Optical Cable (OCC) - 2025 Q3 - Quarterly Results

Report Highlights This section provides a concise overview of Optical Cable Corporation's key financial achievements for the third quarter and first nine months of fiscal year 2025 Third Quarter 2025 Key Financial Highlights Optical Cable Corporation (OCC) reported substantial year-over-year growth in net sales and gross profit for the third quarter of fiscal year 2025, with net sales increasing 22.8% and gross profit increasing 61.2% - OCC reported substantial year-over-year growth in net sales and gross profit for both the third quarter and the first nine months of fiscal year 2025[2] Q3 FY2025 Key Financial Highlights (YoY) | Metric | Q3 FY2025 | Q3 FY2024 | Change (%) | | :----- | :-------- | :-------- | :--------- | | Net Sales | $19.9M | $16.2M | +22.8% | | Gross Profit | $6.3M | $3.9M | +61.2% | - The company experienced an increase in net sales in both its enterprise and specialty markets, and continues to see general market improvement, including strengthening in military and severe duty markets[3] Detailed Financial Results This section presents a comprehensive analysis of OCC's financial performance for the third quarter and year-to-date fiscal year 2025, covering sales, profit, and expenses Third Quarter 2025 Performance OCC demonstrated strong financial performance in Q3 FY2025, marked by significant year-over-year and sequential growth in net sales and gross profit, leading to a return to net income Net Sales Analysis This subsection details OCC's net sales performance for Q3 FY2025, including year-over-year and sequential growth, and geographic contributions Net Sales Performance (Q3 FY2025) | Metric | Q3 FY2025 | Q3 FY2024 | Change (%) | | :----- | :-------- | :-------- | :--------- | | Net Sales (YoY) | $19.9M | $16.2M | +22.8% | | Net Sales (Sequential) | $19.9M | $17.5M (Q2 FY2025) | +13.5% | Geographic Net Sales Growth (Q3 FY2025 YoY) | Region | Change (%) | | :----- | :--------- | | United States | +22.0% | | Outside US | +26.2% | - Sales order backlog/forward load was $7.1 million at the end of Q3 FY2025, compared to $7.2 million as of April 30, 2025, $6.6 million as of January 31, 2025, and $5.7 million as of October 31, 2024[5] Gross Profit and Margin This subsection analyzes OCC's gross profit and margin for Q3 FY2025, highlighting year-over-year and sequential changes and contributing factors Gross Profit Performance (Q3 FY2025) | Metric | Q3 FY2025 | Q3 FY2024 | Change ($) | Change (%) | | :----- | :-------- | :-------- | :--------- | :--------- | | Gross Profit (YoY) | $6.3M | $3.9M | +$2.4M | +61.2% | | Gross Profit (Sequential) | $6.3M | $5.3M (Q2 FY2025) | +$1.0M | +18.5% | Gross Profit Margin (Q3 FY2025) | Metric | Q3 FY2025 | Q3 FY2024 | Q2 FY2025 | | :----- | :-------- | :-------- | :-------- | | Margin | 31.7% | 24.2% | 30.4% | - Gross profit benefited from production efficiencies driven by increased volumes and the positive impact of OCC's operating leverage[6] Operating Expenses and Profitability This subsection examines OCC's operating expenses and overall profitability for Q3 FY2025, including SG&A and net income/loss - SG&A expenses increased 9.5% to $5.7 million in Q3 FY2025 (from $5.2 million in Q3 FY2024), primarily due to increases in employee and contracted sales personnel-related costs and shipping costs associated with net sales growth[8] Net Income (Loss) and EPS (Q3 FY2025 YoY) | Metric | Q3 FY2025 | Q3 FY2024 | | :----- | :-------- | :-------- | | Net Income (Loss) | $302,000 | ($1.6M) | | Basic & Diluted EPS | $0.04 | ($0.20) | Fiscal Year-to-Date 2025 Performance For the first nine months of fiscal year 2025, OCC achieved significant year-over-year growth in net sales and gross profit, leading to a substantial reduction in net loss compared to the prior year Net Sales Analysis (YTD) This subsection details OCC's net sales performance for the first nine months of FY2025, including year-over-year growth and market impacts Net Sales Performance (9M FY2025 YoY) | Metric | 9M FY2025 | 9M FY2024 | Change (%) | | :----- | :-------- | :-------- | :--------- | | Net Sales | $53.2M | $47.2M | +12.8% | Geographic Net Sales Growth (9M FY2025 YoY) | Region | Change (%) | | :----- | :--------- | | United States | +9.8% | | Outside US | +24.9% | - Net sales were positively impacted by general market improvements, including particular strength in OCC's military and severe duty markets[11] Gross Profit and Margin (YTD) This subsection analyzes OCC's gross profit and margin for the first nine months of FY2025, highlighting year-over-year changes Gross Profit Performance (9M FY2025 YoY) | Metric | 9M FY2025 | 9M FY2024 | Change (%) | | :----- | :-------- | :-------- | :--------- | | Gross Profit | $16.3M | $11.7M | +39.5% | Gross Profit Margin (9M FY2025 YoY) | Metric | 9M FY2025 | 9M FY2024 | | :----- | :-------- | :-------- | | Margin | 30.6% | 24.7% | Operating Expenses and Profitability (YTD) This subsection examines OCC's operating expenses and overall profitability for the first nine months of FY2025, including SG&A and net loss - SG&A expenses increased 8.2% to $16.9 million in 9M FY2025 (from $15.7 million in 9M FY2024), primarily due to increases in employee and contracted sales personnel-related costs and shipping costs[13] Net Loss and EPS (9M FY2025 YoY) | Metric | 9M FY2025 | 9M FY2024 | | :----- | :-------- | :-------- | | Net Loss | ($1.5M) | ($4.6M) | | Basic & Diluted EPS | ($0.19) | ($0.59) | Strategic Initiatives This section outlines OCC's recent strategic actions, including a key collaboration agreement and associated investment aimed at expanding market reach Strategic Collaboration and Investment OCC announced a strategic collaboration agreement with Lightera, LLC to expand product offerings and solutions in the enterprise and data center sectors, which included Lightera making an investment in OCC - On July 7, 2025, OCC and Lightera, LLC announced a strategic collaboration agreement to expand product offerings and solutions to the enterprise sector, the data center sector, as well as an expanded presence in other sectors[15] - The collaboration involves combining portions of product portfolios to deliver additional integrated cabling and connectivity solution offerings, including certain Lightera products being offered and sold by OCC[15] - Lightera made an investment in OCC, purchasing shares of common stock and holding 7.24% of the Company's outstanding shares[16] Management Outlook This section provides insights from OCC's CEO regarding the company's recent performance, operational leverage, and future growth prospects CEO's Commentary Neil Wilkin, President and CEO, highlighted Q3 as a strong quarter with significant net sales growth and gross profit expansion, driven by increased demand and operating leverage. He expressed confidence in the company's long-term growth strategy and anticipated further opportunities from the Lightera collaboration - OCC delivered significant net sales growth and gross profit expansion during both the third quarter and first nine months, capturing additional opportunities as demand increased[17] - The company saw benefits of significant operating leverage, with a 22.8% year-over-year increase in net sales driving 61.2% gross profit growth[17] - Management anticipates the strategic collaboration with Lightera will provide additional growth opportunities and is confident in OCC's market positioning to capture growth and create shareholder value[17] Corporate Information This section provides essential background on Optical Cable Corporation, including its business scope, innovative technologies, and a disclaimer on forward-looking statements Company Profile Optical Cable Corporation (OCC) is a leading manufacturer of fiber optic and copper data communication cabling and connectivity solutions, serving enterprise, harsh environment, specialty, and wireless carrier markets, recognized for pioneering innovative technologies - OCC is a leading manufacturer of a broad range of fiber optic and copper data communication cabling and connectivity solutions primarily for the enterprise market and various harsh environment and specialty markets, and also the wireless carrier market[19] - The company is internationally recognized for pioneering innovative fiber optic and copper communications technologies, offering integrated suites of high-quality products[19][20] - OCC's solutions cover a broad range of applications including commercial, enterprise network, datacenter, residential, campus installations, and customized products for military, industrial, mining, petrochemical, broadcast, and wireless carrier markets[21] Forward-Looking Statements This section serves as a disclaimer regarding forward-looking information, highlighting inherent risks and uncertainties that could cause actual results to differ materially from expectations, and states that the company disclaims any obligation to update such information - The news release may contain forward-looking information concerning the company's outlook, beliefs, future plans, strategies, and anticipated events[24] - Such information is subject to known and unknown variables, uncertainties, contingencies, and risks that may cause actual events or results to differ materially from expectations[24] - The Company expressly disclaims any obligation to update this information, whether as a result of new information, future events or otherwise, except as required by applicable laws and regulations[24] Financial Tables This section presents the unaudited condensed consolidated financial statements, including statements of operations and balance sheet data for specified periods Condensed Consolidated Statements of Operations This table presents the unaudited condensed consolidated statements of operations for the three and nine months ended July 31, 2025, and 2024, detailing revenue, costs, expenses, and net income/loss Condensed Consolidated Statements of Operations (Q3 and 9M FY2025, in thousands) | | Three Months Ended | | | Nine Months Ended | | | :--- | :--- | :--- | :--- | :--- | :--- | | | July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | | Net sales | $19,917 | $16,222 | $53,209 | $47,188 | | Cost of goods sold | 13,598 | 12,302 | 36,929 | 35,516 | | Gross profit | 6,319 | 3,920 | 16,280 | 11,672 | | SG&A expenses | 5,737 | 5,237 | 16,939 | 15,650 | | Royalty expense, net | 7 | 7 | 20 | 20 | | Amortization of intangible assets | 13 | 13 | 40 | 40 | | Income (loss) from operations | 562 | (1,337) | (719) | (4,038) | | Interest expense, net | (260) | (301) | (772) | (881) | | Gain on insurance proceeds, net | — | 90 | — | 309 | | Other, net | 4 | (2) | 19 | 47 | | Other income (expense), net | (256) | (213) | (753) | (525) | | Income (loss) before income taxes | 306 | (1,550) | (1,472) | (4,563) | | Income tax expense | 4 | 7 | 31 | 21 | | Net income (loss) | $302 | $(1,557) | $(1,503) | $(4,584) | | Net income (loss) per share: | | | | | | Basic and diluted | $0.04 | $(0.20) | $(0.19) | $(0.59) | | Weighted average shares outstanding: | | | | | | Basic and diluted | 8,395 | 7,739 | 7,901 | 7,753 | Condensed Consolidated Balance Sheet Data This table provides unaudited condensed consolidated balance sheet data as of July 31, 2025, and October 31, 2024, detailing assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheet Data (July 31, 2025 vs. October 31, 2024, in thousands) | | July 31, 2025 | October 31, 2024 | | :--- | :--- | :--- | | Cash | $421 | $244 | | Trade accounts receivable, net | 11,078 | 10,946 | | Inventories | 18,697 | 18,725 | | Other current assets | 492 | 685 | | Total current assets | 30,688 | 30,600 | | Non-current assets | 9,480 | 9,758 | | Total assets | $40,168 | $40,358 | | Current liabilities | $16,959 | $15,144 | | Non-current liabilities | 1,777 | 4,372 | | Total liabilities | 18,736 | 19,516 | | Redeemable common stock | 3,202 | — | | Total shareholders' equity | 18,230 | 20,842 | | Total liabilities, redeemable common stock and shareholders' equity | $40,168 | $40,358 | Investor Relations This section provides details for investors regarding the company's conference call to discuss financial results and access information Conference Call Details This section provides information for the conference call to discuss the third quarter fiscal year 2025 financial results, including access details and replay options - OCC hosted a conference call on September 11, 2025, at 4:15 p.m. Eastern Time[18] - Participants could join by calling (800) 274-8461 (U.S.) or (203) 518-9814 (internationally), using Conference ID: OCCQ325[18] - A replay was available through September 18, 2025, by dialing (800) 934-8233 or (402) 220-6991, and the call was also broadcast live over the internet via www.occfiber.com[18](index=18&type=chunk)