• OCC's current regular quarterly dividend rate is $0.02 per share per
quarter, implying an annual dividend rate of $0.08 per share.
Results of Operations
We sell our products internationally and domestically through our sales force to
our customers, which include major distributors, various regional and smaller
distributors, original equipment manufacturers and value-added resellers. All of
our sales to customers outside of the United States are denominated in U.S.
dollars. We can experience fluctuations in the percentage of net sales to
customers outside of the United States and in the United States from period to
period based on the timing of large orders, coupled with the impact of increases
and decreases in sales to customers in various regions of the world.
Net sales consist of gross sales of products less discounts, refunds and
returns. Revenue is recognized at the time of product shipment or delivery to
the customer (including distributors) provided that the customer takes ownership
and assumes risk of loss (based on shipping terms), collection of the relevant
receivable is probable, persuasive evidence of an arrangement exists and the
sales price is fixed or determinable. Our customers generally do not have the
right of return unless a product is defective or damaged and is within the
parameters of the product warranty in effect for the sale.
Cost of goods sold consists of the cost of materials, product warranty costs and
compensation costs, and overhead and other costs related to our manufacturing
operations. The largest percentage of costs included in cost of goods sold is
attributable to costs of materials.
Our gross profit margin percentages are heavily dependent upon product mix on a
quarterly basis and may vary based on both anticipated and unanticipated changes
in product mix. Additionally, gross profit margins tend to be higher when we
achieve higher net sales levels, as certain fixed manufacturing costs are spread
over higher sales volumes.
Selling, general and administrative expenses ("SG&A expenses") consist of the
compensation costs for sales and marketing personnel, shipping costs, trade show
expenses, customer support expenses, travel expenses, advertising, bad debt
expense, the compensation costs for administration and management personnel,
legal and accounting fees, costs incurred to settle litigation or claims and
other actions against us, and other costs associated with our operations.
Royalty income (expense), net consists of royalty income earned on licenses
associated with our patented products, net of royalty and related expenses.
Amortization of intangible assets consists primarily of the amortization of
developed technology acquired in the acquisition of Superior Modular Products
Incorporated, doing business as SMP Data Communications ("SMP Data
Communications" or "SMP") on May 30, 2008 and the amortization of intellectual
property and customer list acquired in the acquisition of AOS on October 31,
2009. Amortization of intangible assets is calculated using an accelerated
method and the straight line method over the estimated useful lives of the
Other income (expense), net consists of interest expense and other miscellaneous
income and expense items not directly attributable to our operations.