Slide 1: Optical Cable Corporation Annual Meeting of Shareholders
Optical Cable Corporation (OCC®) Annual Meeting of Shareholders Neil Wilkin, President & CEO March 26, 2013 Green Ridge Recreation Center Roanoke, Virginia OCC
Slide 2: Forward Looking Information
Forward Looking Information This presentation may contain “forward looking statements” that involve risks and uncertainties. These statements reflect management’s current expectations about possible future events and performance. Actual future results may differ materially due to a number of factors
Slide 3: Agenda
Agenda • Accomplishments during fiscal 2012 • Strategic Vision and Market Agility • Creating and Increasing Shareholder Value • Looking Forward to fiscal 2013 • New at OCC! • Q&A OCC
Slide 4: Accomplishments during Fiscal 2012
Accomplishments during Fiscal 2012 OCC
Slide 5: FY 2012 Financial Accomplishments
FY 2012 Financial Accomplishments • Outstanding Growth and Results Achieved in fiscal 2012 – Despite industry and macroeconomic challenges • Record High Net Sales – 3rd year in a row! • Net Sales UP 13.9% to $83.5 million OCC
Slide 6: FY 2012 Financial Accomplishments (cont'd)
FY 2012 Financial Accomplishments (cont’d) • Increased Gross Profit 20.0% to $31.6 million, with gross profit margin of 37.8% • Increased Profitability with EPS of 43 cents—almost 4 times EPS from FY 2011
Slide 7: FY 2012 Financial Accomplishments (cont'd)
FY 2012 Financial Accomplishments (cont’d) • Strong Operating Cash Flow of $2.0 million – Continuing track record of generating annual positive operating cash flow since 2001 (excluding $58,000 used in 2006) • Increased Cash Dividends – Declared quarterly cash dividends of 6 cents per share in fisca
Slide 8: FY 2012 Financial Accomplishments (cont'd)
FY 2012 Financial Accomplishments (cont’d) • Increased Capital Returned to Shareholders through Share Repurchases – Returned $1.2 million to shareholders by purchasing and retiring 267,000 shares
Slide 9: Our Accomplishments Benefited Shareholders
Our Accomplishments Benefited Shareholders • OCC shareholders earned a 17.5% return on OCC common stock during fiscal year 2012 – Stock appreciation plus dividends paid (October 31, 2011 to October 31, 2012) • OCC’s return outpaced the Russell 2000® index, the S&P 500 index, and the Dow Jones Indust
Slide 10: Strategic Vision and Market Agility
Strategic Vision and Market Agility
Slide 11: Strategic Vision and Market Agility
Strategic Vision and Market Agility • Success in fiscal 2012 was not a result of a single year’s efforts • Our results in fiscal 2012 were made possible by OCC’s Strategic Vision and Market Agility OCC
Slide 12: Strategic Vision and Market Agility (cont'd)
Strategic Vision and Market Agility (cont’d) • Continued Execution of Strategy in fiscal 2012 – Focus on providing customer solutions – Product innovation – Product line expansion • Exceptional Market Agility – sales, business development and engineering teams identifying new customers and opportuni
Slide 13: Strategic Vision and Market Agility
Strategic Vision and Market Agility • Success in future will be based on momentum from multi-year efforts and continued successful execution of OCC’s strategies OCC
Slide 14: Creating and Increasing Shareholder Value
Creating and Increasing Shareholder Value OCC
Slide 15: Creating and Increasing Shareholder Value
Creating and Increasing Shareholder Value • 17.5% Total Shareholder Return during fiscal 2012 • OCC Return Beating Major Indexes during fiscal 2012, and favorably competing through current month and over longer periods OCC
Slide 16: Comparison of Total Shareholder Return of OCC, Russell 2000, DJIA, S&P 500
Comparison of Total Shareholder Return of OCC, Russell 2000 Index, DJIA, and S&P 500 1, 3 & 5 Year as of October 31, 2012 TSR 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% 1 Year 3 Year 5 Year OCC Russell DJIA S&P 500
Slide 17: Comparison of Cumulative Return of OCC, Nov 2010 to Oct 2012
Comparison of Cumulative Return of OCC, Russell 2000 Index, DJIA, and S&P 500 November 1, 2010 to October 31, 2012 (Assumes Initial Investment of $100, including OCC dividends) OCC Russell DJIA S&P 500 Value ($) 210.00 190.00 170.00 150.00 130.00 110.00 90.00 70.00 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11
Slide 18: Comparison of Cumulative Return of OCC, Oct 2002 - Mar 2013
Comparison of Cumulative Return of OCC, Russell 2000 Index, DJIA, and S&P 500 October 31, 2002 - March 15, 2013 (Assumes Initial Investment of $100, including OCC dividends) Value ($) $450.00 $400.00 $350.00 $300.00 $250.00 $200.00 $150.00 $100.00 $50.00 $- Russell OCC DJIA S&P 500 Oct-02 Jan-03 Apr
Slide 19: Increasing Regular Dividends
Increasing Regular Dividends • Cash Dividends to Shareholders — 6 cents per share declared in FY 2012, $831,000 declared and paid to shareholders since dividend initiated in October 2010 • Increased Dividend 33% — Board increased dividend in December 2012 with implied annual rate of 8 cents per shar
Slide 20: Annual Dividend Rate per Share
Annual Dividend Rate per Share FY 2011 – FY (2013 is Implied Annual Rate) Rate in $ 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 2011 2012 2013
Slide 21: Total Dividends Declared
Total Dividends Declared FY 2010 – FY 2012 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- 2010 2011 2012
Slide 22: Repurchasing and Retiring Shares
Repurchasing and Retiring Shares • During fiscal 2012, completed plan to purchase and retire 200,000 shares AND initiated new plan to acquire 320,000 shares • OCC has 123,500 shares remaining to be repurchased and retired under the new plan
Slide 23: Shares Repurchased
Shares Repurchased FY 2009- FY 2012 Quantity of Shares Repurchased 300,000 250,000 200,000 150,000 100,000 50,000 0 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Total Cost of Repurchases (including brokerage fees) Quantity Total Cost
Slide 24: Value Relative to Share Price
Value Relative to Share Price • OCC Shares Trading (as of Monday’s Close) at a 17.5% discount to Net Book Value per share – $4.86 per share NBV at January 31, 2013 (NBV attributable to OCC) • OCC Shares Trading at a 4.3% discount to Net Working Capital per share – $4.19 per share NWC at January 31,
Slide 25: Looking Forward to 2013
Looking Forward to 2013
Slide 26: Q1 2013 Results
Q1 2013 Results • Net Sales of $17.3 million – Same as Q1 2012 – 23.4% increase in International – 9.1% decrease in USA • Gross profit increased 6.1% to $6.5 million (compared to Q1 2012) • EPS of 2 cents per share (compared to 3 cents per share in Q1 2012)
Slide 27: Looking Forward to 2013
Looking Forward to 2013 • Quarterly Results Can Be Volatile • Best measure of OCC’s Success and Performance – Annual Results
Slide 28: Looking Forward to 2013
Looking Forward to 2013 • OCC benefits from diversification – Markets – Customers – Geographic – Technology
Slide 29: Consolidated Net Sales by Quarter (FY 2010 through FY 2012)
Consolidated Net Sales—by Quarter (FY 2010 through FY 2012) (in thousands $) $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $17,713 $15,007 $17,334 $17,184 $15,256 $22,051 $22,004 $18,779 $18,775 $22,134 $19,667 $18,464 Quarter 2010 2011 2012
Slide 30: Fiscal 2013 and Beyond
Fiscal 2013 and Beyond • OCC’s significant Operating Leverage disproportionately increases bottom line results as we grow sales • Execute existing strategy designed to grow sales, including product innovations and new product development • Improve efficiencies and control costs
Slide 31: New at OCC
New at OCC®
Slide 32: New at OCC: MARS Accessories
New at OCC MARS Accessories
Slide 33: New at OCC: MARS Cartridge System
New at OCC MARS Cartridge System
Slide 34: New at OCC: Procyon Fiber and Copper Solutions
New at OCC Procyon™ – Fiber and Copper Solutions
Slide 35: New at OCC: HC-Series Cable
New at OCC HC-Series Cable OCC -—s om
Slide 36: New at OCC: MHC II Connector Family
New at OCC MHC™ II Connector Family
Slide 37: New at OCC: AutoDesk BIM Models
New at OCC AutoDesk Building Information Modeling (BIM) Models BIM CONTENT OCC adds Building Information Modeling (BIM) to our portfolio of design tools Being a premier manufacturer of innovative cabling and connectivity products, OCC is pleased to announce the addition of Building Information Model
Slide 38: New at OCC: Online customer tools
New at OCC Online customer tools • Division 27 Specification Builder • Part Number Configurator • Application Illustrations DIVISION 27 SPEC BUILDER OCC adds another feature to our online portfolio of sales tools Writing project specifications can often times be one of the most monotonous, mind-numb
Slide 39: Questions
Questions
Slide 40: Optical Cable Corporation Annual Meeting of Shareholders
Optical Cable Corporation (OCC®) Annual Meeting of Shareholders Neil Wilkin, President & CEO March 26, 2013 Green Ridge Recreation Center Roanoke, Virginia