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Optical Cable Corp. (OCCF) Initiates Quarterly Cash Dividend, Reduces Credit Balance

On October 21st, Optical Cable Corporation announced that it is initiating a quarterly cash dividend to shareholders. This is the first time in the company’s history. The Board of Directors declared a dividend of $0.01 per share on its stock, which was decided in a meeting on October 15th of this year, payable to shareholders on December 15th.

Further quarterly dividends would be expected to be paid out in March, June, September and December of each proceeding year, and the dividend announced on the 21st implies an annual cash dividend rate of $0.04 per share.

Optical Cable also announced that it has reduced the balance on its revolving credit facility to $700,000, down by $412,000 since the end of the third quarter of this fiscal year. Optical Cable now has available $5.3 million in credit on its $6 million facility. The company has achieved $18.8 million in sales and reported earnings per share of $0.09 during the third quarter of 2010, and generated $1.4 million in net cash during that quarter.

At the end of the third fiscal quarter, Optical Cable reported a retained earnings balance of $20.7 million ($3.21 per share), and a net book value of $26.6 million ($4.12 per share). On the 20th, Optical Cable’s share price closed at $2.70.

Neil Wilkin, Chairman, President and Chief Executive Officer of OCC, said “We are pleased to announce the initiation of a quarterly cash dividend, which will provide for the regular return of capital to our shareholders. At the same time, we have also reduced OCC’s outstanding debt. These actions reflect the operating leverage in our business model, our ability to generate solid cash flow, and our commitment to maintaining a strong balance sheet. In addition, the dividend initiation and debt reduction demonstrate our confidence in OCC’s strategy and market position, and prospects for continued growth and value creation.”

Mr. Wilkin added, “We continue to realize the benefits of the acquisitions we completed in 2008 and 2009, which were critical strategic moves that positioned OCC for sustainable long-term success in our markets. We are pleased that our shareholders are now enjoying the benefits of these acquisitions. We look forward to building on OCC’s strong momentum to create further value while continuing to meet and exceed the needs of our customers.”

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