UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2008
OPTICAL CABLE CORPORATION
(Exact name of registrant as specified in its charter)
| Virginia | 000-27022 | 54-1237042 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification Number) |
| 5290 Concourse Drive Roanoke, VA |
24019 | |
| (Address of principal executive offices) | (Zip Code) |
(540) 265-0690
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Table of Contents
| Item 2.02 | Results of Operations and Financial Condition |
| Item 9.01 | Financial Statements and Exhibits |
Signatures
Exhibits
| Item 2.02. | Results of Operations and Financial Condition |
On March 13, 2008, Optical Cable Corporation issued a press release announcing its first quarter of fiscal year 2008 financial results. On March 14, 2008, Optical Cable Corporation held a conference call to discuss the financial results for its first quarter of fiscal year 2008. The press release is attached hereto as Exhibit 99.1 and the transcript for the conference call is attached as Exhibit 99.2.
| Item 9.01. | Financial Statements and Exhibits |
(c) Exhibits
The following are filed as Exhibits to this Report.
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Press release issued March 13, 2008 (FILED HEREWITH) | |
| 99.2 | Transcript of conference call on March 14, 2008 (FILED HEREWITH) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OPTICAL CABLE CORPORATION | ||
| By: | /s/ TRACY G. SMITH | |
| Name: | Tracy G. Smith | |
| Title: | Vice President and Chief Financial Officer | |
Dated: March 19, 2008
EXHIBIT INDEX
OPTICAL CABLE CORPORATION
Current report on Form 8-K
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Press release issued March 13, 2008 (FILED HEREWITH) | |
| 99.2 | Transcript of conference call on March 14, 2008 (FILED HEREWITH) | |
Exhibit 99.1
 |
OPTICAL CABLE CORPORATION | |
| 5290 Concourse Drive | ||
| Roanoke, VA 24019 | ||
| (Nasdaq GM: OCCF) | ||
| www.occfiber.com |
AT THE COMPANY:
| Neil Wilkin | Tracy Smith | |
| President & CEO | Vice President & CFO | |
| (540) 265-0690 | (540) 265-0690 | |
| investorrelations@occfiber.com | investorrelations@occfiber.com |
AT JOELE FRANK, WILKINSON BRIMMER KATCHER:
| Andrew Siegel | Jaime Wert | |
| (212) 355-4449 ext. 127 | (212) 355-4449 ext. 173 | |
| asiegel@joelefrank.com | jwert@joelefrank.com |
FOR IMMEDIATE RELEASE
OPTICAL CABLE CORPORATION REPORTS
FISCAL FIRST QUARTER 2008 FINANCIAL RESULTS
Net Sales, Gross Profit and Net Income All Increased in First Quarter of Fiscal 2008
ROANOKE, VA, March 13, 2008 — Optical Cable Corporation (Nasdaq GM: OCCF) today announced financial results for its fiscal first quarter ended January 31, 2008.
The Company reported increases in net sales, gross profit and net income for the first quarter of fiscal 2008 when compared to the same period last year.
First Quarter 2008 Financial Results
Optical Cable reported net income of $862,000, or $0.14 per basic and diluted share, for its first quarter of fiscal 2008, as compared to a net loss of $332,000, or $0.06 per basic and diluted share, for the same period last year.
Net sales for the first quarter of fiscal 2008 increased 36.5% to $12.7 million compared to net sales of $9.3 million for the comparable period last year. The Company’s net sales growth during the first quarter was achieved over a broad customer base and product mix, with particularly notable increases in the Company’s specialty markets.
Optical Cable Corp. – First Quarter 2008 Earnings Release
Page 2 of 5
Gross profit increased 79.2% to $5.3 million in the first quarter of fiscal 2008, up from $3.0 million in the first quarter of fiscal 2007. Gross profit as a percentage of net sales (or “gross profit margin”) for the first quarter of fiscal 2008 increased to 42.1% compared to 32.1% for the first quarter of fiscal 2007. These improvements are due in part to an increase in Optical Cable’s sales of higher margin products and the continued benefits of the Company’s previous investments to enhance operational efficiency.
Selling, general and administrative expenses (“SG&A expenses”) for the first quarter of fiscal 2008 increased 14.4% to $4.0 million from $3.5 million for the comparable period last year. SG&A expenses as a percentage of net sales dropped to 31.5% in the first quarter of fiscal 2008 compared to 37.6% in the first quarter of fiscal 2007.
Management’s Comments
“Optical Cable is off to a great start in our new fiscal year and we look forward to building on this success. Our year-over-year increases in net sales, gross profit and net income confirm that we have the right strategies in place to continue serving our customers while driving further growth and enhanced profitability. We will continue to execute on our strategic plan and focus on positioning Optical Cable for long-term shareholder value creation,” stated Mr. Neil Wilkin, President and CEO of Optical Cable Corporation.
Company Information
Optical Cable Corporation is a leading manufacturer of fiber optic cables primarily sold into the enterprise market, and the premier manufacturer of military ground tactical fiber optic cables for the U.S. military. Founded in 1983, Optical Cable Corporation pioneered the design and production of fiber optic cables for the most demanding military field applications, as well as fiber optic cables suitable for both indoor and outdoor use. The Company’s current broad product offering is built on the evolution of these fundamental technologies, and is designed to provide end-users with fiber optic cables that are easy and economical to install, provide a high degree of reliability and offer outstanding performance characteristics. Optical Cable Corporation sells its products worldwide for uses ranging from commercial and campus installations to customized products for specialty applications and harsh environments, including military applications. The Company manufactures its high quality fiber optic cables at its ISO 9001:2000 registered and MIL-STD-790F certified facility located in Roanoke, Virginia.
Further information about Optical Cable Corporation is available on the World Wide Web at www.occfiber.com.
FORWARD-LOOKING INFORMATION
This news release by Optical Cable Corporation (the “Company”) 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 the Company’s outlook for the future, (ii) statements of belief, anticipation or expectation, (iii) future plans,
Optical Cable Corp. – First Quarter 2008 Earnings Release
Page 3 of 5
strategies or anticipated events, and (iv) similar information and statements concerning matters that are not historical facts. Such forward-looking information is subject to risks and uncertainties that may cause actual events to differ materially from the Company’s expectations. Factors that could cause or contribute to such differences include, but are not limited to: the level of sales to key customers, including distributors; timing of certain projects and purchases by key customers; the economic conditions affecting network service providers; corporate and/or government spending on information technology; actions by competitors; fluctuations in the price of raw materials (including optical fiber); the Company’s dependence on a single manufacturing facility; the Company’s ability to protect its proprietary manufacturing technology; market conditions influencing prices or pricing; the Company’s dependence on a limited number of suppliers; the loss of or conflict with one or more key suppliers or customers; an adverse outcome in litigation, claims and other actions, and potential litigation, claims and other actions against the Company; an adverse outcome in regulatory reviews and audits and potential regulatory reviews and audits; adverse changes in state tax laws and/or positions taken by state taxing authorities affecting the Company; technological changes and introductions of new competing products; changes in end-user preferences for competing technologies, including copper cable and wireless, relative to fiber optic cable; economic conditions that affect the telecommunications sector, certain technology sectors or the economy as a whole; terrorist attacks or acts of war, and any current or potential future military conflicts; changes in the level of military spending by the United States government; ability to retain key personnel; inability to recruit needed personnel; poor labor relations; the impact of changes in accounting policies, including those by the Securities and Exchange Commission and the Public Company Accounting Oversight Board; the Company’s ability to successfully comply with, and the cost of compliance with, the provisions of Section 404 of the Sarbanes-Oxley Act of 2002 or any revisions to that act which apply to the Company; impact of future consolidation among competitors and/or among customers adversely affecting the Company’s position with its customers and/or its market position; actions by customers adversely affecting the Company in reaction to the expansion of its product offering in any manner, including, but not limited to, by offering products that compete with its customers, and/or by entering into alliances with, and/or making investments in or with, parties that compete with and/or have conflicts with customers of the Company; adverse reactions by customers, vendors or other service providers to unsolicited proposals regarding the acquisition of the Company by another company; the additional costs of considering and possibly defending the Company’s position on such unsolicited proposals regarding the acquisition of the Company by another company; impact of weather or natural disasters in the areas of the world in which the Company operates and markets its products; economic downturns and/or changes in market demand, exchange rates, productivity, or market and economic conditions in the areas of the world in which the Company operates and markets its products, and its success in managing the risks involved in the foregoing. The Company cautions readers that the foregoing list of important factors is not exclusive and the Company incorporates by reference those factors included in current reports on Form 8-K.
(Financial Tables Follow)
Optical Cable Corp. – First Quarter 2008 Earnings Release
Page 4 of 5
OPTICAL CABLE CORPORATION
CONDENSED STATEMENTS OF INCOME
(thousands, except per share data)
(unaudited)
| Three Months Ended January 31, |
||||||||
| 2008 | 2007 | |||||||
| Net sales |
$ | 12,661 | $ | 9,276 | ||||
| Cost of goods sold |
7,329 | 6,300 | ||||||
| Gross profit |
5,332 | 2,976 | ||||||
| SG&A expenses |
3,989 | 3,487 | ||||||
| Income (loss) from operations |
1,343 | (511 | ) | |||||
| Interest income (expense), net |
40 | (11 | ) | |||||
| Other, net |
(14 | ) | 3 | |||||
| Other income (expense), net |
26 | (8 | ) | |||||
| Income (loss) before income taxes |
1,369 | (519 | ) | |||||
| Income tax expense (benefit) |
507 | (187 | ) | |||||
| Net income (loss) |
$ | 862 | $ | (332 | ) | |||
| Net income (loss) per share: |
||||||||
| Basic and diluted |
$ | 0.14 | $ | (0.06 | ) | |||
| Weighted average shares outstanding: |
||||||||
| Basic and diluted |
6,090 | 6,008 | ||||||
—MORE—
Optical Cable Corp. – First Quarter 2008 Earnings Release
Page 5 of 5
OPTICAL CABLE CORPORATION
CONDENSED BALANCE SHEET DATA
(thousands)
(unaudited)
| January 31, 2008 |
October 31, 2007 | |||||
| Cash |
$ | 4,067 | $ | 3,139 | ||
| Trade accounts receivable, net |
8,591 | 9,057 | ||||
| Inventories |
8,053 | 7,340 | ||||
| Other current assets |
1,404 | 1,279 | ||||
| Total current assets |
$ | 22,115 | $ | 20,815 | ||
| Non-current assets |
16,666 | 16,466 | ||||
| Total assets |
$ | 38,781 | $ | 37,281 | ||
| Current liabilities |
$ | 5,323 | $ | 4,878 | ||
| Non-current liabilities |
482 | 425 | ||||
| Total liabilities |
$ | 5,805 | $ | 5,303 | ||
| Total shareholders’ equity |
32,976 | 31,978 | ||||
| Total liabilities and shareholders’ equity |
$ | 38,781 | $ | 37,281 | ||
###
Exhibit 99.2
FINAL TRANSCRIPT
Conference Call Transcript
OCCF - Q1 2008 Optical Cable Earnings Conference Call
Event Date/Time: Mar. 14. 2008 / 10:00AM ET
Operator
Good morning and welcome to the Optical Cable Corp. conference call. I will now turn the call over to Andrew Siegel. Sir, you may begin your call.
Andrew Siegel - Joele Frank, Wilkinson Brimmer Katcher - IR
Thank you. Good morning and thank you all for participating in Optical Cable Corporation’s First Quarter Fiscal Year 2008 Conference Call. By this time, everyone should have a copy of today’s earnings press release. If you haven’t, please visit www.oocfiber.com for a copy.
On the call with us today is Neil Wilkin, President and Chief Executive Officer of Optical Cable Corporation. Before we begin, I’d like to remind everyone that this call may contain forward-looking statements that involve risks and uncertainties. The actual future results of Optical Cable Corporation may differ materially due to a number of factors including, but not limited to, those factor set forth in detail in the “forward looking statements” section of yesterday’s press release. These cautionary statements apply to the contents of the Internet Webcast on www.occfiber.com as well as today’s call. Now I’d like to turn the call over to Neil Wilkin. Neil, please begin.
Neil Wilkin - Optical Cable Corporation - President and CEO
Thank you, Andrew, and good morning everyone. Joining me here today is Tracy Smith, our Chief Financial Officer. I’d like to begin the call today with a few opening remarks. I will then have Tracy review the first quarter results for the three-month period ended January 31, 2008 in more detail. After Tracy’s remarks, I will provide you a few closing remarks and then we’ll take as many questions that the participants have as we can.
I’d like to note that during the Q&A session we will—as we normally do—take questions from analysts and institutional investors. Additionally, we will also answer a number of questions, if any, from investor — from individual investors that were submitted prior to today’s call.
As a reminder, when we do offer an opportunity for shareholders to submit questions in advance of our earnings call, we will include instructions regarding such submissions in our press release, announcing the date and time of our earnings call—as we did for today’s call.
The Optical Cable Team delivered another quarter of strong financial performance for our shareholders. During the first quarter of fiscal year 2008, net sales, gross profits and net income all increased when compared to the same period last year. Net sales increased 36.5% to $12.7 million during Q1 2008 when compared to the same period last year.
At the same time, gross profit as a percentage of net sales increased to 42.1% during the first quarter of fiscal 2008, compared to 32.1% during this same period last year. And during an historically slower part of the year, Optical Cable posted net income of $0.14 per share, exceeding the $0.13 per share earned during the fourth quarter of fiscal 2007, as well as exceeding earnings for all other individual quarters during fiscal 2007.
Optical Cable’s performance this quarter brings our trailing twelve-month earnings to $0.40 per share. And our net book value, as of the end of Q1 2008 is $5.43 per share. For these reasons, as well as Optical Cable’s many demonstrated accomplishments to date, we believe our current share price represents a discount to OCC’s real value.
The Company’s recent financial successes have been made possible by the hard work and dedication of Optical Cable’s employees, as well as the investments we made to significantly upgrade OCC’s facilities, processes and systems in recent years. We believe our recent financial results confirm that Optical Cable has the right strategies in place and that these strategies have made Optical Cable a stronger company, better positioned for long-term growth and value creation. And by investing for the future, we believe we have increased plant efficiency, improved customer service and enhanced the scalability of our business. We continue to realize the benefits made possible by the successful execution of our strategy. OCC is off to a great start in — for 2008 and we look forward to building upon this success. I will now turn the call over to Tracy Smith, our Chief Financial Officer, who will review some specifics of our financial results for the first quarter.
Tracy Smith - Optical Cable Corporation - CFO
Thank you, Neil. For our first quarter of fiscal year 2008, we reported net income of $862,000, or $0.14 per basic and diluted share, compared to a net loss of $332,000, or $0.06 per basic and diluted share, for the same period last year.
Net sales increased 36.5% to $12.7 million for the first quarter of fiscal year 2008 compared to $9.3 million for the same period last year. Net sales outside the U.S. continued to show substantial strength in the first quarter of fiscal 2008, increasing 94.8% compared to the same period last year. We are pleased with our solid net sales growth in the first quarter. We experienced an increase in net sales (both in the U.S. and internationally) in certain of our targeted specialty markets during the first quarter, compared to the same period last year. This increase was partially offset by a slight decrease in net sales for our commercial markets.
Gross profit margin, or gross profit as a percentage of net sales, increased to 42.1% for the first quarter of 2008, compared to 32.1% for the same period last year. Gross profit increased 79.2% to $5.3 million during the first quarter of fiscal 2008, compared to $3 million for the same period last year.
During the first quarter of fiscal 2008, we maintained the positive impact we experienced in the second half of fiscal 2007 on our gross profit margins that we attributed to the improvements in our manufacturing efficiencies resulting from the successful integration of our ERP system. Additionally, during the first quarter of fiscal 2008, we experienced an increase in net sales related to higher margin products. Our gross profit margin percentages are heavily dependent upon product mix on a quarterly basis and may deviate from expectations based on both anticipated and unanticipated changes in product mix.
SG&A expense for the first quarter of fiscal 2008 increased to $4 million compared to $3.5 million for the comparable period last year. However, SG&A expenses as a percentage of net sales dropped to 31.5% in the first quarter of 2008, compared to 37.6% in the first quarter of fiscal 2007.
The increase in SG&A expenses during the first quarter of fiscal 2008, compared to the same period last year, was primarily due to increases in employee performance-based incentives based on improved financial results during the first quarter of fiscal 2008, including increases in commissions due to higher net sales.
Subsequent to the end of the first quarter, our $5 million Working Capital Facility and our $2 million Machinery and Equipment Facility expired on February 28, 2008. Valley Bank agreed to extend these two facilities through April 28, 2008. While Valley Bank indicated that they were agreeable to a one-year extension of these two facilities, we requested a 60-day extension in order to give us time to seek more favorable credit terms from various lenders.
We are engaged in active discussions with Valley Bank, as well as other financial institutions, to replace our existing credit facilities with credit facilities we believe will be more appropriate, and at least as favorable, for our current and anticipated financing needs. As a reminder, the period of time in which advances under the $6.5 million Real Estate Loan may be made was previously extended by Valley Bank until February 28, 2009. And with that, I will turn the call back over to Neil.
Neil Wilkin - Optical Cable Corporation - President and CEO
Thanks, Tracy. In closing, I’d like to first call your attention to the recent retirement of our Senior Vice President of Operations. After a long and successful career with Optical Cable Corporation, Luke Huybrechts retired effective February 29th. Luke was employed with OCC for over 20 years, serving as Senior Vice President of Sales before becoming our Senior Vice President of Operations in May 2004. Luke also serves on our Board of Directors and has served since 1995. He will complete his current term as a director on March 25th of this year.
I’m pleased to say that it is anticipated that Luke will continue to work with Optical Cable Corporation in a consulting capacity for the next couple of years. We thank Luke for his dedicated service to Optical Cable and his friendship. And we wish him all the best to him and to his wife, Bobbie, and their family.
The Optical Cable Team is, and always has been, fiercely committed to increasing long-term shareholder value rather than generating short-term returns. I am particularly pleased that Optical Cable now seems to be seeing the financial benefits of that approach. While certain factors may result in fluctuations in individual quarters, and while the recent economic conditions may present new challenges for us, we believe that we are taking the necessary steps to appropriately position Optical Cable for long-term success.
During fiscal year 2008, Optical Cable will continue to focus on growing sales in its commercial markets and targeted specialty markets, further improving its facilities as appropriate and pursuing appropriate strategic opportunities. We continue to be confident that Optical Cable has the right strategies in place to serve its customers and to drive growth and profitability.
Now, we are happy to answer as many of your questions as we can. We will first take questions from our analysts and fund investors and if time permits, we will address any questions submitted in advance of today’s conference call by individual investors as well. Operator, please indicate the instructions for participants to call in their questions.
QUESTION AND ANSWER
Operator
Thank you.
(OPERATOR INSTRUCTIONS)
Thank you, our first question is coming from Russ Silvestri with Skiritai Capital.
Russ Silvestri - Skiritai Capital - Analyst
Good morning. Neil?
Neil Wilkin - Optical Cable Corporation - President and CEO
Good morning, Russ. How are you?
Russ Silvestri - Skiritai Capital - Analyst
Fine. Thank you. Congratulations on a nice quarter.
Neil Wilkin - Optical Cable Corporation - President and CEO
Thank you.
Russ Silvestri - Skiritai Capital - Analyst
Can you just talk a little bit about the gross margin and I was just trying to understand - obviously, this is a nice number, the 41 or so percent. Can you talk about its sustainability? And then, just looking out over the course of the year as you look back over history, usually the first quarter tends to be your softer. And I was wondering if you thought that might be the case again this year.
Neil Wilkin - Optical Cable Corporation - President and CEO
Good question. Gross profit margin in the first quarter I think was 42.1%.
Russ Silvestri - Skiritai Capital - Analyst
Okay.
Neil Wilkin - Optical Cable Corporation - President and CEO
That is higher than we normally see. We did benefit in the first quarter from a couple of larger higher margin specialty orders. I don’t — we haven’t targeted, and I’ve said before, a gross profit margin as high as 42% on an ongoing basis. What we’ve last said is that we’ve been trying to target a gross profit margin of 37% or 38%. I think with the benefits we’re seeing from ERP, and its implementation and some of the other things that we’re doing, it’s possible for the margin to be higher, but I really wouldn’t want to commit to that.
We did see stronger sales in the first quarter than we typically do — first and second quarter are normally weaker for us. But the first quarter is — obviously was strong and we’re pleased with that. I think that we, at this point, just haven’t seen the sort of weakness in the economy that, in our business, that people have been talking about. That doesn’t mean that it doesn’t exist or couldn’t end up affecting us later in the year. But right now we seem to be on a pretty good pace.
It will be interesting — I can’t really say and I’m not prepared to give guidance for the second, third or fourth quarter. I don’t think it would be appropriate for you to extrapolate the first quarter and say that we’re going to do much better in the third and fourth quarter. Although, obviously, we’re working towards that.
I think we’ve gotten off to a good start. I think that I’m still optimistic about how the year’s going to turn out. And we’re going to continue down that path and barring any significant industry economic downturns, I think we are going to do pretty well this year.
Russ Silvestri - Skiritai Capital - Analyst
Okay. So I mean, normally — normal seasonality — there was nothing in this one quarter that was outside of — anything major — normal seasonality? I mean, normal seasonality, I understand that you can’t predict it and all. But normal seasonality in your business is historically Q1 and Q2 has been the low point of the year. Correct?
Neil Wilkin - Optical Cable Corporation - President and CEO
Right. I mean, traditionally first quarter and second quarter have been the low point of the year —
Russ Silvestri - Skiritai Capital - Analyst
Okay.
Neil Wilkin - Optical Cable Corporation - President and CEO
Portion of the year — we’re going to be filing our 10-Q and one thing that you’ll notice is that we did have, as I mentioned before, a couple of larger orders in the first quarter. And those positively influenced Q1. But even without those orders we would have had a good Q1. So I think that — what does the rest of the year hold? This was an unusually good quarter for a first quarter. I’m not prepared to say whether second quarter would be higher or lower. We’re working to continue the pace we’re at, but we’ll just have to see how things play out based on when projects fall.
Russ Silvestri - Skiritai Capital - Analyst
Okay. Last question, then. In terms of your gain and year-over-year wise, I mean is it a gain of market share, increase in the market or can you talk a little bit about what’s driving that?
Neil Wilkin - Optical Cable Corporation - President and CEO
I think the market still continues to grow a little bit. I don’t have the latest market figures that we look at to see whether we’ve gained market share. And so I can’t really divide it into those two categories for you. I mean, the one thing that OCC has is we’re uniquely positioned for certain market segments within the enterprise fiber optic cable market and we continue to see those segments as being strong and we expect that to continue.
Russ Silvestri - Skiritai Capital - Analyst
Thank you.
Operator
Thank you. At this time there appears to be no further questions. I’ll turn the floor back over to Andrew Siegel.
Andrew Siegel - Joele Frank, Wilkinson Brimmer Katcher - IR
Okay, Neil. We do have some questions this morning from an individual shareholder. His question — it’s from Paul Benesch. His questions — there’s three parts, first he asks about the structure of your sales department and whether the changes you’ve made there have contributed to the increases in net sales over the last two quarters.
Second, he asked if the net sales do continue to increase, if you could talk to any economies of scale that you might achieve including with your ERP system and how this might impact the bottom line. And finally, he asked about the economic stimulus package and if you could talk about any impact that might have on your business.
Neil Wilkin - Optical Cable Corporation - President and CEO
Okay. Well, taking the first question, we have made some changes in our sales department, although we haven’t made a lot of changes recently.
On the international side, we did a little bit of rearranging and there’s been some significant effort that has been made there and we’ve seen the benefit of that. We have benefited, obviously, from the weak dollar, but more importantly, the efforts of our international sales folks have really provided some growth for OCC. On the domestic side, we continue to work hard and have good relationships with our distributors. And we’re working to continue those efforts and to grow sales domestically as well. I think the second question was about the economies of scale of our ERP system.
Andrew Siegel - Joele Frank, Wilkinson Brimmer Katcher - IR
Yes, that’s right.
Neil Wilkin - Optical Cable Corporation - President and CEO
We do — I think one of the things that was hard for people to see during the last — our investors to see the last couple of years was that the investments we were making were made in order to gain some of the benefits we’re seeing now. And I’m excited that that’s starting to pay off. We have been able to keep SG&A costs under control, we’ve made investments out of working capital to improve our facilities and our efficiency.
And as sales increased, just as we saw in the first quarter, small — even small or large increases, whatever increase we have in sales ends up dropping a lot of additional dollars to the bottom line. And I think that strategy is a correct — was a correct one and we believe the results in the first quarter showed that and I hope that continues for the rest of the year.
The last question, I think, was on the federal government’s economic stimulus package, is what it sounded like. There are some provisions in that package that have just recently been signed that accelerate expensing for small businesses and accelerate some depreciation for certain expenditures. That may — that may or may not positively impact us. It’s going to be — we haven’t seen that yet.
Of course, the issue when people are encouraged to expand their CapEx expenditures — what do they spend it on? And so, if that’s IT spending then we’re going to benefit from that. If they happen to be spending on something else then we may not see as much of a benefit. So I don’t know precisely if that’s going to significantly benefit us. The weak dollar and while it’s not good for the overall U.S. economy, it is benefiting manufacturing in the U.S. and we are seeing the benefit of that. But the economic stimulus package, I’m not — at this point we’re not quite sure how that’s going to impact us. It won’t hurt us, obviously, but we’ll have to see whether it really benefits us significantly.
Andrew Siegel - Joele Frank, Wilkinson Brimmer Katcher - IR
Okay. Thanks, Neil. Well, I’ll turn it back over to you for closing remarks.
Neil Wilkin - Optical Cable Corporation - President and CEO
Thanks, Andrew. I appreciate everyone participating on our call today. We had a few less questions than we normally do. But we appreciate those folks who have participated and those that are listening to the call. And we are working hard here to create additional value for our shareholders and we’re going to continue to do that. Thank you.
Operator
Thank you. This does conclude today’s Optical Cable Corp. conference call. You may now disconnect and have a great day.