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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Virginia
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54-1237042
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large Accelerated Filer
¨
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Non-accelerated Filer
¨
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Smaller Reporting Company
x
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Accelerated Filer
¨
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Page
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PART I.
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FINANCIAL INFORMATION
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Item 1.
|
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Condensed Consolidated Balance Sheets
—January 31, 2014 and October 31, 2013
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Condensed Consolidated Statements of
Operations—Three Months Ended January 31, 2014 and 2013
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Condensed Consolidated Statement of Shareholders’ Equity
—Three Months Ended January 31, 2014
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Condensed Consolidated Statements of Cash Flows
—Three Months Ended January 31, 2014 and 2013
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Item 2.
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||
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Item 4.
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PART II.
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Item 2.
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||
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Item 5.
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Other Information
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Item 6.
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||
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Assets
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January 31,
2014 |
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October 31,
2013 |
||||
Current assets:
|
|
|
|
|
||||
Cash
|
|
$
|
726,562
|
|
|
$
|
750,303
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $66,818 at January 31, 2014 and $74,073 at October 31, 2013
|
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8,705,466
|
|
|
9,951,970
|
|
||
Other receivables
|
|
140,930
|
|
|
225,016
|
|
||
Income taxes refundable
|
|
886,247
|
|
|
590,569
|
|
||
Inventories
|
|
19,212,037
|
|
|
18,234,279
|
|
||
Prepaid expenses
|
|
533,346
|
|
|
331,141
|
|
||
Deferred income taxes – current
|
|
1,708,632
|
|
|
1,726,695
|
|
||
Total current assets
|
|
31,913,220
|
|
|
31,809,973
|
|
||
Property and equipment, net
|
|
12,656,107
|
|
|
12,827,198
|
|
||
Intangible assets, net
|
|
352,607
|
|
|
340,807
|
|
||
Deferred income taxes – noncurrent
|
|
149,955
|
|
|
161,063
|
|
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Other assets, net
|
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237,956
|
|
|
275,858
|
|
||
Total assets
|
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$
|
45,309,845
|
|
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$
|
45,414,899
|
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Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current installments of long-term debt
|
|
$
|
261,447
|
|
|
$
|
258,628
|
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Accounts payable and accrued expenses
|
|
4,105,651
|
|
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3,267,812
|
|
||
Accrued compensation and payroll taxes
|
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1,415,275
|
|
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1,297,591
|
|
||
Total current liabilities
|
|
5,782,373
|
|
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4,824,031
|
|
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Note payable to bank
|
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2,000,000
|
|
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2,500,000
|
|
||
Long-term debt, excluding current installments
|
|
7,431,288
|
|
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7,497,042
|
|
||
Deferred income taxes - noncurrent
|
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90,353
|
|
|
83,158
|
|
||
Other noncurrent liabilities
|
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883,506
|
|
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950,952
|
|
||
Total liabilities
|
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16,187,520
|
|
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15,855,183
|
|
||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred stock, no par value, authorized 1,000,000 shares; none issued and outstanding
|
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—
|
|
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—
|
|
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Common stock, no par value, authorized 50,000,000 shares; issued and outstanding 6,547,871 shares at January 31, 2014 and 6,570,734 at October 31, 2013
|
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8,816,869
|
|
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8,679,435
|
|
||
Retained earnings
|
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20,975,949
|
|
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21,519,238
|
|
||
Total shareholders’ equity attributable to Optical Cable Corporation
|
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29,792,818
|
|
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30,198,673
|
|
||
Noncontrolling interest
|
|
(670,493
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)
|
|
(638,957
|
)
|
||
Total shareholders’ equity
|
|
29,122,325
|
|
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29,559,716
|
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||
Commitments and contingencies
|
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
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$
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45,309,845
|
|
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$
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45,414,899
|
|
|
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Three Months Ended
|
||||||
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|
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January 31,
|
||||||
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2014
|
|
2013
|
||||
Net sales
|
|
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$
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16,534,930
|
|
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$
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17,295,453
|
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Cost of goods sold
|
|
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11,127,268
|
|
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10,771,514
|
|
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Gross profit
|
|
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5,407,662
|
|
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6,523,939
|
|
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Selling, general and administrative expenses
|
|
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6,045,635
|
|
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6,188,635
|
|
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Royalty expense, net
|
|
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29,502
|
|
|
48,317
|
|
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Amortization of intangible assets
|
|
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9,290
|
|
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23,224
|
|
||
Income (loss) from operations
|
|
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(676,765
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)
|
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263,763
|
|
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Other expense, net:
|
|
|
|
|
|
||||
Interest expense
|
|
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(112,929
|
)
|
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(107,598
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)
|
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Other, net
|
|
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22,221
|
|
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(4,671
|
)
|
||
Other expense, net
|
|
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(90,708
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)
|
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(112,269
|
)
|
||
Income (loss) before income taxes
|
|
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(767,473
|
)
|
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151,494
|
|
||
Income tax expense (benefit)
|
|
|
(323,801
|
)
|
|
40,262
|
|
||
Net income (loss)
|
|
|
$
|
(443,672
|
)
|
|
$
|
111,232
|
|
Net loss attributable to noncontrolling interest
|
|
|
(31,536
|
)
|
|
(18,588
|
)
|
||
Net income (loss) attributable to OCC
|
|
|
$
|
(412,136
|
)
|
|
$
|
129,820
|
|
Net income (loss) attributable to OCC per share: Basic and diluted
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.02
|
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Cash dividends declared per common share
|
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
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Three Months Ended January 31, 2014
|
|||||||||||||||||||||
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Common Stock
|
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Retained Earnings
|
|
Total
Shareholders’
Equity Attributable to OCC
|
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Noncontrolling Interest
|
|
Total
Shareholders’ Equity
|
|||||||||||||
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Shares
|
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Amount
|
|
|
|
|
|||||||||||||||
Balances at October 31, 2013
|
|
6,570,734
|
|
|
$
|
8,679,435
|
|
|
$
|
21,519,238
|
|
|
$
|
30,198,673
|
|
|
$
|
(638,957
|
)
|
|
$
|
29,559,716
|
|
Share-based compensation, net
|
|
(22,863
|
)
|
|
134,135
|
|
|
—
|
|
|
134,135
|
|
|
—
|
|
|
134,135
|
|
|||||
Common stock dividends declared, $0.02 per share
|
|
—
|
|
|
—
|
|
|
(131,153
|
)
|
|
(131,153
|
)
|
|
—
|
|
|
(131,153
|
)
|
|||||
Excess tax benefits from share-based compensation
|
|
—
|
|
|
3,299
|
|
|
—
|
|
|
3,299
|
|
|
—
|
|
|
3,299
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
(412,136
|
)
|
|
(412,136
|
)
|
|
(31,536
|
)
|
|
(443,672
|
)
|
|||||
Balances at January 31, 2014
|
|
6,547,871
|
|
|
$
|
8,816,869
|
|
|
$
|
20,975,949
|
|
|
$
|
29,792,818
|
|
|
$
|
(670,493
|
)
|
|
$
|
29,122,325
|
|
|
|
Three Months Ended
|
||||||
|
|
January 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(443,672
|
)
|
|
$
|
111,232
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, amortization and accretion
|
|
478,576
|
|
|
495,112
|
|
||
Bad debt recovery
|
|
(7,255
|
)
|
|
(7,095
|
)
|
||
Deferred income tax expense
|
|
36,366
|
|
|
42,871
|
|
||
Share-based compensation expense
|
|
155,412
|
|
|
336,798
|
|
||
Impact of excess tax benefits from share-based compensation
|
|
(3,299
|
)
|
|
(40,205
|
)
|
||
Loss on sale of property and equipment
|
|
990
|
|
|
—
|
|
||
(Increase) decrease in:
|
|
|
|
|
||||
Trade accounts receivable
|
|
1,253,759
|
|
|
3,400,146
|
|
||
Other receivables
|
|
84,086
|
|
|
114,911
|
|
||
Income taxes refundable
|
|
(292,379
|
)
|
|
(19,425
|
)
|
||
Inventories
|
|
(977,758
|
)
|
|
(995,794
|
)
|
||
Prepaid expenses
|
|
(202,205
|
)
|
|
(26,113
|
)
|
||
Increase (decrease) in:
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
792,524
|
|
|
193,907
|
|
||
Accrued compensation and payroll taxes
|
|
117,684
|
|
|
(2,075,733
|
)
|
||
Income taxes payable
|
|
—
|
|
|
17,268
|
|
||
Other noncurrent liabilities
|
|
(77,714
|
)
|
|
(35,371
|
)
|
||
Net cash provided by operating activities
|
|
915,115
|
|
|
1,512,509
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchase of and deposits for the purchase of property and equipment
|
|
(205,335
|
)
|
|
(1,487,958
|
)
|
||
Investment in intangible assets
|
|
(21,090
|
)
|
|
(36,230
|
)
|
||
Net cash used in investing activities
|
|
(226,425
|
)
|
|
(1,524,188
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Payroll taxes withheld and remitted on share-based payments
|
|
(21,277
|
)
|
|
(287,151
|
)
|
||
Proceeds from note payable to bank
|
|
—
|
|
|
2,300,000
|
|
||
Principal payments on long-term debt and note payable to bank
|
|
(562,935
|
)
|
|
(1,360,232
|
)
|
||
Repurchase of common stock
|
|
—
|
|
|
(543,420
|
)
|
||
Impact of excess tax benefits from share-based compensation
|
|
3,299
|
|
|
40,205
|
|
||
Common stock dividends paid
|
|
(131,518
|
)
|
|
(222,429
|
)
|
||
Net cash used in financing activities
|
|
(712,431
|
)
|
|
(73,027
|
)
|
||
Net decrease in cash
|
|
(23,741
|
)
|
|
(84,706
|
)
|
||
Cash at beginning of period
|
|
750,303
|
|
|
591,038
|
|
||
Cash at end of period
|
|
$
|
726,562
|
|
|
$
|
506,332
|
|
(1)
|
General
|
(2)
|
Stock Incentive Plans and Other Share-Based Compensation
|
(3)
|
Allowance for Doubtful Accounts for Trade Accounts Receivable
|
|
|
Three Months Ended
|
||||||
|
|
January 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Balance at beginning of period
|
|
$
|
74,073
|
|
|
$
|
92,148
|
|
Bad debt recovery
|
|
(7,255
|
)
|
|
(7,095
|
)
|
||
Losses charged to allowance
|
|
—
|
|
|
387
|
|
||
Balance at end of period
|
|
$
|
66,818
|
|
|
$
|
85,440
|
|
(4)
|
Inventories
|
|
|
January 31,
2014
|
|
October 31,
2013
|
||||
Finished goods
|
|
$
|
5,858,984
|
|
|
$
|
5,569,539
|
|
Work in process
|
|
3,705,894
|
|
|
3,617,124
|
|
||
Raw materials
|
|
9,411,923
|
|
|
8,828,072
|
|
||
Production supplies
|
|
235,236
|
|
|
219,544
|
|
||
Total
|
|
$
|
19,212,037
|
|
|
$
|
18,234,279
|
|
(5)
|
Product Warranties
|
|
|
Three Months Ended
January 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Balance at beginning of period
|
|
$
|
190,000
|
|
|
$
|
250,000
|
|
Liabilities accrued for warranties issued during the period
|
|
104,777
|
|
|
139,834
|
|
||
Warranty claims and costs paid during the period
|
|
(50,539
|
)
|
|
(30,344
|
)
|
||
Changes in liability for pre-existing warranties during the period
|
|
(84,238
|
)
|
|
(149,490
|
)
|
||
Balance at end of period
|
|
$
|
160,000
|
|
|
$
|
210,000
|
|
(6)
|
Long-term Debt and Note Payable to Bank
|
|
|
January 31,
2014
|
|
October 31,
2013
|
||||
Virginia Real Estate Loan ($6.5 million original principal) payable in monthly installments of $36,426, including interest (at 4.25%), with final payment of $4,858,220 due April 30, 2018
|
|
$
|
5,721,142
|
|
|
$
|
5,767,947
|
|
North Carolina Real Estate Loan ($2.24 million original principal) payable in monthly installments of $12,553, including interest (at 4.25%), with final payment of $1,674,217 due April 30, 2018
|
|
1,971,593
|
|
|
1,987,723
|
|
||
Total long-term debt
|
|
7,692,735
|
|
|
7,755,670
|
|
||
Less current installments
|
|
261,447
|
|
|
258,628
|
|
||
Long-term debt, excluding current installments
|
|
$
|
7,431,288
|
|
|
$
|
7,497,042
|
|
(7)
|
Fair Value Measurements
|
(8)
|
Net Income (Loss) Per Share
|
|
|
Three months ended January 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Net income (loss) attributable to OCC (numerator)
|
|
$
|
(412,136
|
)
|
|
$
|
129,820
|
|
Shares (denominator)
|
|
6,014,075
|
|
|
6,309,421
|
|
||
Basic and diluted net income (loss) per share
|
|
$
|
(0.07
|
)
|
|
$
|
0.02
|
|
(9)
|
Shareholders’ Equity
|
(10)
|
Segment Information and Business and Credit Concentrations
|
(11)
|
Contingencies
|
(12)
|
New Accounting Standards Not Yet Adopted
|
•
|
Consolidated net sales for the first quarter of fiscal year 2014 were $16.5 million, down 4.4% when compared to net sales of $17.3 million for the same period last year.
|
•
|
Gross profit decreased 17.1% to $5.4 million for the first quarter of fiscal year 2014 compared to $6.5 million for the same period last year.
|
•
|
Gross profit margin (gross profit as a percentage of net sales) decreased to 32.7% during the first quarter of fiscal year 2014, compared to 37.7% during the same period last year.
|
•
|
We reported a net loss attributable to OCC of $412,000 or $0.07, per share during the first quarter of fiscal year 2014, compared to net income attributable to OCC of $130,000, or $0.02 per share, for the comparable period last year.
|
•
|
OCC generated $915,000 of cash flow from operating activities during the first quarter of fiscal year 2014.
|
•
|
OCC continued to provide returns to shareholders in the form of a quarterly dividend during the first quarter of fiscal year 2014. OCC's current regular quarterly dividend rate is $0.02 per share per quarter, implying an annual dividend rate of $0.08 per share.
|
|
|
Three Months Ended
January 31,
|
|
Percent Change
|
|||||||
|
|
2014
|
|
2013
|
|
||||||
Net sales
|
|
$
|
16,535,000
|
|
|
$
|
17,295,000
|
|
|
(4.4
|
)%
|
Gross profit
|
|
5,408,000
|
|
|
6,524,000
|
|
|
(17.1
|
)%
|
||
SG&A expenses
|
|
6,046,000
|
|
|
6,189,000
|
|
|
(2.3
|
)%
|
||
Net income (loss) attributable to OCC
|
|
(412,000
|
)
|
|
130,000
|
|
|
(417.5
|
)%
|
|
OPTICAL CABLE CORPORATION
|
|
(Registrant)
|
|
|
Date: March 14, 2014
|
/s/ Neil D. Wilkin, Jr.
|
|
Neil D. Wilkin, Jr.
|
|
Chairman of the Board of Directors, President and Chief Executive Officer
|
|
|
Date: March 14, 2014
|
/s/ Tracy G. Smith
|
|
Tracy G. Smith
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Senior Vice President and Chief Financial Officer
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Exhibit
No.
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Description
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2.1
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Agreement and Plan of Merger dated May 30, 2008 by and among Optical Cable Corporation, Aurora Merger Corporation, Preformed Line Products Company and Superior Modular Products Incorporated (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed June 2, 2008).
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3.1
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Articles of Amendment filed November 5, 2001 to the Amended and Restated Articles of Incorporation, as amended through November 5, 2001 (incorporated herein by reference to Exhibit 1 to the Company's Form 8-A12G filed with the Commission on November 5, 2001).
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3.2
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Amended and Restated Bylaws of Optical Cable Corporation (incorporated herein by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the third quarter ended July 31, 2011).
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4.1
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Form of certificate representing Common Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the third quarter ended July 31, 2004 (file number 0-27022)).
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4.2
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Form of certificate representing Common Stock (incorporated herein by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the third quarter ended July 31, 2012).
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4.3
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Stockholder Protection Rights Agreement dated as of October 28, 2011, between Optical Cable Corporation and American Stock Transfer & Trust Company, LLC, as Rights Agent, including as Exhibit A The Forms of Rights Certificate and Election to Exercise (incorporated herein by reference to Exhibit 4.1 to the Company's Form 8-A12G filed with the Commission on November 1, 2011).
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4.4
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Credit Agreement dated May 30, 2008 by and between Optical Cable Corporation and Superior Modular Products Incorporated as borrowers and Valley Bank as lender in the amount of $17,000,000 consisting of a Revolver in the amount of $6,000,000; Term Loan A in the amount of $2,240,000; Term Loan B in the amount of $6,500,000; and a Capital Acquisitions Term Loan in the amount of $2,260,000 (incorporated herein by reference to Exhibit 4.16 of the Company's Annual Report on Form 10-K for the period ended October 31, 2008 filed January 29, 2009).
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4.5
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Credit Line Deed of Trust dated May 30, 2008 between Optical Cable Corporation as Grantor, LeClairRyan as Trustee and Valley Bank as Beneficiary (incorporated herein by reference to Exhibit 4.17 of the Company's Annual Report on Form 10-K for the period ended October 31, 2008 filed January 29, 2009).
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4.6
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Deed of Trust, Security Agreement and Fixtures Filing dated May 30, 2008 by and between Superior Modular Products Incorporated as Grantor, LeClairRyan as Trustee and Valley Bank as Beneficiary (incorporated herein by reference to Exhibit 4.18 of the Company's Annual Report on Form 10-K for the period ended October 31, 2008 filed January 29, 2009).
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4.7
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Security Agreement dated May 30, 2008 between Optical Cable Corporation and Superior Modular Products Incorporated and Valley Bank (incorporated herein by reference to Exhibit 4.19 of the Company's Annual Report on Form 10-K for the period ended October 31, 2008 filed January 29, 2009).
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4.8
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Term Loan A Note in the amount of $2,240,000 by Optical Cable Corporation and Superior Modular Products Incorporated dated May 30, 2008 (incorporated herein by reference to Exhibit 4.21 of the Company's Annual Report on Form 10-K for the period ended October 31, 2008 filed January 29, 2009).
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4.9
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Term Loan B Note in the amount of $6,500,000 by Optical Cable Corporation and Superior Modular Products Incorporated dated May 30, 2008 (incorporated herein by reference to Exhibit 4.22 of the Company's Annual Report on Form 10-K for the period ended October 31, 2008 filed January 29, 2009).
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4.10
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First Loan Modification Agreement dated February 16, 2010 by and between Optical Cable Corporation and Valley Bank (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 22, 2010).
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4.11
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Second Loan Modification Agreement dated April 30, 2010 by and between Optical Cable Corporation, for itself and as successor by merger to Superior Modular Products Incorporated, and Valley Bank (incorporated herein by reference to Exhibit 4.13 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2010 filed June 14, 2010).
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4.12
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Addendum A to Commercial Note dated April 30, 2010 by and between Optical Cable Corporation and SunTrust Bank (incorporated herein by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2010 filed June 14, 2010).
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4.13
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Commercial Note dated April 30, 2010 by and between Optical Cable Corporation and SunTrust Bank in the principal amount of $6,000,000 (incorporated herein by reference to Exhibit 4.15 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2010 filed June 14, 2010).
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4.14
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Security Agreement dated April 30, 2010 by Optical Cable Corporation in favor of SunTrust Bank (incorporated herein by reference to Exhibit 4.16 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2010 filed June 14, 2010).
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4.15
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Agreement to Commercial Note dated April 30, 2010 by and between Optical Cable Corporation and SunTrust Bank (incorporated herein by reference to Exhibit 4.17 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2010 filed June 14, 2010).
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4.16
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Third Loan Modification Agreement dated April 22, 2011 by and between Optical Cable Corporation, for itself and as successor by merger to Superior Modular Products Incorporated, and Valley Bank (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated April 28, 2011).
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4.17
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Binding Letter of Renewal dated July 25, 2011 by and between Optical Cable Corporation and SunTrust Bank (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated July 26, 2011).
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4.18
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Binding Letter of Renewal dated July 25, 2012 by and between Optical Cable Corporation and SunTrust Bank (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated July 26, 2012).
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4.19
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Fourth Loan Modification Agreement dated July 25, 2011 by and between Optical Cable Corporation, for itself and as successor by merger to Superior Modular Products Incorporated, and Valley Bank (incorporated herein by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K dated July 26, 2011).
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4.20
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Fifth Loan Modification Agreement dated August 31, 2012 by and between Optical Cable Corporation, for itself and as successor by merger to Superior Modular Products Incorporated, and Valley Bank (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated August 31, 2012).
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4.21
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Commercial Note dated August 30, 2013 by and between Optical Cable Corporation and SunTrust Bank in the principal amount of $9,000,000 (incorporated herein by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated September 3, 2013).
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4.22
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Agreement to Commercial Note dated August 30, 2013 by and between Optical Cable Corporation and SunTrust Bank (incorporated herein by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K dated September 3, 2013).
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4.23
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Addendum A to Commercial Note dated August 30, 2013 by and between Optical Cable Corporation and SunTrust Bank (incorporated herein by reference to Exhibit 99.3 to the Company's Current Report on Form 8-K dated September 3, 2013).
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4.24
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Sixth Loan Modification Agreement dated August 30, 2013 by and between Optical Cable Corporation, for itself and as successor by merger to Superior Modular Products Incorporated, and Valley Bank (incorporated herein by reference to Exhibit 99.4 to the Company's Current Report on Form 8-K dated September 3, 2013).
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10.1*
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Optical Cable Corporation Amended 2004 Non-Employee Directors Stock Plan (incorporated herein by reference to Appendix B to the Company's definitive proxy statement on Form 14A filed February 23, 2005).
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10.2*
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Form of award agreement under the Optical Cable Corporation Amended 2004 Non-Employee Directors Stock Plan (incorporated herein by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the period ended October 31, 2004 filed January 26, 2005).
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10.3*
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Optical Cable Corporation 2005 Stock Incentive Plan (incorporated by reference to Appendix A to the Company's definitive proxy statement on Form 14A filed February 23, 2005).
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10.4*
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Optical Cable Corporation 2011 Stock Incentive Plan (incorporated by reference to Appendix A to the Company's definitive proxy statement on Form 14A filed February 23, 2011).
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10.5*
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Optical Cable Corporation Amended and Restated 2011 Stock Incentive Plan (incorporated by reference to Appendix A to the Company's definitive proxy statement on Form 14A filed February 27, 2013).
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10.6*
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Form of time vesting award agreement under the Optical Cable Corporation 2005 Stock Incentive Plan, 2011 Stock Incentive Plan and Amended and Restated 2011 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the period ended April 30, 2006 filed June 14, 2006).
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10.7*
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Form of operational performance (Company financial performance measure) vesting award agreement under the Optical Cable Corporation 2005 Stock Incentive Plan, 2011 Stock Incentive Plan and Amended and Restated 2011 Stock Incentive Plan (incorporated by reference to Exhibit 10.20 of the Company's Quarterly Report on Form 10-Q for the period ended April 30, 2009 filed June 12, 2009).
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10.8
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Notice of Exercise of Warrant by the Company to purchase 98,741 shares of common stock of Applied Optical Systems, Inc. dated October 30, 2009 (incorporated herein by reference to Exhibit 10.21 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.9
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Stock Purchase Agreement dated October 31, 2009 by and among the Company, as buyer and G. Thomas Hazelton, Jr. and Daniel Roehrs as sellers (incorporated herein by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.10
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Buy-Sell Agreement dated October 31, 2009, by and between G. Thomas Hazelton, Jr., as guarantor, and the Company (incorporated herein by reference to Exhibit 10.25 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.11
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Buy-Sell Agreement dated October 31, 2009, by and between Daniel Roehrs, as guarantor, and the Company (incorporated herein by reference to Exhibit 10.26 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.12
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Indemnification Agreement dated October 31, 2009, between the Company and Applied Optical Systems, Inc. (incorporated herein by reference to Exhibit 10.27 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.13
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Supplemental Agreement dated October 31, 2009, by and among the Company, as buyer, Applied Optical Systems, Inc., George T. Hazelton Family Trust, G. Thomas Hazelton, Jr., and Daniel Roehrs (incorporated herein by reference to Exhibit 10.28 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.14
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Termination Agreement dated October 31, 2009, by and among Applied Optical Systems, Inc., the Company, as lender, and G. Thomas Hazelton, Jr. and Daniel Roehrs (incorporated herein by reference to Exhibit 10.29 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.15
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Warrant Exercise Agreement between the Company and Applied Optical Systems, Inc. dated October 30, 2009 (incorporated herein by reference to Exhibit 10.30 of the Company's Annual Report on Form 10-K for the period ended October 31, 2009 filed January 29, 2010).
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10.16
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Redemption Agreement by and between Optical Cable Corporation and BB&T Capital Markets dated September 20, 2012 (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed September 21, 2012).
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10.17*
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Amended and Restated Employment Agreement by and between Optical Cable Corporation and Neil D. Wilkin, Jr. effective April 11, 2011 (incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed April 15, 2011).
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10.18*
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Amendment, effective December 18, 2012, to Amended and Restated Employment Agreement by and between Optical Cable Corporation and Neil D. Wilkin, Jr. effective April 11, 2011 (incorporated herein by reference to Exhibit 10.16 of the Company's Quarterly Report on Form 10-Q for the period ended January 31, 2013 filed March 15, 2013).
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10.19*
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Second Amendment, effective March 14, 2014, to Amended and Restated Employment Agreement by and between Optical Cable Corporation and Neil D. Wilkin, Jr. effective April 11, 2011 (as amended December 18, 2012). FILED HEREWITH.
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10.20*
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Amended and Restated Employment Agreement by and between Optical Cable Corporation and Tracy G. Smith effective April 11, 2011 (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed April 15, 2011).
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10.21*
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Amendment, effective December 18, 2012, to Amended and Restated Employment Agreement by and between Optical Cable Corporation and Tracy G. Smith effective April 11, 2011 (incorporated herein by reference to Exhibit 10.18 of the Company's Quarterly Report on Form 10-Q for the period ended January 31, 2013 filed March 15, 2013).
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10.22*
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Second Amendment, effective March 14, 2014, to Amended and Restated Employment Agreement by and between Optical Cable Corporation and Tracy G. Smith effective April 11, 2011 (as amended December 18, 2012). FILED HEREWITH.
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11.1
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Statement regarding computation of per share earnings (incorporated by reference to note 8 of the Condensed Notes to Condensed Consolidated Financial Statements contained herein).
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31.1
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Certification of the Company's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. FILED HEREWITH.
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31.2
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Certification of the Company's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. FILED HEREWITH.
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32.1
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Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. FILED HEREWITH.
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32.2
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Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. FILED HEREWITH.
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101
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The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended January 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at January 31, 2014 and October 31, 2013, (ii) Condensed Consolidated Statements of Operations for the three months ended January 31, 2014 and 2013, (iii) Condensed Consolidated Statement of Shareholders’ Equity for the three months ended January 31, 2014, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended January 31, 2014 and 2013, and (v) Condensed Notes to Condensed Consolidated Financial Statements. FILED HEREWITH.
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*
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Management contract or compensatory plan or agreement.
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1.
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I have reviewed this quarterly report on Form 10-Q of Optical Cable Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s independent registered public accounting firm and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 14, 2014
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/s/ Neil D. Wilkin, Jr.
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Neil D. Wilkin, Jr.
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Chairman of the Board of Directors, President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Optical Cable Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s independent registered public accounting firm and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 14, 2014
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/s/ Tracy G. Smith
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Tracy G. Smith
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Senior Vice President and Chief Financial Officer
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Date: March 14, 2014
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/s/ Neil D. Wilkin, Jr.
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Neil D. Wilkin, Jr.
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Chairman of the Board of Directors, President and Chief Executive Officer
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Date: March 14, 2014
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/s/ Tracy G. Smith
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Tracy G. Smith
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Senior Vice President and Chief Financial Officer
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