supplier of fiber optic cable for this
project based on the clear mechanical superiority of our fiber optic cable,"
said Mr. Kopstein. "We conducted a number of product demonstrations for this
client, underscoring our fiber optic cable's unparalleled resistance to impact
and crush forces, as well as its overall tensile strength. Sometimes our cable
outperformed the competition by as much as ten fold."
Mr. Kopstein explained that such stress considerations are crucial for such
close-in, LAN-type deployments, since installation usually requires that cable
be pulled throughout a building's infrastructure and up multi-floor risers, all
without any signal degradation.
"This specific retailer was clearly focused on the robust performance of our
cable," said Mr. Kopstein, "and it has indicated it plans to continue fiber
optic deployment to all of its nearly 3,000 stores."
According to Mr. Kopstein, Optical Cable is particularly well-positioned to
capitalize on the growing demand for close-in fiber deployments. "Our tight
buffeted fiber optic cable technology is ideally suited for the ends of a
network, or the last mile," said Mr. Kopstein. "It addresses the needs of
private networks which often involve installations between and among buildings.
Installers and end-users know that our cable will not only survive harsh outdoor
environments and difficult installation processes, but it will also, for
instance, meet flammability requirements for use inside the buildings." Mr.
Kopstein believes that Optical Cable is becoming the cable of choice for the
private networks market, noting that it is currently the most stocked cable
among the country's top five cable distributors.
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Optical Cable's state-of-the-art production processes continues to deliver high
margin performance, with operating margins consistently above 20%. The operating
margin for the third quarter of fiscal 2000 was 23.6%, compared to 22.9% for the
same period in 1999. Gross margins increased to 45.5%, compared to 43.0% for
1999. Management attributed the slight increase to a changes sales mix and the
number of volume orders.
Selling, general, and administrative expenses rose slightly $3.6 million, or
21.9% of sales for the third quarter of 2000, compared to $2.5 million, or 20.1%
of sales for the third quarter of 1999. Management said the increase was due to
an increase in its sales force, as well as an expansion of marketing efforts
targeting both distributors and end users.
Optical Cable Corporation manufactures and markets a broad range of fiber optic
cables for "high bandwidth" transmission of data, video, and audio
communications over moderate distances. Optical Cable Corporation's cables can
be used both indoors and outdoors and utilize a tight-buffer coating process
that protects the optical fiber.
Note: This news release contains certain forward looking statements which
include statements regarding the Company's expectations for its financial result
as well as comments on its competitive positioning. Forward looking statements
are beyond the Company's ability to control and in many cases the Company cannot
predict what factors would cause actual results to differ materially from those
indicated by the forward looking statements. The Company's documents filed with
the Securities and Exchange Commission identify important factors which would
cause actual results to differ materially from those indicated by the forward
looking statements. These factors include statements about the Company's future
growth, level of sales to key customers, actions by competitors, fluctuations in
the price of raw materials, the Company's dependence on a single manufacturing
facility, ability to protect its proprietary manufacturing technology, a
dependence on a limited number of suppliers, technical changes and introductions
of new competing products, productivity, international operations, weather as
well as other factors.
NOTE: Further information on Optical Cable Corporation is available through our
website on the World Wide Web at http://www.occfiber.com.
To receive additional information on Optical Cable Corporation, via fax, at no
charge, dial 1-800- PRO-INFO and enter code OCCF.
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OPTICAL CABLE CORPORATION
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended Nine Months Ended
July 31, July 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales $16,651 $12,603 $41,026 $35,879
Cost of goods sold 9,075 7,179 22,335 20,022
------- ------- ------- -------
Gross profit 7,576 5,424 18,691 15,857
Selling, general and
admin. expenses 3,645 2,535 9,376 7,742
------- ------- ------- -------
Operating income 3,931 2,889 9,315 8,115
Other income, net (403) 10 1,514 94
------- ------- ------- -------
Net income before tax 3,528 2,899 10,829 8,209
======= ======= ======= =======
Income tax expense 1,241 1,082 3,812 2,981
------- ------- ------- -------
Net income $2,287 $1,817 $7,017 $5,228
======= ======= ======= =======
Net income per share
Basic $0.041 $0.032 $0.125 $0.092
Diluted $0.040 $0.032 $0.124 $0.092
======= ======= ======= =======
Weighted average shares
outstanding
Basic 56,357 56,610 56,282 56,610
Diluted 56,709 56,984 56,734 56,984
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BALANCE SHEET DATA
(In thousands)
July 31, July 31,
2000 1999
<S> <C> <C>
Current assets $34,758 $23,631
Total assets 46,199 34,531
Current liabilities 4,211 3,676
Long-term debt 0 0
Stockholders' equity 41,988 30,658
Total liabilities and stockholders' equity $46,199 $34,531
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