PART I. FINANCIAL INFORMATION Presents the unaudited condensed consolidated financial statements and related disclosures for the company [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Kewaunee Scientific Corporation's unaudited condensed consolidated financial statements, including statements of operations, comprehensive earnings, stockholders' equity, balance sheets, and cash flows, along with detailed notes explaining accounting policies, significant transactions like the Nu Aire acquisition, and financial instrument valuations for the three months ended July 31, 2025, and comparative periods [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Summarizes the company's net sales, gross profit, operating profit, and net earnings for the three months ended July 31, 2025 and 2024 | Metric | Three Months Ended July 31, 2025 ($ thousands) | Three Months Ended July 31, 2024 ($ thousands) | YoY Change (%) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------- | | Net sales | 71,104 | 48,393 | 46.9% | | Cost of products sold | 50,174 | 35,905 | 39.7% | | Gross profit | 20,930 | 12,488 | 67.6% | | Operating expenses | 16,120 | 9,913 | 62.6% | | Operating profit | 4,810 | 2,575 | 86.8% | | Profit before income taxes | 3,920 | 2,430 | 61.3% | | Income tax expense | 761 | 192 | 296.4% | | Net earnings | 3,159 | 2,238 | 41.2% | | Net earnings attributable to Kewaunee Scientific Corporation | 3,093 | 2,193 | 41.0% | | Basic EPS | 1.08 | 0.77 | 40.3% | | Diluted EPS | 1.04 | 0.74 | 40.5% | [Condensed Consolidated Statements of Comprehensive Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Earnings) Presents net earnings and other comprehensive income/loss, including foreign currency adjustments, for the three months ended July 31, 2025 and 2024 | Metric | Three Months Ended July 31, 2025 ($ thousands) | Three Months Ended July 31, 2024 ($ thousands) | YoY Change (%) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------- | | Net earnings | 3,159 | 2,238 | 41.2% | | Foreign currency translation adjustments | (410) | (116) | 253.4% | | Other comprehensive loss | (410) | (116) | 253.4% | | Comprehensive earnings, net of tax | 2,749 | 2,122 | 29.5% | | Comprehensive earnings attributable to Kewaunee Scientific Corporation | 2,683 | 2,077 | 29.2% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Details changes in stockholders' equity, including retained earnings and accumulated other comprehensive loss, between April 30, 2025 and July 31, 2025 | Metric | As of July 31, 2025 ($ thousands) | As of April 30, 2025 ($ thousands) | Change ($ thousands) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------- | | Total Kewaunee Scientific Corporation Stockholders' Equity | 67,078 | 64,457 | 2,621 | | Retained Earnings | 62,012 | 58,919 | 3,093 | | Accumulated Other Comprehensive Loss | (4,213) | (3,803) | (410) | - Net earnings attributable to Kewaunee Scientific Corporation for the three months ended July 31, 2025, were **$3,093 thousand**, contributing to the increase in retained earnings[16](index=16&type=chunk) - Other comprehensive loss for the three months ended July 31, 2025, was **$(410) thousand**[16](index=16&type=chunk) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Outlines the company's financial position, including assets, liabilities, and equity, as of July 31, 2025 and April 30, 2025 | Metric | As of July 31, 2025 ($ thousands) | As of April 30, 2025 ($ thousands) | Change ($ thousands) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------- | | Total Current Assets | 117,148 | 118,363 | (1,215) | | Total Assets | 193,486 | 194,654 | (1,168) | | Total Current Liabilities | 50,486 | 53,712 | (3,226) | | Total Liabilities | 124,617 | 128,409 | (3,792) | | Total Stockholders' Equity | 68,869 | 66,245 | 2,624 | | Cash and cash equivalents | 19,489 | 14,942 | 4,547 | | Receivables, net | 56,897 | 62,384 | (5,487) | | Inventories | 34,923 | 32,849 | 2,074 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the three months ended July 31, 2025 and 2024 | Metric | Three Months Ended July 31, 2025 ($ thousands) | Three Months Ended July 31, 2024 ($ thousands) | Change ($ thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------- | | Net cash provided by (used in) operating activities | 5,791 | (794) | 6,585 | | Net cash used in investing activities | (771) | (278) | (493) | | Net cash (used in) provided by financing activities | (1,463) | 343 | (1,806) | | Increase (decrease) in cash, cash equivalents and restricted cash | 3,277 | (752) | 4,029 | | Cash, cash equivalents and restricted cash, end of period | 20,441 | 25,186 | (4,745) | - Operating activities provided **$5,791 thousand** in cash for the three months ended July 31, 2025, a substantial improvement from **$794 thousand** used in the prior year[21](index=21&type=chunk) - Capital expenditures increased to **$771 thousand** for the three months ended July 31, 2025, from **$278 thousand** in the prior year[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, acquisitions, and financial instruments [A. Financial Information](index=11&type=section&id=A.%20Financial%20Information) Clarifies the basis of preparation for unaudited interim financial statements and their relation to the annual report - The interim financial statements are unaudited and prepared under SEC rules, condensing GAAP disclosures, and should be read in conjunction with the Company's 2025 Annual Report on Form 10-K[26](index=26&type=chunk)[27](index=27&type=chunk) - Interim results are not necessarily indicative of full-year results, and management's estimates and assumptions are subject to actual results differing[27](index=27&type=chunk)[28](index=28&type=chunk) [B. Cash, Cash Equivalents and Restricted Cash](index=11&type=section&id=B.%20Cash,%20Cash%20Equivalents%20and%20Restricted%20Cash) Details the composition of cash, cash equivalents, and restricted cash, including performance guarantee amounts - Restricted cash includes bank deposits of subsidiaries used for performance guarantees against customer orders[29](index=29&type=chunk) | Metric | July 31, 2025 ($ thousands) | April 30, 2025 ($ thousands) | | :-------------------------------------- | :-------------------------- | :--------------------------- | | Cash and cash equivalents | 19,489 | 14,942 | | Restricted cash | 952 | 2,222 | | Total cash, cash equivalents and restricted cash | 20,441 | 17,164 | [C. Nu Aire Acquisition](index=11&type=section&id=C.%20Nu%20Aire%20Acquisition) Describes the Nu Aire, Inc. acquisition, its financial impact, purchase price allocation, and pro forma information - Kewaunee Scientific Corporation acquired Nu Aire, Inc. on November 1, 2024, for **$53.0 million**, expanding its capabilities in laboratory furnishings and technical products[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The acquisition was funded by **$29.669 million** cash and **$23.0 million** in subordinated seller notes[32](index=32&type=chunk)[33](index=33&type=chunk) - Nu Aire contributed **$19.7 million** in revenue and **$696,000** in net earnings for the three months ended July 31, 2025[37](index=37&type=chunk) Nu Aire Purchase Price Allocation (as of July 31, 2025) | Asset/Liability | Final Allocation ($ thousands) | | :-------------------------------- | :----------------------------- | | Cash and cash equivalents | 1,245 | | Receivables | 10,650 | | Inventories | 15,522 | | Property, plant and equipment | 7,349 | | Other intangible assets | 18,600 | | Goodwill | 12,487 | | Total assets acquired | 74,088 | | Total liabilities assumed | (21,108) | | Aggregate acquisition consideration | 52,980 | Pro Forma Financial Information (Three Months Ended July 31, 2024, as if Nu Aire acquired May 1, 2023) | Metric | 2025 (actual) ($ thousands) | 2024 (pro forma) ($ thousands) | | :------------------------------------------ | :-------------------------- | :----------------------------- | | Net sales | 71,104 | 65,448 | | Net earnings | 3,093 | 4,273 | | Basic EPS | 1.08 | 1.50 | | Diluted EPS | 1.04 | 1.44 | [D. Revenue Recognition](index=14&type=section&id=D.%20Revenue%20Recognition) Explains revenue recognition policies, disaggregated revenue by type and geography, and deferred revenue balances - The majority of the Company's revenues are recognized over time as the customer receives control, with a portion recognized at a distinct point in time[41](index=41&type=chunk) Disaggregated Revenue (Three Months Ended July 31) | Revenue Type | July 31, 2025 Domestic ($ thousands) | July 31, 2025 International ($ thousands) | July 31, 2025 Total ($ thousands) | July 31, 2024 Domestic ($ thousands) | July 31, 2024 International ($ thousands) | July 31, 2024 Total ($ thousands) | | :----------- | :----------------------------------- | :---------------------------------------- | :-------------------------------- | :----------------------------------- | :---------------------------------------- | :-------------------------------- | | Over Time | 32,713 | 16,752 | 49,465 | 34,389 | 12,870 | 47,259 | | Point in Time | 21,639 | — | 21,639 | 1,134 | — | 1,134 | | Total | 54,352 | 16,752 | 71,104 | 35,523 | 12,870 | 48,393 | - Deferred revenue at July 31, 2025, was **$4,983 thousand**, with approximately **100%** expected to be recognized as revenue in the succeeding **12 months**[43](index=43&type=chunk) [E. Inventories](index=14&type=section&id=E.%20Inventories) Outlines the valuation method and composition of inventories, including finished products, work in process, and raw materials - Inventories are measured using the first-in, first-out (FIFO) method at the lower of cost or net realizable value[44](index=44&type=chunk) Inventories Composition | Inventory Type | July 31, 2025 ($ thousands) | April 30, 2025 ($ thousands) | | :------------- | :-------------------------- | :--------------------------- | | Finished products | 6,056 | 5,543 | | Work in process | 6,827 | 3,784 | | Raw materials | 22,040 | 23,522 | | Total | 34,923 | 32,849 | [F. Fair Value of Financial Instruments](index=15&type=section&id=F.%20Fair%20Value%20of%20Financial%20Instruments) Discusses fair value measurement of financial instruments and their classification within the fair value hierarchy - The carrying value of the Company's financial instruments, including cash, mutual funds, and debt, approximates their fair value[45](index=45&type=chunk) Fair Value Hierarchy (July 31, 2025) | Financial Assets | Level 1 ($ thousands) | Level 2 ($ thousands) | Total ($ thousands) | | :------------------------------------------------- | :-------------------- | :-------------------- | :------------------ | | Trading securities held in non-qualified compensation plans | 2,340 | — | 2,340 | | Cash surrender value of life insurance policies | — | 1,514 | 1,514 | | Total Financial Assets | 2,340 | 1,514 | 3,854 | | Financial Liabilities | | | | | Non-qualified compensation plans | — | 4,334 | 4,334 | | Total Financial Liabilities | — | 4,334 | 4,334 | [G. Goodwill and Other Intangible Assets](index=15&type=section&id=G.%20Goodwill%20and%20Other%20Intangible%20Assets) Details goodwill from the Nu Aire acquisition and the composition, useful lives, and amortization of other intangible assets - Goodwill of approximately **$12.5 million** was recorded from the Nu Aire Acquisition, with no impairment losses during the three months ended July 31, 2025[45](index=45&type=chunk) Intangible Assets (July 31, 2025) | Intangible Asset | Estimated Useful Life | Gross Carrying Amount ($ thousands) | Accumulated Amortization ($ thousands) | Net Book Value ($ thousands) | | :----------------------- | :-------------------- | :---------------------------------- | :------------------------------------- | :--------------------------- | | Customer relationships | **10 years** | 9,800 | (735) | 9,065 | | Trade names and trademarks | indefinite | 4,900 | — | 4,900 | | Developed technology | **7 years** | 3,900 | (418) | 3,482 | | Total | | 18,600 | (1,153) | 17,447 | Expected Future Amortization Expense (excluding trade names and trademarks) | Fiscal Year | Amortization Expense ($ thousands) | | :------------------ | :------------------------------- | | Remainder of fiscal 2026 | 1,153 | | 2027 | 1,537 | | 2028 | 1,537 | | 2029 | 1,537 | | 2030 | 1,537 | | Thereafter | 5,246 | | Total | 12,547 | [H. Long-term Debt and Other Credit Arrangements](index=16&type=section&id=H.%20Long-term%20Debt%20and%20Other%20Credit%20Arrangements) Describes long-term debt, including the PNC Loan Agreement, Subordinated Seller Notes, and other credit facilities Long-term Debt Components | Debt Type | July 31, 2025 ($ thousands) | April 30, 2025 ($ thousands) | | :---------------- | :-------------------------- | :--------------------------- | | PNC Loan Agreement | 13,000 | 13,750 | | Seller Notes | 24,380 | 23,935 | | Total long-term debt | 37,380 | 37,685 | - The PNC Loan Agreement includes a **$20.0 million** Revolving Credit Facility (unused at July 31, 2025) and a **$15.0 million** Term Loan, both maturing on November 1, 2029[49](index=49&type=chunk)[51](index=51&type=chunk) - Subordinated Seller Notes of **$23.0 million**, accruing **8%** interest per annum, mature on November 1, 2027, and are subordinate to PNC's rights[53](index=53&type=chunk)[55](index=55&type=chunk) - International subsidiaries had **$495,000** in short-term borrowings at July 31, 2025[57](index=57&type=chunk) [I. Sale-Leaseback Financing Transaction](index=17&type=section&id=I.%20Sale-Leaseback%20Financing%20Transaction) Explains the headquarters sale-leaseback as a financing transaction, detailing associated liabilities and interest expense - The sale-leaseback arrangement for the Company's headquarters was accounted for as a financing transaction due to the lease being classified as a finance lease, indicating control of the property did not transfer[60](index=60&type=chunk)[62](index=62&type=chunk) - The carrying value of the financing liability was **$27,227 thousand** at July 31, 2025, with **$807 thousand** classified as current[63](index=63&type=chunk) - Interest expense associated with the financing arrangement was **$308 thousand** for the three months ended July 31, 2025[63](index=63&type=chunk) [J. Leases](index=18&type=section&id=J.%20Leases) Provides information on right-of-use assets, lease liabilities, and future minimum payments for operating and financing leases - Right-of-use assets totaled **$12,022 thousand** at July 31, 2025, for operating and financing leases[66](index=66&type=chunk) - Operating cash paid to settle lease liabilities was **$1,040 thousand** for the three months ended July 31, 2025, and operating lease expense was **$1,458 thousand**[66](index=66&type=chunk) Future Minimum Lease Payments (July 31, 2025) | Fiscal Year | Operating ($ thousands) | Financing ($ thousands) | | :------------------ | :---------------------- | :---------------------- | | Remainder of fiscal 2026 | 2,843 | 94 | | 2027 | 3,345 | 40 | | 2028 | 2,462 | 40 | | 2029 | 2,108 | 40 | | 2030 | 1,630 | 40 | | Thereafter | 160 | 22 | | Total Minimum Lease Payments | 12,548 | 276 | | Imputed Interest | (1,403) | (45) | | Total | 11,145 | 231 | [K. Stockholders' Equity](index=19&type=section&id=K.%20Stockholders'%20Equity) Details the number of outstanding common shares and the company's share repurchase program - As of July 31, 2025, there were approximately **2,865,000 shares** of Common Stock outstanding[69](index=69&type=chunk) - The Board of Directors amended the share repurchase program on March 12, 2025, authorizing an additional **100,000 shares**[71](index=71&type=chunk) - No shares were repurchased under the program during the three months ended July 31, 2025, with **100,603 shares** remaining authorized for purchase[71](index=71&type=chunk) [L. Earnings Per Share](index=19&type=section&id=L.%20Earnings%20Per%20Share) Explains basic and diluted earnings per share calculation and reconciliation of weighted average common shares outstanding - Basic EPS is based on the weighted average number of common shares outstanding, while diluted EPS reflects the assumed exercise of outstanding options and conversion of restricted stock units (RSUs)[72](index=72&type=chunk) Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding | Metric | Three Months Ended July 31, 2025 (thousands) | Three Months Ended July 31, 2024 (thousands) | | :------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Basic | 2,851 | 2,849 | | Dilutive effect of stock options and RSUs | 112 | 118 | | Weighted average common shares outstanding - diluted | 2,963 | 2,967 | [M. Stock Options and Stock-based Compensation](index=20&type=section&id=M.%20Stock%20Options%20and%20Stock-based%20Compensation) Describes the company's stock incentive plans, RSU grants, and stock-based compensation expense - The 2023 Omnibus Incentive Plan replaced the 2017 Plan, reserving **374,633 shares** for issuance, with **291,326 shares** available at July 31, 2025[74](index=74&type=chunk) - The Company granted **72,728 RSUs** in June 2025, vesting over **three years** with service and performance components[75](index=75&type=chunk) - Stock-based compensation expense was **$431 thousand** for the three months ended July 31, 2025, with **$3,877 thousand** remaining to be recorded[75](index=75&type=chunk) [N. Income Taxes](index=20&type=section&id=N.%20Income%20Taxes) Presents income tax expense, effective tax rates, and the impact of discrete tax benefits and new tax legislation Income Tax Expense and Effective Tax Rate | Metric | Three Months Ended July 31, 2025 ($ thousands) | Three Months Ended July 31, 2024 ($ thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | Income tax expense | 761 | 192 | | Effective tax rate | 19.4% | 7.9% | - The effective tax rate for Q1 FY2026 (**19.4%**) reflects foreign operations' tax rates and a **$303 thousand** discrete tax benefit from RSU vesting[76](index=76&type=chunk) - The U.S. government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, and the Company is evaluating its potential impact on future tax obligations[78](index=78&type=chunk) [O. Segment Information](index=21&type=section&id=O.%20Segment%20Information) Provides financial data disaggregated by domestic and international operating segments, evaluated by earnings before income taxes - The Company operates in two business segments: Domestic (including the Nu Aire acquisition) and International, with the CEO evaluating performance based on earnings before income taxes[79](index=79&type=chunk)[80](index=80&type=chunk) Segment Financial Information (Three Months Ended July 31, 2025 vs. 2024) | Metric | Domestic Operations 2025 ($ thousands) | International Operations 2025 ($ thousands) | Total 2025 ($ thousands) | Domestic Operations 2024 ($ thousands) | International Operations 2024 ($ thousands) | Total 2024 ($ thousands) | | :------------------------------------ | :------------------------------------- | :------------------------------------------ | :----------------------- | :------------------------------------- | :------------------------------------------ | :----------------------- | | Revenues from external customers | 54,352 | 16,752 | 71,104 | 35,523 | 12,870 | 48,393 | | Depreciation and amortization | 1,428 | 96 | 1,549 | 662 | 107 | 815 | | Interest expense | 313 | 13 | 1,058 | 441 | 21 | 472 | | Earnings (loss) before income taxes | 5,835 | 1,143 | 3,920 | 3,635 | 787 | 2,430 | | Segment assets | 153,302 | 40,184 | 193,486 | 90,235 | 41,783 | 132,018 | [P. New Accounting Standards](index=22&type=section&id=P.%20New%20Accounting%20Standards) Discusses recently issued accounting pronouncements and their expected impact on financial statements - ASU 2023-09, "Improvements for Income Tax Disclosures," is effective for fiscal year 2026, with no significant impact expected[82](index=82&type=chunk) - ASU 2024-03/2025-01, "Expense Disaggregation Disclosures," is effective for annual disclosures in fiscal year 2028 and interim disclosures in fiscal year 2029, with no significant impact expected[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, highlighting the impact of the Nu Aire acquisition on sales and gross profit, discussing liquidity, and outlining the outlook amidst market challenges and strategic growth initiatives [Acquisition of Nu Aire, Inc.](index=22&type=section&id=Acquisition%20of%20Nu%20Aire,%20Inc.) Details the strategic rationale and financial aspects of the Nu Aire acquisition, expanding product offerings - The Nu Aire acquisition, completed November 1, 2024, for **$55.0 million**, significantly expands the Company's product portfolio to include biological safety cabinets, CO2 incubators, and ultralow freezers[85](index=85&type=chunk)[86](index=86&type=chunk) - This acquisition accelerates the Company's vision of becoming a market leader in laboratory furniture and technical products by combining capabilities and leveraging Nu Aire's established distribution partners[87](index=87&type=chunk) [Critical Accounting Estimates](index=22&type=section&id=Critical%20Accounting%20Estimates) Confirms no material changes to critical accounting estimates since the last annual report, except as noted - There have been no material changes to the Company's critical accounting estimates since the 2025 Annual Report on Form 10-K, beyond those set forth in this quarterly report[88](index=88&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Analyzes key financial performance indicators like sales, gross profit, operating expenses, and net earnings for the three months ended July 31, 2025 and 2024 Key Financial Performance Indicators (Three Months Ended July 31) | Metric | 2025 ($ thousands) | 2024 ($ thousands) | YoY Change ($ thousands) | YoY Change (%) | | :-------------------------- | :----------------- | :----------------- | :----------------------- | :------------- | | Sales | 71,104 | 48,393 | 22,711 | 46.9% | | Domestic Sales | 54,352 | 35,523 | 18,829 | 53.0% | | International Sales | 16,752 | 12,870 | 3,882 | 30.2% | | Gross Profit Margin | 29.4% | 25.8% | 3.6 pp | - | | Operating Expenses | 16,120 | 9,913 | 6,207 | 62.6% | | Interest Expense | 1,058 | 472 | 586 | 124.2% | | Income Tax Expense | 761 | 192 | 569 | 296.4% | | Net Earnings | 3,093 | 2,193 | 900 | 41.0% | | Diluted EPS | 1.04 | 0.74 | 0.30 | 40.5% | - Domestic sales increased **53.0%** primarily due to the Nu Aire acquisition, while International sales increased **30.2%** due to large project deliveries[89](index=89&type=chunk) - The Company's order backlog was **$205.0 million** at July 31, 2025, compared to **$159.4 million** at July 31, 2024[90](index=90&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses liquidity sources, working capital, and cash flows from operating, investing, and financing activities - Principal liquidity sources are funds from operating activities and the new PNC Revolving Credit Facility, which replaced the terminated Mid Cap Revolving Credit Facility[97](index=97&type=chunk) Working Capital and Ratios | Metric | July 31, 2025 ($ thousands) | April 30, 2025 ($ thousands) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Working Capital | 66,662 | 64,651 | | Ratio of Current Assets to Current Liabilities | 2.3-to-1.0 | 2.2-to-1.0 | - Operating activities provided **$5,791 thousand** in cash, driven by decreases in receivables, partially offset by increases in inventories and decreases in accounts payable[99](index=99&type=chunk) - Investing activities used **$771 thousand** for capital expenditures, and financing activities used **$1,463 thousand**, primarily for long-term debt servicing[99](index=99&type=chunk) [Outlook](index=24&type=section&id=Outlook) Provides management's expectations for future performance, including project timelines, backlog, and strategic growth initiatives - The Company anticipates some volatility in project delivery timelines for fiscal year 2026 but maintains a strong overall backlog of **$205.0 million**[101](index=101&type=chunk)[90](index=90&type=chunk) - Management is focused on organic and inorganic growth, making strategic investments in people, processes, and technology to support sustainable growth[102](index=102&type=chunk) - The Company believes its strategic investments and healthy backlog position it well to manage short-term headwinds and ensure long-term business health[102](index=102&type=chunk) [Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995](index=24&type=section&id=Safe%20Harbor%20Statement%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) Warns about forward-looking statements, outlining risks and uncertainties that could cause actual results to differ - The document contains forward-looking statements subject to known and unknown risks, uncertainties, and assumptions that could significantly impact results[103](index=103&type=chunk) - Factors that could cause differences include the ability to realize Nu Aire acquisition benefits, competitive and economic conditions, customer demands, technological changes, international operations risks, and raw material costs[103](index=103&type=chunk) - The Company assumes no obligation to update any forward-looking statements[103](index=103&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States no material changes to market risk disclosures from the most recent annual report - No material changes to market risk disclosures compared to the 2025 Annual Report on Form 10-K[104](index=104&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Reports on the effectiveness of disclosure controls and procedures and the ongoing integration of Nu Aire into the control environment - As of July 31, 2025, the Company's disclosure controls and procedures were deemed adequate and effective by management, including the CEO and CFO[105](index=105&type=chunk) - The Company is integrating Nu Aire into its systems and control environment, monitoring and maintaining appropriate internal control over financial reporting during this process[106](index=106&type=chunk) - No other significant changes in internal control over financial reporting occurred during the quarter[106](index=106&type=chunk) PART II. OTHER INFORMATION Contains additional information not covered in financial statements, including risk factors, equity sales, and exhibits [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) Refers to previously disclosed risk factors and notes any updates or new factors impacting the company's business - No material changes to risk factors from the 2025 Annual Report on Form 10-K, except as noted in this quarterly report[109](index=109&type=chunk) - Various known or unknown factors could materially and adversely affect the Company's business, financial condition, operating results, and stock price[109](index=109&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on unregistered sales of equity securities and details the company's share repurchase activities - No unregistered sales of equity securities occurred during the period[110](index=110&type=chunk) - The Company did not purchase any shares under its share repurchase program during the three months ended July 31, 2025, with **100,603 shares** remaining authorized for purchase[111](index=111&type=chunk) [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) Discloses information regarding Rule 10b5-1 trading arrangements by directors and executive officers - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended July 31, 2025[113](index=113&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) Lists all documents filed as exhibits to the Form 10-Q, including certifications and financial data in XBRL format - Exhibits include bylaws, CEO/CFO certifications (Sarbanes-Oxley Act Sections 302 and 906), and Inline XBRL documents for financial data[116](index=116&type=chunk) SIGNATURE Confirms the official signing of the report by an authorized financial officer - The report was signed by Donald T. Gardner III, Vice President, Finance and Chief Financial Officer, on behalf of Kewaunee Scientific Corporation on September 12, 2025[118](index=118&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________ FORM 10-Q ____________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to ________ Commission file number 001-40958 RENT THE RUNWAY, INC. __________________________ ...

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and detailed notes on business activities, accounting policies, and recent acquisitions [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20July%2031%2C%202025%20and%20October%2031%2C%202024) Total assets and liabilities significantly increased from October 2024 to July 2025, driven by higher current assets and liabilities, while stockholders' equity saw a modest rise Unaudited Condensed Consolidated Balance Sheets as of July 31, 2025 and October 31, 2024 | Metric | July 31, 2025 (in USD) | October 31, 2024 (in USD) | Change | | :-------------------------------- | :------------ | :--------------- | :----- | | Total Current Assets | $38,025,548 | $28,373,050 | +34.0% | | Total Assets | $45,879,967 | $34,010,688 | +34.9% | | Total Current Liabilities | $17,046,019 | $6,846,067 | +149.0% | | Total Liabilities | $19,110,502 | $7,833,121 | +144.0% | | Total Stockholders' Equity | $26,769,465 | $26,177,567 | +2.3% | - Significant increase in inventories from **$15,705,984** (Oct 2024) to **$21,685,412** (Jul 2025), and 'Due from broker' from **$1,466,059** to **$4,444,179**[11](index=11&type=chunk) - Introduction of a **$6,250,000** line of credit balance as of July 31, 2025, compared to zero in October 2024[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20and%20nine%20months%20ended%20July%2031%2C%202025%20and%202024) The company reported a net loss for the three months ended July 31, 2025, due to higher cost of sales and operating expenses, and a decrease in net income for the nine months despite higher net sales Three Months Ended July 31 (YoY Comparison) | Metric | 2025 (in USD) | 2024 (in USD) | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Net Sales | $23,910,514 | $18,813,162 | +27.1% | | Cost of Sales | $20,997,777 | $14,887,098 | +41.0% | | Gross Profit | $2,912,737 | $3,926,064 | -25.9% | | Operating Expenses | $4,007,888 | $3,206,201 | +25.0% | | Income (Loss) from Operations | $(1,095,151) | $719,863 | -252.1% | | Net Income (Loss) | $(1,205,413) | $626,796 | -292.5% | | Basic and Diluted EPS | $(0.21) | $0.11 | -290.9% | Nine Months Ended July 31 (YoY Comparison) | Metric | 2025 (in USD) | 2024 (in USD) | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Net Sales | $68,535,860 | $57,349,477 | +19.5% | | Cost of Sales | $55,253,979 | $46,239,134 | +19.5% | | Gross Profit | $13,281,881 | $11,110,343 | +19.5% | | Operating Expenses | $11,897,386 | $9,840,219 | +20.9% | | Income (Loss) from Operations | $1,384,495 | $1,270,124 | +9.0% | | Net Income (Loss) | $591,898 | $955,979 | -38.1% | | Basic and Diluted EPS | $0.10 | $0.17 | -41.2% | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20three%20and%20nine%20months%20ended%20July%2031%2C%202025%20and%202024) Stockholders' equity increased slightly from October 2024 to July 2025, primarily due to net income in the first two quarters of fiscal 2025, partially offset by a third-quarter net loss - Total Stockholders' Equity increased from **$26,177,567** at October 31, 2024, to **$26,769,465** at July 31, 2025[15](index=15&type=chunk) - Retained earnings increased by **$591,898** from October 31, 2024, to July 31, 2025, reflecting the net income for the nine-month period[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20nine%20months%20ended%20July%2031%2C%202025%20and%202024) Operating activities shifted from cash provided to cash used, investing activities used cash due to an acquisition, and financing activities provided substantial cash from increased line of credit borrowings Nine Months Ended July 31 - Cash Flow Summary | Cash Flow Activity | 2025 (in USD) | 2024 (in USD) | | :-------------------------------- | :----------- | :----------- | | Net cash (used in) provided by operating activities | $(5,396,716) | $5,209,235 | | Net cash (used in) provided by investing activities | $(1,254,535) | $2,879,320 | | Net cash provided by (used in) financing activities | $6,250,000 | $(7,724,374) | | Net change in cash and cash equivalents | $(401,251) | $364,181 | | Cash and cash equivalents, end of period | $979,772 | $3,098,158 | - Operating cash flow decreased significantly, primarily due to a **$5,711,012** increase in inventories in 2025 compared to a **$4,480,524** decrease in 2024[18](index=18&type=chunk) - Investing activities in 2025 included an **$800,000** acquisition of Empire Coffee Company and **$375,286** for leasehold improvements[18](index=18&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements, covering business activities, accounting policies, recent acquisitions, and other financial details - The interim financial statements are unaudited and prepared consistently with the annual statements, with no changes to significant accounting policies during the nine months ended July 31, 2025[26](index=26&type=chunk)[28](index=28&type=chunk) - Revenue is recognized according to ASC 606, evaluating the transfer of promised goods or services when the customer obtains control[29](index=29&type=chunk) Revenues by Product Line (Nine Months Ended July 31) | Product Line | 2025 (in USD) | 2024 (in USD) | Change (%) | | :----------- | :----------- | :----------- | :--------- | | Green | $28,731,856 | $25,505,606 | +12.6% | | Packaged | $39,804,004 | $31,843,871 | +25.0% | | Totals | $68,535,860 | $57,349,477 | +19.5% | Revenues by Product Line (Three Months Ended July 31) | Product Line | 2025 (in USD) | 2024 (in USD) | Change (%) | | :----------- | :----------- | :----------- | :--------- | | Green | $10,474,908 | $10,795,701 | -3.0% | | Packaged | $13,435,606 | $8,017,461 | +67.6% | | Totals | $23,910,514 | $18,813,162 | +27.1% | [Note 1 - Business Activities](index=8&type=section&id=Note%201%20-%20Business%20Activities) Coffee Holding Co., Inc. operates as a wholesale coffee roaster and dealer, manufacturing, marketing, and distributing roasted and blended coffees under private labels and its own brands, and selling green coffee - The Company's core business involves wholesale coffee operations, including manufacturing, roasting, packaging, marketing, and distributing roasted and blended coffees for private labels and its own brands, as well as selling green coffee and coffee roasters[20](index=20&type=chunk) - The company's product lines (Wholesale Green Coffee, Private Label Coffee, Branded Coffee) are considered a single reporting segment due to shared customers, manufacturing resources, sales channels, and marketing support[22](index=22&type=chunk) - The company maintains compliance with financial covenants for its line of credit and does not believe there is substantial doubt about its ability to continue as a going concern, reporting net income of **$591,898** and a net working capital surplus of **$20,979,529** for the nine months ended July 31, 2025[23](index=23&type=chunk) [Note 2 – Basis of Presentation and Significant Accounting Policy](index=9&type=section&id=Note%202%20%E2%80%93%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policy) The interim condensed consolidated financial statements are unaudited and prepared consistently with annual statements, with no changes to significant accounting policies during the nine months ended July 31, 2025 [Recent Accounting Pronouncements – Adopted](index=10&type=section&id=Recent%20Accounting%20Pronouncements%20%E2%80%93%20Adopted) The Company adopted ASU 2016-13 (Credit Losses) and ASU 2023-07 (Segment Reporting) during the period, with no material financial statement impact from either - Adoption of ASU 2016-13 (Credit Losses) on November 1, 2023, had no material impact on consolidated financial statements[32](index=32&type=chunk) - Adoption of ASU 2023-07 (Segment Reporting) for fiscal years beginning after December 15, 2023, resulted in enhanced disclosures but no material impact on consolidated financial statements[33](index=33&type=chunk) [Recent Accounting Pronouncements – Not Yet Adopted](index=10&type=section&id=Recent%20Accounting%20Pronouncements%20%E2%80%93%20Not%20Yet%20Adopted) The Company is evaluating the impact of ASU 2023-06 (Disclosure Improvements), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03/2025-01 (Expense Disaggregation Disclosures), with no material impact expected from ASU 2023-06 - The Company does not expect ASU 2023-06 (Disclosure Improvements) to have a material impact[34](index=34&type=chunk) - The Company is currently evaluating the impact of ASU 2023-09 (Improvements to Income Tax Disclosures) and ASU 2024-03/2025-01 (Expense Disaggregation Disclosures)[35](index=35&type=chunk)[37](index=37&type=chunk) [Note 3 – Business Combination](index=11&type=section&id=Note%203%20%E2%80%93%20Business%20Combination) On November 6, 2024, the Company acquired the remaining assets of Empire Coffee Company for **$800,000** through its wholly-owned subsidiary, Second Empire, contributing **$3,238,704** in revenues and a loss of **$694,130** to the Company's results - On November 6, 2024, the Company acquired Empire Coffee Company's remaining assets for **$800,000** via a UCC Chapter 9 sale, through its subsidiary Second Empire[38](index=38&type=chunk) - The acquisition contributed **$3,238,704** in revenues and a loss of **$694,130** to the Company's results from November 6, 2024, to July 31, 2025[39](index=39&type=chunk) Fair Values of Assets Acquired | Asset | Fair Value (in USD) | | :------------------ | :--------- | | Accounts Receivable | $531,585 | | Inventory | $268,415 | | Total Purchase Price | $800,000 | [Note 4 - Inventories](index=11&type=section&id=Note%204%20-%20Inventories) Inventories significantly increased from October 31, 2024, to July 31, 2025, primarily driven by a substantial rise in green coffee and packed coffee Inventories | Inventory Type | July 31, 2025 (in USD) | October 31, 2024 (in USD) | Change | | :------------- | :------------ | :--------------- | :----- | | Packed coffee | $3,851,853 | $2,025,335 | +90.2% | | Green coffee | $15,674,822 | $11,525,118 | +36.0% | | Total Inventories | $21,685,412 | $15,705,984 | +38.1% | [Note 5 - Commodities Held by Broker](index=12&type=section&id=Note%205%20-%20Commodities%20Held%20by%20Broker) The Company uses short-term coffee futures and options contracts to partially hedge against green coffee price fluctuations, but recent periods have seen significant losses, increasing cost of sales and decreasing profitability - The Company uses short-term coffee futures and options contracts for partial hedging of green coffee prices and to reduce cost of sales, classifying them as trading securities[43](index=43&type=chunk)[45](index=45&type=chunk) - Realized and unrealized gains/losses on these contracts are included in cost of sales, impacting earnings volatility[45](index=45&type=chunk) Realized and Unrealized Gains/Losses on Commodity Contracts | Metric | Three Months Ended July 31, 2025 (in USD) | Three Months Ended July 31, 2024 (in USD) | Nine Months Ended July 31, 2025 (in USD) | Nine Months Ended July 31, 2024 (in USD) | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Gross realized gains | $1,660,346 | $405,608 | $3,773,790 | $1,187,382 | | Gross realized losses | $(373,788) | $(133,392) | $(608,780) | $(903,162) | | Unrealized (losses) gains | $(2,056,404) | $464,272 | $(2,478,142) | $934,974 | | Total | $(769,846) | $736,488 | $686,868 | $1,219,194 | [Note 6 - Line of Credit](index=12&type=section&id=Note%206%20-%20Line%20of%20Credit) The Company's line of credit with Webster Financial Corp. was amended, extending the maturity date to June 28, 2026, and increasing the maximum facility to **$10,000,000**, with an outstanding balance of **$6,250,000** as of July 31, 2025 - The line of credit maturity date was extended to June 28, 2026, and the maximum facility amount increased to **$10,000,000**[47](index=47&type=chunk)[48](index=48&type=chunk) - The outstanding balance on the line of credit was **$6,250,000** as of July 31, 2025, compared to **$0** as of October 31, 2024[50](index=50&type=chunk) - The Company was in compliance with all financial covenants as of July 31, 2025[23](index=23&type=chunk)[50](index=50&type=chunk) [Note 7 – Income Taxes](index=13&type=section&id=Note%207%20%E2%80%93%20Income%20Taxes) The Company recorded income tax expense of **$17,584** for the three months and **$650,749** for the nine months ended July 31, 2025, primarily due to the tax impact of unrealized losses from coffee futures and options contracts, and is assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) Income Tax Expense | Period | 2025 (in USD) | 2024 (in USD) | | :---------------------- | :--------- | :--------- | | Three months ended July 31 | $17,584 | $259,249 | | Nine months ended July 31 | $650,749 | $323,954 | - The income tax expense for the three months ended July 31, 2025, was mainly due to the tax impact of unrealized losses from coffee futures and options contracts[54](index=54&type=chunk) - The Company is currently assessing the impact of the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, which includes permanent extension of certain tax provisions and modifications to the international tax framework[55](index=55&type=chunk) [Note 8 – Earnings (Loss) Per Share](index=13&type=section&id=Note%208%20%E2%80%93%20Earnings%20%28Loss%29%20Per%20Share) For the three months ended July 31, 2025, the company reported a loss per share of **$(0.21)**, while for the nine months, it reported earnings per share of **$0.10** Basic and Diluted EPS | Period | 2025 (in USD) | 2024 (in USD) | | :---------------------- | :----- | :----- | | Three months ended July 31 | $(0.21) | $0.11 | | Nine months ended July 31 | $0.10 | $0.17 | - The weighted average common shares outstanding for both basic and diluted EPS remained constant at **5,708,599** for all periods presented[57](index=57&type=chunk) - **921,000** outstanding stock options were excluded from diluted EPS calculation as they were antidilutive[57](index=57&type=chunk) [Note 9 - Commitments and Contingencies](index=13&type=section&id=Note%209%20-%20Commitments%20and%20Contingencies) The Company and its subsidiaries are not involved in any pending legal proceedings that management believes would have a material effect on the business or financial condition - No material legal proceedings are pending against the Company or its subsidiaries[58](index=58&type=chunk) [Note 10 – Leases](index=14&type=section&id=Note%2010%20%E2%80%93%20Leases) The Company's right-of-use operating lease assets and total lease liabilities significantly increased from October 31, 2024, to July 31, 2025, primarily due to a new lease from the Second Empire Acquisition, while a May 2024 lease modification resulted in a gain on extinguishment Lease Assets and Liabilities | Metric | July 31, 2025 (in USD) | October 31, 2024 (in USD) | Change | | :-------------------------- | :------------ | :--------------- | :----- | | Right-of-use operating lease assets | $2,696,475 | $1,166,537 | +131.1% | | Total lease liability | $2,737,267 | $1,173,032 | +133.3% | - A new lease was recognized in November 2024 for **$2,113,581** in connection with the Second Empire Acquisition[65](index=65&type=chunk) - A lease modification in May 2024 resulted in a gain on extinguishment of lease of **$210,567**[64](index=64&type=chunk) [Note 11 – Related Party Transactions](index=15&type=section&id=Note%2011%20%E2%80%93%20Related%20Party%20Transactions) The Company maintains a Non-Qualified Deferred Compensation Plan for its CEO, with assets and corresponding liabilities of **$129,972** as of July 31, 2025 - The Company has a Non-Qualified Deferred Compensation Plan for its CEO, with a deferred compensation payable of **$129,972** as of July 31, 2025[66](index=66&type=chunk) [Note 12 - Stockholders' Equity](index=15&type=section&id=Note%2012%20-%20Stockholders%27%20Equity) The Company did not purchase any treasury shares or grant, forfeit, or expire any stock options during the three and nine months ended July 31, 2025, with all **921,000** outstanding stock options being exercisable and fully vested - No treasury shares were purchased during the three and nine months ended July 31, 2025[67](index=67&type=chunk) - No stock options were granted, forfeited, or expired during the three and nine months ended July 31, 2025[68](index=68&type=chunk) - As of July 31, 2025, **921,000** stock options were exercisable and fully vested, with no stock-based compensation expense recorded[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 13 – Segment Information](index=15&type=section&id=Note%2013%20%E2%80%93%20Segment%20Information) The Company operates as a single reportable segment: coffee, with its CODM assessing performance and allocating resources based on consolidated operating income (loss), primarily deriving revenue from North America across wholesale green coffee, private label, and branded coffee sales - The Company has one reportable segment: coffee, managed on a consolidated basis, with Andrew Gordon serving as the Chief Operating Decision Maker (CODM)[71](index=71&type=chunk) - The coffee segment generates revenue from wholesale green coffee, private label coffee, and branded coffee, with revenue recognized upon shipment[72](index=72&type=chunk) - The CODM evaluates performance and allocates resources based on operating income (loss) and total consolidated assets[72](index=72&type=chunk)[73](index=73&type=chunk) [Note 14 - Subsequent Events](index=16&type=section&id=Note%2014%20-%20Subsequent%20Events) The Company has evaluated all subsequent events through the date the financial statements were available and determined that no events require reporting - No subsequent events requiring disclosure were identified[74](index=74&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, highlighting factors affecting operations, critical accounting policies, and a detailed comparison of results for the three and nine months ended July 31, 2025, versus 2024, along with discussions on liquidity, capital resources, and going concern [Overview](index=17&type=section&id=Overview) The Company is an integrated wholesale coffee roaster and dealer, offering a broad range of coffee products, with operations affected by sales, marketing, volatile green coffee prices (generally passed through), and hedging policies, and recently acquired Empire Coffee Company - The Company is an integrated wholesale coffee roaster and dealer, offering diverse coffee products across various price points, aiming for increased profitability and resilience to price volatility[78](index=78&type=chunk) - Net sales are driven by sales and marketing efforts and customer retention/acquisition[80](index=80&type=chunk) - Green coffee prices are volatile but historically, increases have been passed to customers, leading to increased net sales[81](index=81&type=chunk) - The Company uses short-term coffee futures and options contracts for partial hedging, but acknowledges that no strategy eliminates all pricing risks and past losses have impacted profitability[82](index=82&type=chunk)[83](index=83&type=chunk) - On November 6, 2024, the Company's subsidiary, Second Empire, acquired equipment, accounts receivable, and inventory of Empire Coffee Company[84](index=84&type=chunk) [Three Months Ended July 31, 2025 Compared to the Three Months Ended July 31, 2024](index=20&type=section&id=Three%20Months%20Ended%20July%2031%2C%202025%20Compared%20to%20the%20Three%20Months%20Ended%20July%2031%2C%202024) Net sales increased by **27%** due to higher sales of private label and branded coffees, but gross profit decreased by **26%** due to a **41%** increase in cost of sales, driven by higher tariffs and a net trading loss on coffee futures, leading to a net loss of **$1.2 million** compared to net income in the prior year Three Months Ended July 31 - Key Financials | Metric | 2025 (in USD) | 2024 (in USD) | Change ($) | Change (%) | | :-------------------------------- | :----------- | :----------- | :----------- | :--------- | | Net Sales | $23,910,514 | $18,813,162 | $5,097,352 | +27% | | Cost of Sales | $20,997,777 | $14,887,098 | $6,110,679 | +41% | | Gross Profit | $2,912,737 | $3,926,064 | $(1,013,327) | -26% | | Operating Expenses | $4,007,888 | $3,206,201 | $801,687 | +25% | | Net Income (Loss) | $(1,205,413) | $626,796 | $(1,832,209) | -292.5% | - The increase in cost of sales was driven by higher tariffs on imported coffee and a net trading loss of approximately **$770,000** on coffee futures and options contracts[88](index=88&type=chunk) - Operating expenses increased primarily due to the acquisition of Empire Coffee Company[90](index=90&type=chunk) [Nine Months Ended July 31, 2025, Compared to the Nine Months Ended July 31, 2024](index=21&type=section&id=Nine%20Months%20Ended%20July%2031%2C%202025%2C%20Compared%20to%20the%20Nine%20Months%20Ended%20July%2031%2C%202024) Net sales increased by **20%** due to higher sales across product lines, and gross profit also increased by **19.5%**, but operating expenses rose by **21%** due to the Second Empire Acquisition, leading to a **38%** decrease in net income Nine Months Ended July 31 - Key Financials | Metric | 2025 (in USD) | 2024 (in USD) | Change ($) | Change (%) | | :-------------------------------- | :----------- | :----------- | :----------- | :--------- | | Net Sales | $68,535,860 | $57,349,477 | $11,186,383 | +20% | | Cost of Sales | $55,253,979 | $46,239,134 | $9,014,845 | +19.5% | | Gross Profit | $13,281,881 | $11,110,343 | $2,171,538 | +19.5% | | Operating Expenses | $11,897,386 | $9,840,219 | $2,057,167 | +21% | | Net Income (Loss) | $591,898 | $955,979 | $(364,081) | -38% | - Operating expenses increased by approximately **$2.2 million** due to the Second Empire Acquisition[98](index=98&type=chunk) - Net income decreased primarily due to higher operating expenses, tariffs on imported coffee, and unrealized trading losses in the third quarter[101](index=101&type=chunk) [Liquidity, Capital Resources and Going Concern](index=21&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Going%20Concern) Working capital decreased by **$547,454** to **$20,979,529** as of July 31, 2025, with operating and investing activities using cash, while financing activities provided cash from increased line of credit borrowings, and the Company expects to fund operations through operating cash and its credit facility - Working capital decreased by **$547,454** to **$20,979,529** as of July 31, 2025, compared to October 31, 2024[102](index=102&type=chunk) - Operating activities used **$5,396,716** in cash for the nine months ended July 31, 2025, a significant change from **$5,209,235** provided in the prior year, mainly due to increased inventory[106](index=106&type=chunk) - Financing activities provided **$6,250,000** in cash for the nine months ended July 31, 2025, primarily from increased borrowings under the line of credit[108](index=108&type=chunk) - The Company expects to fund operations for at least the next twelve months through operating cash and its credit facility[109](index=109&type=chunk) [Off-Balance Sheet Arrangements](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has no material off-balance sheet arrangements - The Company does not have any material off-balance sheet arrangements[110](index=110&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no applicable disclosures regarding quantitative and qualitative market risk - No applicable disclosures for quantitative and qualitative market risk[111](index=111&type=chunk) [ITEM 4. Controls and Procedures](index=23&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of July 31, 2025, due to several material weaknesses in internal control over financial reporting, for which a remediation plan is in progress [Evaluation of Disclosure Controls and Procedures](index=23&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were not effective as of July 31, 2025, due to material weaknesses in internal control over financial reporting - Disclosure controls and procedures were deemed not effective as of July 31, 2025, due to material weaknesses in internal control over financial reporting[112](index=112&type=chunk) [Material Weakness Over Financial Reporting](index=23&type=section&id=Material%20Weakness%20Over%20Financial%20Reporting) Several material weaknesses were identified, including inadequate controls over inventory quantities, system access, contract identification/accounting, physical custody of records, and journal entry/account reconciliation processes, along with inaccurate intercompany eliminations in prior financial statements - Inadequate controls to prevent and detect misstatements of inventory quantities at a subsidiary[113](index=113&type=chunk) - Inappropriate system access controls over the financial reporting system, lacking segregation of duties[114](index=114&type=chunk) - Lack of adequate controls for identifying and accounting for material contracts, specifically a material lease amendment[115](index=115&type=chunk) - Inadequate controls regarding physical custody of hardware, electronic, and hard copy records for Generations Coffee and Steep and Brew[116](index=116&type=chunk) - Lack of adequate controls for the preparation and review of journal entries and account reconciliations during the year-end financial statement closing process[117](index=117&type=chunk) - Inaccurate accounting for intercompany eliminations in fiscal year 2020, leading to an overstatement of net sales and cost of sales by approximately **$8.3 million** and requiring restatement[118](index=118&type=chunk) - Lack of adequate controls for recording year-end accruals for vendor liabilities and calculating required loan covenants[119](index=119&type=chunk) - Despite material weaknesses, management believes the financial information presented is materially correct and fairly presents the financial position and operating results[120](index=120&type=chunk) [Remediation Plan for the Material Weaknesses](index=24&type=section&id=Remediation%20Plan%20for%20the%20Material%20Weaknesses) The Company is implementing a remediation plan, including hiring third-party consultants, educating control owners, developing documentation, enhancing controls for financial reporting systems, redesigning access rights, performing cross-reference analysis, and implementing additional levels of internal review - Remediation efforts include hiring third-party consultants, educating control owners, developing documentation, enhancing financial reporting system controls, redesigning access rights, performing quarterly cross-reference analysis, and implementing additional internal review levels[121](index=121&type=chunk)[126](index=126&type=chunk) - Material weaknesses will not be considered remediated until efforts are fully implemented and controls are operating effectively[122](index=122&type=chunk) [Changes in Internal Control over Financial Reporting](index=24&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Other than the changes aimed at remediating the identified material weaknesses, there were no other material changes in internal control over financial reporting during the fiscal quarter ended July 31, 2025 - No material changes in internal control over financial reporting occurred during the quarter, other than those for remediation[125](index=125&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=25&type=section&id=ITEM%201.%20Legal%20Proceedings) No legal proceedings are reported - No legal proceedings to report[127](index=127&type=chunk) [ITEM 1A. Risk Factors](index=25&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the Company's risk factors since the prior Form 10-Q filing for the quarter ending April 30, 2025 - No material changes to risk factors since the April 30, 2025, Form 10-Q[128](index=128&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds are reported - No unregistered sales of equity securities or use of proceeds[129](index=129&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=25&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported - No defaults upon senior securities[130](index=130&type=chunk) [ITEM 4. Mine Safety Disclosures](index=25&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Not applicable - Mine safety disclosures are not applicable[131](index=131&type=chunk) [ITEM 5. Other Information](index=25&type=section&id=ITEM%205.%20Other%20Information) No other information requiring disclosure under this item, including Rule 10b5-1 trading arrangements, was reported for directors or officers during the quarter - No other information to report, including Rule 10b5-1 trading arrangements by directors or officers[132](index=132&type=chunk)[133](index=133&type=chunk) [ITEM 6. Exhibits](index=26&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - The report includes certifications (Section 302 and 906) and Inline XBRL documents as exhibits[135](index=135&type=chunk) SIGNATURES [SIGNATURES](index=27&type=section&id=SIGNATURES) The report is duly signed on behalf of Coffee Holding Co., Inc. by Andrew Gordon, President, Chief Executive Officer, and Chief Financial Officer, on September 12, 2025 - The report was signed by Andrew Gordon, President, CEO, and CFO, on September 12, 2025[138](index=138&type=chunk)

[Introductory Note](index=4&type=section&id=Introductory%20Note) This section outlines Vince Holding Corp.'s history, including its IPO, IP sale, and P180 acquisition, and defines key terms - Vince Holding Corp. (VHC) completed an **IPO in November 2013**, separating non-Vince businesses[8](index=8&type=chunk) - V Opco, a subsidiary, sold its intellectual property assets related to the Vince brand to **ABG-Vince, LLC** on **May 25, 2023**[9](index=9&type=chunk) - **P180 Vince Acquisition Co.** acquired a **majority stake** in the Company from affiliates of Sun Capital Partners, Inc. on **January 22, 2025**[10](index=10&type=chunk) [Disclosures Regarding Forward-Looking Statements](index=4&type=section&id=DISCLOSURES%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements, noting actual results may differ materially due to various risks and uncertainties - Forward-looking statements are subject to **risks and uncertainties**, and actual results may differ materially from expectations[13](index=13&type=chunk) - Key risks include changes in **trade policies and tariffs**, ability to maintain **cash flow and credit facility availability**, general economic conditions, and ability to maintain wholesale partners[14](index=14&type=chunk) - Other risks involve the **license agreement with ABG Vince**, strategic initiative benefits, lease payments, **internal control weaknesses**, and **NYSE** listing compliance[14](index=14&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and their accompanying notes [a) Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=a)%20Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | (in thousands) | August 2, 2025 | February 1, 2025 | | :--------------- | :------------- | :--------------- | | **Assets** | | | | Total current assets | $112,071 | $96,576 | | Total assets | $238,972 | $222,735 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $69,736 | $73,546 | | Long-term debt | $31,096 | $19,156 | | Total stockholders' equity | $49,295 | $41,759 | | Total liabilities and stockholders' equity | $238,972 | $222,735 | - Total assets increased by **$16,237 (7.3%)** from **February 1, 2025**, to **August 2, 2025**, primarily driven by an increase in inventories[16](index=16&type=chunk) - Total stockholders' equity increased by **$7,536 (18.0%)** from **February 1, 2025**, to **August 2, 2025**[16](index=16&type=chunk) [b) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=b)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | (in thousands, except per share data) | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $73,241 | $74,169 | $131,174 | $133,340 | | Gross profit | $36,938 | $35,131 | $66,101 | $65,044 | | Income from operations | $11,151 | $1,130 | $6,713 | $6,734 | | Net income | $12,060 | $569 | $7,257 | $4,949 | | Basic earnings per share | $0.93 | $0.05 | $0.56 | $0.39 | | Diluted earnings per share | $0.93 | $0.05 | $0.56 | $0.39 | - Net sales decreased by **1.3%** for the three months ended **August 2, 2025**, and by **1.6%** for the six months ended **August 2, 2025**, compared to the prior year periods[19](index=19&type=chunk) - Net income significantly increased to **$12,060 thousand** for the three months ended **August 2, 2025**, from **$569 thousand** in the prior year, and to **$7,257 thousand** for the six months, from **$4,949 thousand**[19](index=19&type=chunk) [c) Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=c)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | (in thousands, except share amounts) | Balance as of February 1, 2025 | Balance as of August 2, 2025 | | :----------------------------------- | :----------------------------- | :--------------------------- | | Common Stock (Number of Shares) | 12,758,852 | 12,968,548 | | Common Stock (Par Value) | $128 | $130 | | Additional Paid-In Capital | $1,158,279 | $1,158,508 | | Accumulated Deficit | $(1,116,681) | $(1,109,424) | | Accumulated Other Comprehensive Income (Loss) | $33 | $81 | | Total Stockholders' Equity | $41,759 | $49,295 | - Total stockholders' equity increased by **$7,536** from **February 1, 2025**, to **August 2, 2025**, primarily due to net income of **$12,060** and share-based compensation expense[24](index=24&type=chunk) - The number of common shares outstanding increased from **12,758,852** to **12,968,548** during the six-month period[24](index=24&type=chunk) [d) Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=d)%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | (in thousands) | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :--------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(7,615) | $(7,072) | | Net cash used in investing activities | $(3,530) | $(1,421) | | Net cash provided by financing activities | $11,319 | $8,081 | | Increase (decrease) in cash, cash equivalents, and restricted cash | $174 | $(412) | | Cash and cash equivalents per balance sheet at end of period | $777 | $711 | - Net cash used in operating activities increased slightly to **$7,615 thousand** for the six months ended **August 2, 2025**, from **$7,072 thousand** in the prior year, primarily due to increased inventories[30](index=30&type=chunk) - Net cash used in investing activities more than doubled to **$3,530 thousand**, driven by higher capital expenditures[30](index=30&type=chunk) [e) Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=e)%20Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Description of Business and Basis of Presentation](index=11&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes Vince Holding Corp.'s business, recent transactions, financial statement basis, liquidity, and revenue recognition - The Company operates the **Vince** brand, a global luxury apparel and accessories brand, after divesting Rebecca Taylor and Parker brands[32](index=32&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - A strategic partnership with **Authentic Brands Group (ABG)** involved the sale of **Vince IP** for cash and a **25%** membership interest in **ABG Vince**, granting V Opco an exclusive, long-term license[33](index=33&type=chunk) - **P180** acquired a **majority stake** in the Company on **January 22, 2025**, leading to amendments in credit agreements and a significant pay-down of subordinated debt[36](index=36&type=chunk)[37](index=37&type=chunk) - The Company's liquidity sources include cash, operations, the **2023 Revolving Credit Facility**, and capital markets access, with primary cash needs for working capital, debt service, and capital expenditures[43](index=43&type=chunk) [Note 2. Recent Transactions](index=15&type=section&id=Note%202.%20Recent%20Transactions) This note details the Rebecca Taylor wind-down, Vince IP sale to ABG Vince, and P180 Acquisition, outlining their financial implications - The Rebecca Taylor business was wound down, and its intellectual property was sold in **December 2022**. The remaining shares of Rebecca Taylor, Inc. were sold in **May 2024**, resulting in a gain on sale of subsidiary of **$7,634 thousand** for the six months ended **August 3, 2024**[51](index=51&type=chunk)[53](index=53&type=chunk) - The **Vince** intellectual property was sold to **ABG-Vince LLC** for **$76,500 thousand** cash and a **25%** membership interest, with the Company accounting for this investment using the equity method[54](index=54&type=chunk)[56](index=56&type=chunk) - The **P180 Acquisition** involved **P180** purchasing a **majority stake (67%)** in the Company for approximately **$19,800 thousand** and included a **$20,000 thousand** pay-down of the Third Lien Credit Facility by V Opco and a **$7,000 thousand** debt forgiveness by **P180**, leading to a debt extinguishment gain of **$11,575 thousand** recorded as a capital contribution[65](index=65&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - Under the License Agreement with **ABG Vince**, V Opco has an exclusive, long-term license to use the **Vince** brand **IP** in specified territories and for certain products, with an annual guaranteed minimum royalty of **$11,000 thousand**[59](index=59&type=chunk)[62](index=62&type=chunk) [Note 3. Fair Value Measurements](index=19&type=section&id=Note%203.%20Fair%20Value%20Measurements) This note defines fair value, outlines the three-level hierarchy for financial instruments, and discusses non-financial asset impairment - Fair value is defined as the amount received from selling an asset or paid to transfer a liability in an orderly transaction[71](index=71&type=chunk) - The Company's financial assets and liabilities are measured using a three-level fair value hierarchy: **Level 2** for revolving credit facilities (variable rates, frequent activity) and **Level 3** for the Third Lien Credit Facility (variable rates, unobservable inputs)[71](index=71&type=chunk) - Non-financial assets, such as operating lease **ROU assets** and property and equipment, are assessed for impairment periodically, with no impairment identified for the three and six months ended **August 2, 2025**[73](index=73&type=chunk) [Note 4. Long-Term Debt and Financing Arrangements](index=21&type=section&id=Note%204.%20Long-Term%20Debt%20and%20Financing%20Arrangements) This note details the Company's long-term debt, including credit facilities, their terms, and the impact of the P180 Acquisition | (in thousands) | August 2, 2025 | February 1, 2025 | | :--------------- | :------------- | :--------------- | | Revolving Credit Facilities | $22,862 | $11,413 | | Third Lien Credit Facility | $8,234 | $7,743 | | Total long-term debt | $31,096 | $19,156 | - The **2023 Revolving Credit Facility** provides up to **$85,000 thousand**, maturing on **June 23, 2028**, with interest rates based on **SOFR** or **Base Rate** plus applicable margins, and requires Excess Availability to be no less than the greater of **10.0%** of the **Loan Cap** or **$7,500 thousand**[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - The Third Lien Credit Facility, initially **$20,000 thousand**, was significantly reduced by approximately **$27,000 thousand** through the Sun Debt Paydown and **P180** Debt Forgiveness in connection with the **P180 Acquisition**, resulting in **$7,500 thousand** remaining outstanding and a debt extinguishment gain of **$11,575 thousand**[96](index=96&type=chunk)[97](index=97&type=chunk) - As of **August 2, 2025**, the Company was in compliance with applicable covenants, with **$42,607 thousand** available under the **2023 Revolving Credit Facility** and a weighted average interest rate of **6.9%** on outstanding borrowings[86](index=86&type=chunk) [Note 5. Inventory](index=26&type=section&id=Note%205.%20Inventory) This note provides the net finished goods inventory values for the reported periods | (in thousands) | August 2, 2025 | February 1, 2025 | | :--------------- | :------------- | :--------------- | | Finished goods, net of reserves | $76,705 | $59,146 | - Finished goods inventory, net of reserves, increased by **$17,559 (29.7%)** from **February 1, 2025**, to **August 2, 2025**[98](index=98&type=chunk) [Note 6. Share-Based Compensation](index=26&type=section&id=Note%206.%20Share-Based%20Compensation) This note details share-based compensation plans, including stock option and RSU activity, and recognized compensation expense - The **Vince 2013 Incentive Plan** allows for grants of stock options, restricted stock, and other awards, with **229,962** shares available for future grants as of **August 2, 2025**[99](index=99&type=chunk) | Stock Options Activity (Six Months Ended August 2, 2025) | Number of Options | | :--------------------------------------- | :---------------- | | Outstanding at February 1, 2025 | — | | Granted | 403,650 | | Forfeited or expired | (3,300) | | Outstanding at August 2, 2025 | 400,350 | | Restricted Stock Units Activity (Six Months Ended August 2, 2025) | Number of Units | | :---------------------------------------- | :-------------- | | Non-vested at February 1, 2025 | 366,399 | | Granted | 5,000 | | Vested | (167,425) | | Non-vested at August 2, 2025 | 203,974 | - Share-based compensation expense was **$96 thousand** for the three months ended **August 2, 2025** (vs. **$255 thousand** in prior year) and **$242 thousand** for the six months ended **August 2, 2025** (vs. **$250 thousand** in prior year)[102](index=102&type=chunk) [Note 7. Stockholders' Equity](index=28&type=section&id=Note%207.%20Stockholders'%20Equity) This note describes the Company's At-the-Market Offering program for common stock sales through Virtu Americas LLC - The Company has an **At-the-Market Offering** program with **Virtu Americas LLC**, allowing it to sell up to **$10 million** of common stock under the **2024 S-3 Registration Statement**[104](index=104&type=chunk) - No offerings or sales of common stock were made under the **Virtu At-the-Market Offering** during the three and six months ended **August 2, 2025**[105](index=105&type=chunk) - As of **August 2, 2025**, **$2,925 thousand** was available under the **Virtu At-the-Market Offering**[105](index=105&type=chunk) [Note 8. Earnings Per Share](index=28&type=section&id=Note%208.%20Earnings%20Per%20Share) This note explains basic and diluted earnings per share calculation and reconciles weighted average shares outstanding | Weighted Average Shares Outstanding | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic | 12,906,045 | 12,569,488 | 12,863,100 | 12,538,695 | | Diluted | 12,958,739 | 12,617,085 | 12,950,828 | 12,606,575 | - Basic **EPS** is calculated by dividing net income by weighted average common shares outstanding, while diluted **EPS** includes the dilutive effect of share-based awards[106](index=106&type=chunk) - Certain weighted average shares were excluded from diluted **EPS** computation due to their anti-dilutive effect: **522,638** for the three months and **182,809** for the six months ended **August 2, 2025**[107](index=107&type=chunk) [Note 9. Commitments and Contingencies](index=29&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This note addresses legal proceedings, contingencies, and details the recognition and receipt of Employee Retention Tax Credits (ERC) - The Company is involved in ordinary course legal proceedings and believes their ultimate outcome will not materially impact financial position or results[108](index=108&type=chunk) - In the second quarter of fiscal **2025**, the Company received **$7,173 thousand** in payments for Employee Retention Tax Credits (**ERC**) from the **CARES Act**, including **$1,560 thousand** in interest[110](index=110&type=chunk) - The **ERC** benefit of **$5,613 thousand** was recorded as an offset to compensation expense within SG&A, and the **$1,560 thousand** interest was recorded as Other (income)[110](index=110&type=chunk) [Note 10. Income Taxes](index=29&type=section&id=Note%2010.%20Income%20Taxes) This note explains the Company's income tax provision, deferred tax assets, and the impact of the One Big Beautiful Bill Act (OBBBA) - The Company recorded a discrete tax expense of **$58 thousand** for the three and six months ended **August 2, 2025**, related to interest received from the **ERC**[112](index=112&type=chunk) - Despite year-to-date ordinary pre-tax losses, the Company anticipates annual ordinary pre-tax income, but has determined that the tax benefit of year-to-date losses is unlikely to be realized in the current or future years[112](index=112&type=chunk) - The Company maintains a full valuation allowance against its deferred tax assets, which will remain until sufficient positive evidence supports their realization[115](index=115&type=chunk) - The recently enacted **One Big Beautiful Bill Act (OBBBA)** did not have a material impact on the Company's income tax provision for the three and six months ended **August 2, 2025**, and no material effect is anticipated for the full fiscal year[116](index=116&type=chunk) [Note 11. Leases](index=31&type=section&id=Note%2011.%20Leases) This note outlines the Company's operating lease accounting, detailing ROU assets, lease liabilities, total lease cost, and future maturities - The Company has operating leases for real estate, with **ROU assets** and operating lease liabilities recognized based on the present value of future lease payments using an estimated incremental borrowing rate[117](index=117&type=chunk)[118](index=118&type=chunk) | (in thousands) | Three Months Ended August 2, 2025 | Six Months Ended August 2, 2025 | | :--------------- | :-------------------------------- | :------------------------------ | | Operating lease cost | $5,765 | $11,445 | | Variable operating lease cost | $29 | $94 | | Sublease income | $(216) | $(432) | | Total lease cost | $5,578 | $11,107 | | Future Maturity of Lease Liabilities (as of August 2, 2025) | | :------------------------------------ | | Fiscal 2025: $10,222 thousand | | Fiscal 2026: $22,499 thousand | | Fiscal 2027: $19,400 thousand | | Fiscal 2028: $18,581 thousand | | Fiscal 2029: $17,335 thousand | | Thereafter: $41,711 thousand | | Total operating lease liabilities: $102,821 thousand | [Note 12. Segment Financial Information](index=33&type=section&id=Note%2012.%20Segment%20Financial%20Information) This note identifies Vince Wholesale and Direct-to-consumer segments, providing summary financial information and unallocated corporate expenses - The Company operates two reportable segments: **Vince Wholesale** (distributing to department and specialty stores) and **Vince Direct-to-consumer** (distributing through branded retail stores, outlet stores, and e-commerce)[124](index=124&type=chunk) | (in thousands) | Vince Wholesale (3M Aug 2, 2025) | Vince Direct-to-consumer (3M Aug 2, 2025) | Total (3M Aug 2, 2025) | | :--------------- | :------------------------------- | :---------------------------------------- | :--------------------- | | Net Sales | $44,762 | $28,479 | $73,241 | | Total segment income before income taxes and equity in net income of equity method investment | $17,058 | $211 | $17,269 | | (in thousands) | Vince Wholesale (6M Aug 2, 2025) | Vince Direct-to-consumer (6M Aug 2, 2025) | Total (6M Aug 2, 2025) | | :--------------- | :------------------------------- | :---------------------------------------- | :--------------------- | | Net Sales | $75,052 | $56,122 | $131,174 | | Total segment income (loss) before income taxes and equity in net income of equity method investment | $26,455 | $(589) | $25,866 | - Unallocated corporate expenses include SG&A expenses for corporate activities and other charges not directly attributable to segments, and for the three and six months ended **August 2, 2025**, include an **ERC** benefit of **$7,173 thousand**[123](index=123&type=chunk)[130](index=130&type=chunk) [Note 13. Related Party Transactions](index=36&type=section&id=Note%2013.%20Related%20Party%20Transactions) This note details related party transactions, including agreements with ABG Vince, P180 reimbursements, and past dealings with CaaStle and SK Financial - The Company received cash distributions of **$252 thousand** and **$2,028 thousand** from **ABG Vince** under the Operating Agreement for the three and six months ended **August 2, 2025**, respectively[133](index=133&type=chunk) - Royalty payments to **ABG Vince** under the License Agreement were **$550 thousand** and **$8,463 thousand** for the three and six months ended **August 2, 2025**, respectively, with an annual guaranteed minimum royalty of **$11,000 thousand**[134](index=134&type=chunk)[135](index=135&type=chunk) - **P180** agreed to reimburse the Company for approximately **$599 thousand** in fees and expenses related to the **P180 Acquisition**, recorded as trade receivables[136](index=136&type=chunk) - CaaStle, previously a related party due to its relationship with **P180**, is no longer considered a related party, and the Vince Unfold program and platform services agreement were terminated on **April 24, 2025**[137](index=137&type=chunk)[139](index=139&type=chunk) - SK Financial, an affiliate of Sun Capital and former related party, was involved in the Third Lien Credit Facility, which was significantly reduced and is no longer a related party post-**P180 Acquisition**[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on operating results, financial condition, liquidity, seasonality, and critical accounting estimates [Executive Overview](index=40&type=section&id=Executive%20Overview) This overview describes Vince Holding Corp.'s operations of the Vince brand through wholesale and direct-to-consumer channels - **Vince Holding Corp.** operates the **Vince** brand, a global luxury apparel and accessories business, through wholesale and direct-to-consumer channels[150](index=150&type=chunk)[151](index=151&type=chunk) - Recent strategic transactions include a partnership with **Authentic Brands Group** for **Vince IP** and the acquisition of a majority stake by **P180 Vince Acquisition Co.**[152](index=152&type=chunk)[153](index=153&type=chunk) - The Company previously owned and operated Rebecca Taylor and Parker brands, which have since been wound down and sold[154](index=154&type=chunk)[155](index=155&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) [Three Months Ended August 2, 2025 Compared to Three Months Ended August 3, 2024](index=42&type=section&id=Three%20Months%20Ended%20August%202%2C%202025%20Compared%20to%20Three%20Months%20Ended%20August%203%2C%202024) | (in thousands, except per share data) | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------- | :------------- | :--------- | :--------- | | Net sales | $73,241 | $74,169 | $(928) | (1.3)% | | Gross profit | $36,938 | $35,131 | $1,807 | 5.1% | | Gross margin | 50.4% | 47.4% | 3.0 pp | | | Selling, general and administrative expenses | $25,787 | $34,001 | $(8,214) | (24.2)% | | Income from operations | $11,151 | $1,130 | $10,021 | 886.8% | | Interest expense, net | $849 | $1,647 | $(798) | (48.5)% | | Other (income) | $(1,560) | — | $(1,560) | N/A | | Net income | $12,060 | $569 | $11,491 | 2020.0% | | Diluted earnings per share | $0.93 | $0.05 | $0.88 | 1760.0% | - Gross margin rate increased by **3.0 pp**, driven by lower product costing and higher pricing (**340 bps** positive impact) and lower discounting (**210 bps** positive impact), partially offset by higher tariffs (**170 bps** negative impact) and increased freight costs (**100 bps** negative impact)[161](index=161&type=chunk)[163](index=163&type=chunk) - SG&A expenses decreased significantly by **$8,214 thousand**, primarily due to a **$5,613 thousand ERC** benefit recorded as an offset to compensation expense and decreased severance costs[161](index=161&type=chunk) [Performance by Segment (Three Months)](index=43&type=section&id=Performance%20by%20Segment%20(Three%20Months)) | (in thousands) | Vince Wholesale (Aug 2, 2025) | Vince Wholesale (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :---------------------------- | :---------------------------- | :--------- | :--------- | | Net sales | $44,762 | $47,184 | $(2,422) | (5.1)% | | Income from operations | $17,058 | $16,663 | $395 | 2.4% | | (in thousands) | Vince Direct-to-consumer (Aug 2, 2025) | Vince Direct-to-consumer (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :------------------------------------- | :------------------------------------- | :--------- | :--------- | | Net sales | $28,479 | $26,985 | $1,494 | 5.5% | | Income (loss) from operations | $211 | $(1,398) | $1,609 | N/A | - **Vince Direct-to-consumer** comparable sales, including e-commerce, increased by **$1,950 thousand** or **8.1%**, driven by both e-commerce and retail store volume[174](index=174&type=chunk) - The Company closed three net stores since **August 3, 2024**, bringing the total retail store count to **58** (**44** full-price, **14** outlet) as of **August 2, 2025**[174](index=174&type=chunk) [Six Months Ended August 2, 2025 Compared to Six Months Ended August 3, 2024](index=44&type=section&id=Six%20Months%20Ended%20August%202%2C%202025%20Compared%20to%20Six%20Months%20Ended%20August%203%2C%202024) | (in thousands, except per share data) | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :------------------------------------ | :------------- | :------------- | :--------- | :--------- | | Net sales | $131,174 | $133,340 | $(2,166) | (1.6)% | | Gross profit | $66,101 | $65,044 | $1,057 | 1.6% | | Gross margin | 50.4% | 48.8% | 1.6 pp | | | Gain on sale of subsidiary | — | $(7,634) | $7,634 | N/A | | Selling, general and administrative expenses | $59,388 | $65,944 | $(6,556) | (9.9)% | | Income from operations | $6,713 | $6,734 | $(21) | (0.3)% | | Interest expense, net | $1,705 | $3,293 | $(1,588) | (48.2)% | | Other (income) | $(1,560) | — | $(1,560) | N/A | | Net income | $7,257 | $4,949 | $2,308 | 46.6% | | Diluted earnings per share | $0.56 | $0.39 | $0.17 | 43.6% | - Gross margin rate increased by **1.6 pp**, primarily due to lower product costing and higher pricing (**330 bps** positive impact) and lower discounting (**70 bps** positive impact), partially offset by increased freight costs (**150 bps** negative impact) and higher tariffs (**100 bps** negative impact)[177](index=177&type=chunk)[180](index=180&type=chunk) - SG&A expenses decreased by **$6,556 thousand**, mainly due to a **$5,613 thousand ERC** benefit and decreased severance costs, partially offset by increased legal expenses[178](index=178&type=chunk) - Equity in net income (loss) of equity method investment improved from a loss of **$173 thousand** to an income of **$747 thousand**, related to the **25%** interest in **ABG Vince**[184](index=184&type=chunk) [Performance by Segment (Six Months)](index=46&type=section&id=Performance%20by%20Segment%20(Six%20Months)) | (in thousands) | Vince Wholesale (Aug 2, 2025) | Vince Wholesale (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :---------------------------- | :---------------------------- | :--------- | :--------- | | Net sales | $75,052 | $77,441 | $(2,389) | (3.1)% | | Income from operations | $26,455 | $26,847 | $(392) | (1.5)% | | (in thousands) | Vince Direct-to-consumer (Aug 2, 2025) | Vince Direct-to-consumer (Aug 3, 2024) | Change ($) | Change (%) | | :--------------- | :------------------------------------- | :------------------------------------- | :--------- | :--------- | | Net sales | $56,122 | $55,899 | $223 | 0.4% | | Loss from operations | $(589) | $(1,462) | $873 | N/A | - **Vince Direct-to-consumer** comparable sales, including e-commerce, increased by **$2,650 thousand** or **5.5%**, due to increased volume in both e-commerce and retail stores[190](index=190&type=chunk) - The **Vince Direct-to-consumer** segment reduced its operating loss from **$1,462 thousand** to **$589 thousand**, primarily due to improved gross margin[191](index=191&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's liquidity sources include cash, cash flows from operations, borrowings under the **2023 Revolving Credit Facility**, and access to capital markets[192](index=192&type=chunk) - Primary cash needs are for working capital, royalty payments, debt service, and capital expenditures for new stores and leasehold improvements[192](index=192&type=chunk) | (in thousands) | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :--------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(7,615) | $(7,072) | | Net cash used in investing activities | $(3,530) | $(1,421) | | Net cash provided by financing activities | $11,319 | $8,081 | - Net cash used in operating activities for the six months ended **August 2, 2025**, was **$7,615 thousand**, primarily due to a **$17,521 thousand** increase in inventories[195](index=195&type=chunk) - The **2023 Revolving Credit Facility** provides up to **$85,000 thousand**, with **$42,607 thousand** available as of **August 2, 2025**, and **$22,862 thousand** outstanding[202](index=202&type=chunk)[210](index=210&type=chunk) - The Third Lien Credit Facility was reduced by approximately **$27,000 thousand** through the Sun Debt Paydown and **P180** Debt Forgiveness, with **$7,500 thousand** remaining outstanding[220](index=220&type=chunk) [Seasonality](index=54&type=section&id=Seasonality) - The apparel and fashion industry is cyclical, with revenues affected by general economic conditions, consumer spending, and seasonal trends[222](index=222&type=chunk) - Fluctuations in quarterly sales are influenced by the timing of seasonal wholesale shipments and direct-to-consumer sales, indicating that quarterly results may not predict annual performance[222](index=222&type=chunk) [Critical Accounting Estimates](index=54&type=section&id=Critical%20Accounting%20Estimates) - Management's discussion relies on condensed consolidated financial statements prepared using critical accounting policies that require judgments and estimates[223](index=223&type=chunk) - No material changes to critical accounting estimates have occurred as of **August 2, 2025**, from those disclosed in the **2024** Annual Report on Form **10-K**[224](index=224&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' Vince Holding Corp. is exempt from providing quantitative and qualitative market risk disclosures - The Company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a '**smaller reporting company**' under the Securities Exchange Act of **1934**[225](index=225&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses disclosure controls and internal control over financial reporting, noting a material weakness in user access controls and ongoing remediation [Evaluation of Disclosure Controls and Procedures](index=56&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were not effective as of **August 2, 2025**, due to an identified material weakness[228](index=228&type=chunk) - Despite the material weakness, management believes the condensed consolidated financial statements fairly state the Company's financial condition, results of operations, and cash flows due to additional analysis and substantive testing[229](index=229&type=chunk) [Material Weakness in Internal Control over Financial Reporting](index=56&type=section&id=Material%20Weakness%20in%20Internal%20Control%20over%20Financial%20Reporting) - A material weakness was identified in internal control over financial reporting due to inadequate user access controls, which failed to ensure appropriate segregation of duties and restrict access to financial applications and data[230](index=230&type=chunk) - This material weakness did not result in a material misstatement to the financial statements but could impact the effectiveness of **IT**-dependent controls[231](index=231&type=chunk) [Remediation Efforts to Address the Material Weakness](index=56&type=section&id=Remediation%20Efforts%20to%20Address%20the%20Material%20Weakness) - Remediation efforts include modifying system access rights to limit generic **IDs**, implementing a full recertification of **AX** user access rights, and improving operational processes for user provisioning and de-provisioning[232](index=232&type=chunk) - The Company continues to follow a comprehensive remediation plan, including routine reviews of user system access and timely removal of access rights upon termination[233](index=233&type=chunk) [Limitations on the Effectiveness of Disclosure Controls and Procedures](index=56&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) - Control systems provide only reasonable, not absolute, assurance that objectives are met due to inherent limitations[235](index=235&type=chunk) - Projections of effectiveness to future periods are subject to risks that controls may become inadequate or compliance may deteriorate[237](index=237&type=chunk) [Changes in Internal Control over Financial Reporting](index=58&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in internal control over financial reporting during the fiscal quarter ended **August 2, 2025**, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[238](index=238&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in ordinary course legal proceedings, which management believes will not materially impact its financial position or results - The Company is a party to legal proceedings, compliance matters, environmental, wage and hour, and other labor claims in the ordinary course of business[239](index=239&type=chunk) - Management believes the ultimate outcome of these items will not have a material adverse impact on the Company's financial position, results of operations, or cash flows[239](index=239&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section highlights unchanged risk factors from the **2024** Annual Report, focusing on the risk of not maintaining **NYSE** listing due to non-compliance - The Company's risk factors have not materially changed from those disclosed in its **2024** Annual Report on Form **10-K**[240](index=240&type=chunk) - A significant risk is the potential inability to maintain the listing of its common stock on the **NYSE**, as the Company received a notice of non-compliance with the **$50,000 thousand** market capitalization or stockholders' equity requirement[241](index=241&type=chunk)[242](index=242&type=chunk) - The **NYSE** accepted the Company's business plan, granting it until **November 6, 2026**, to regain compliance, but there is no assurance this will be achieved[244](index=244&type=chunk)[245](index=245&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item confirms no unregistered sales of equity securities or use of proceeds occurred during the reporting period - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[248](index=248&type=chunk) [Item 3. Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item indicates that there were no defaults upon senior securities to report - No defaults upon senior securities were reported[249](index=249&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[250](index=250&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This item confirms no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a **Rule 10b5-1** trading arrangement or a non-**Rule 10b5-1** trading arrangement during the quarter ended **August 2, 2025**[251](index=251&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO/CFO certifications and Inline XBRL data - The report includes CEO and CFO Certifications pursuant to Section **302** and Section **906** of the Sarbanes-Oxley Act of **2002**[252](index=252&type=chunk) - Inline **XBRL** Instance, Taxonomy Extension Schema, Calculation, Presentation, and Definition files are provided as exhibits[252](index=252&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________. Commission file number 001-40017 CROWN PROPTECH ACQUISITIONS (Exact Name of Registrant as Specified in Its Charter) Cayman Islands N/A (S ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section provides an overview of Calavo Growers' financial performance for Q3 and the nine-month period ended July 31, 2025, highlighting key operational and financial metrics [Third Quarter 2025 Highlights](index=1&type=section&id=Third%20Quarter%202025%20Highlights) Calavo Growers reported a slight decrease in total net sales for Q3 2025, primarily due to a decline in the Fresh segment, which was significantly impacted by a temporary FDA detention hold on avocado imports and lower selling prices, while the Prepared segment showed strong growth in sales and gross profit, and adjusted net income and EBITDA increased Third Quarter 2025 Key Metrics | Metric | Q3 2025 (in millions) | Q3 2024 (in millions) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total Net Sales | $178.8 | $179.6 | -0.4% | | Fresh Segment Sales | $155.9 | - | -5% | | Prepared Segment Sales | $22.9 | - | +40% | | Gross Profit | $18.2 | - | -9% | | Adjusted Net Income | $10.2 | $10.0 | +2% | | Adjusted Net Income Per Diluted Share | $0.57 | $0.56 | +1.8% | | Adjusted EBITDA | $15.1 | $12.9 | +17.1% | - Fresh segment results reflected an **8% decrease in cartons sold**, driven by declines in both avocado and tomato carton sales[9](index=9&type=chunk) - Gross profit included approximately **$4.2 million of discrete costs** associated with a temporary Food and Drug Administration ("FDA") detention hold on certain avocado imports from Mexico, which resulted in third-party inspection and testing costs, incremental logistics and handling expenses, and inventory write-downs[5](index=5&type=chunk)[9](index=9&type=chunk) - Prepared segment net sales increased primarily due to a **35% increase in sales volume**[9](index=9&type=chunk) [Nine-Month Period Ended July 31, 2025 Highlights](index=2&type=section&id=Nine-Month%20Period%20Ended%20July%2031%2C%202025%20Highlights) For the nine-month period, Calavo Growers achieved a 7% increase in total net sales, with both Fresh and Prepared segments contributing to growth, and net income and adjusted metrics saw significant improvements, partly due to reduced SG&A expenses and strong Prepared segment performance, despite the Fresh segment facing challenges including the FDA hold Nine-Month Period 2025 Key Metrics | Metric | 9M 2025 (in millions) | 9M 2024 (in millions) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total Net Sales | $523.8 | $491.6 | +7% | | Fresh Segment Sales | $470.3 | - | +6% | | Prepared Segment Sales | $53.5 | - | +10% | | Gross Profit | $52.0 | $51.5 | +1% | | SG&A Expenses | $29.8 | $36.9 | -19% | | Net Income from Continuing Operations | $16.1 | $9.3 | +73.1% | | Diluted EPS from Continuing Operations | $0.89 | $0.52 | +71.2% | | Adjusted Net Income | $23.8 | $19.2 | +24% | | Adjusted Net Income Per Diluted Share | $1.33 | $1.08 | +23.1% | | Adjusted EBITDA | $35.7 | $29.9 | +19.4% | - Fresh segment results reflected a decline in avocado and tomato sales, together with approximately **$4.2 million of discrete costs** in the third quarter related to a temporary FDA detention hold on certain avocado imports from Mexico[9](index=9&type=chunk) - Prepared segment sales and profitability increased meaningfully, driven by higher volumes, lower fruit input costs, and improved operating efficiencies[9](index=9&type=chunk) - SG&A expenses declined **19%** compared to the prior year period, reflecting a reduction in professional and consulting fees (including reduced FCPA investigation-related legal expenses), a reduction in compensation expenses reflecting lower headcount and severance costs and a decrease in stock-based compensation expenses[10](index=10&type=chunk) [Management Commentary](index=3&type=section&id=Management%20Commentary) Management discusses Q3 operational challenges and successes, including the FDA hold resolution, avocado pricing, Prepared segment growth, and a significant legal development in Mexico [Management Commentary](index=3&type=section&id=Management%20Commentary) CEO Lee Cole acknowledged Q3 challenges in the Fresh segment due to the temporary FDA detention hold (now resolved) and lower avocado selling prices, highlighting the outstanding growth and higher volumes in the Prepared segment, and also noted a significant legal milestone in Mexico regarding maquila status, strengthening the company's position for IVA recovery and defense against a 2013 assessment, and projected strong fiscal 2026 sales for the Prepared segment - Fresh segment results were adversely affected by a temporary FDA detention hold tied to trace detection of Imazalil in a single shipment from the Mexican facility, which required enhanced testing and slowed cross-border movement[11](index=11&type=chunk) - Third quarter avocado selling prices were significantly lower sequentially versus the second quarter as avocado supply from Mexico, California, and Peru converged[11](index=11&type=chunk) - The Prepared segment delivered **outstanding growth with higher volumes**[11](index=11&type=chunk) - The FDA matter has been resolved as of September 2, 2025, and is believed to be a non-recurring event[11](index=11&type=chunk) - A Federal Court in Mexico formally recognized Calavo de Mexico as a maquila, strengthening the company's position to recover value-added tax ("IVA") receivables and bolstering its defense in the 2013 assessment[11](index=11&type=chunk) - The Prepared segment projects sales of approximately **$115 million for fiscal 2026**, with July sales annualizing to over $100 million on a monthly run-rate basis[11](index=11&type=chunk) [Consolidated Financial Review for Continuing Operations](index=3&type=section&id=Consolidated%20Financial%20Review%20for%20Continuing%20Operations) This section details Calavo Growers' financial performance for the third quarter and nine-month period, covering overall financials, segment-specific results, and liquidity [Third Quarter 2025 Financial Performance](index=3&type=section&id=Third%20Quarter%202025%20Consolidated%20Financial%20Review%20for%20Continuing%20Operations) Calavo Growers' third quarter saw a slight dip in total net sales and gross profit, primarily due to Fresh segment challenges and FDA-related costs, however, SG&A expenses decreased significantly, and adjusted net income showed a modest increase [Overall Financials](index=3&type=section&id=Overall%20Financials_Q3_2025) This subsection provides a summary of Calavo Growers' consolidated net sales, gross profit, operating expenses, and net income for the third quarter of 2025 Third Quarter 2025 Overall Financials | Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | | Net Sales | $178,822 | $179,596 | -0.4% | | Gross Profit | $18,198 | $20,093 | -9.4% | | SG&A Expenses | $9,232 | $10,510 | -12.2% | | Net Income (GAAP) | $4,714 | $5,395 | -12.6% | | Diluted EPS (GAAP) | $0.26 | $0.30 | -13.3% | | Adjusted Net Income (Non-GAAP) | $10,156 | $10,005 | +1.5% | | Adjusted Diluted EPS (Non-GAAP) | $0.57 | $0.56 | +1.8% | | Adjusted EBITDA (Non-GAAP) | $15,051 | $12,909 | +16.6% | - SG&A expenses declined **12%** from the prior year quarter, primarily due to a reduction in professional and consulting fees (including lower FCPA investigation-related legal expenses), partially offset by increased bonus expense[14](index=14&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance_Q3_2025) This subsection details the net sales and gross profit performance of Calavo Growers' Fresh and Prepared segments for the third quarter of 2025 Third Quarter 2025 Segment Performance | Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | | **Fresh Segment:** | | | | | Net Sales | $155,851 | $163,218 | -4.5% | | Gross Profit | $12,427 | $18,175 | -31.6% | | **Prepared Segment:** | | | | | Net Sales | $22,971 | $16,378 | +40.2% | | Gross Profit | $5,771 | $1,918 | +200.9% | - Fresh segment sales were down **5%** year over year, reflecting an **8% decrease** in overall cartons sold, including lower avocado volumes (down 5%) and tomato volumes (down 27%)[16](index=16&type=chunk) - Fresh segment gross profit was down **32%**, primarily due to lower avocado volumes and approximately **$4.2 million of discrete costs** associated with a temporary FDA detention hold on certain avocado imports from Mexico[16](index=16&type=chunk) - Prepared segment sales were up **40%**, driven primarily by volume growth of approximately **35%**, complemented by modestly higher average selling prices, reflecting strong demand and the benefits of scaling programs with customers[16](index=16&type=chunk) - Prepared segment gross profit increased to **$5.8 million (up 201%)**, primarily reflecting improved operational efficiency and stronger cost management[16](index=16&type=chunk) [Nine-Month Period Ended July 31, 2025 Financial Performance](index=4&type=section&id=Nine-Month%202025%20Consolidated%20Financial%20Review%20for%20Continuing%20Operations) For the nine-month period, Calavo Growers reported a 7% increase in total net sales, with gross profit seeing a modest increase, while SG&A expenses significantly decreased, and net income and adjusted net income both showed substantial year-over-year improvements, driven by strong Prepared segment performance and cost management [Overall Financials](index=4&type=section&id=Overall%20Financials_9M_2025) This subsection provides a summary of Calavo Growers' consolidated net sales, gross profit, operating expenses, and net income for the nine-month period ended July 31, 2025 Nine-Month Period 2025 Overall Financials | Metric | 9M 2025 (in thousands) | 9M 2024 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | | Net Sales | $523,753 | $491,585 | +6.5% | | Gross Profit | $52,015 | $51,514 | +1.0% | | SG&A Expenses | $29,822 | $36,993 | -19.4% | | Net Income (GAAP) | $15,979 | $9,281 | +72.2% | | Diluted EPS (GAAP) | $0.89 | $0.52 | +71.2% | | Adjusted Net Income (Non-GAAP) | $23,807 | $19,231 | +23.8% | | Adjusted Diluted EPS (Non-GAAP) | $1.33 | $1.08 | +23.1% | | Adjusted EBITDA (Non-GAAP) | $35,733 | $29,946 | +19.3% | - SG&A expenses for the nine-month period were down **19%** from the prior year period, primarily due to a reduction in professional and consulting fees (including reduced FCPA investigation-related legal expenses), a reduction in compensation expenses reflecting lower headcount and severance costs, and a decrease in stock-based compensation expenses[19](index=19&type=chunk) [Segment Performance](index=4&type=section&id=Segment%20Performance_9M_2025) This subsection details the net sales and gross profit performance of Calavo Growers' Fresh and Prepared segments for the nine-month period ended July 31, 2025 Nine-Month Period 2025 Segment Performance | Metric | 9M 2025 Fresh (in thousands) | 9M 2025 Prepared (in thousands) | 9M 2024 Fresh (in thousands) | 9M 2024 Prepared (in thousands) | | :-------------------- | :----------------------------- | :------------------------------ | :----------------------------- | :------------------------------ | | Net Sales | $470,307 | $53,446 | $442,999 | $48,586 | | Cost of sales | $431,690 | $40,048 | $402,041 | $38,030 | | Gross profit | $38,617 | $13,398 | $40,958 | $10,556 | - Fresh segment sales were up **6%**, driven by higher average avocado pricing year over year, partially offset by a decline in avocado and tomato sales[23](index=23&type=chunk) - Fresh segment gross profit was down **6%** from the prior year period, primarily reflecting lower avocado and tomato volumes and approximately **$4.2 million of discrete costs** associated with a temporary FDA detention hold on certain avocado imports from Mexico in the third quarter[23](index=23&type=chunk) - Prepared segment sales were up **10%**, reflecting higher volumes and expanded programs with key customers[23](index=23&type=chunk) - Prepared segment gross profit increased **27% to $13.4 million**, reflecting higher sales volumes, lower fruit input costs compared to last year, and improved operating efficiencies[23](index=23&type=chunk) [Balance Sheet and Liquidity](index=4&type=section&id=Balance%20Sheet%20and%20Liquidity) As of July 31, 2025, Calavo Growers maintained a strong liquidity position with $63.8 million in cash and cash equivalents and $114.3 million in available liquidity, with no borrowings under its revolving credit facility - Cash and cash equivalents were **$63.8 million** as of July 31, 2025[21](index=21&type=chunk) - Available liquidity was **$114.3 million**, defined as cash and cash equivalents plus available borrowing capacity under the revolving credit facility[21](index=21&type=chunk) - The company had **no borrowings** under its credit facility and total debt of **$5.1 million** consisting of other long-term obligations and finance leases as of July 31, 2025[21](index=21&type=chunk) [Non-GAAP Financial Measures](index=1&type=section&id=Non-GAAP%20Financial%20Measures) This section defines Calavo Growers' non-GAAP financial measures, explains their rationale, and provides detailed reconciliations to GAAP equivalents [Definition and Rationale](index=1&type=section&id=Definition%20and%20Rationale) Calavo Growers uses non-GAAP measures such as EBITDA, adjusted EBITDA, adjusted net income (loss), and adjusted net income (loss) per diluted share to provide investors with a clearer view of core operating performance and to help isolate unusual items, excluding specific items like interest, taxes, depreciation, amortization, stock-based compensation, acquisition/restructuring costs, litigation, foreign currency, asset impairments, tariffs, and one-time items, with the calculation of Adjusted Net Income modified in Q3 2025 to add back stock-based compensation expense for enhanced comparability - Non-GAAP measures include EBITDA, adjusted EBITDA, adjusted net income (loss), and adjusted net income (loss) per diluted share[22](index=22&type=chunk)[24](index=24&type=chunk) - EBITDA is defined as net income (loss) from continuing operations attributable to Calavo Growers, Inc. excluding interest income and expense, income tax (benefit) provision, depreciation and amortization, and stock-based compensation expense[22](index=22&type=chunk) - Adjusted EBITDA includes further adjustments for acquisition-related costs, restructuring-related costs, certain litigation/internal investigation costs, foreign currency gain (loss), asset impairments, discrete tariff or other tax charges, and one-time items[22](index=22&type=chunk) - Adjusted net income (loss) excludes acquisition-related costs, restructuring-related costs, certain litigation/internal investigation costs, foreign currency loss (gain), asset impairments, discrete tariff or other tax charges, and one-time items[24](index=24&type=chunk) - During the third quarter of fiscal 2025, the calculation of Adjusted Net Income was modified to add back stock-based compensation expense to enhance comparability with industry peers and provide a clearer representation of core operating performance[4](index=4&type=chunk)[35](index=35&type=chunk) - Management believes these measures are useful to investors because they help isolate unusual items not indicative of ongoing operations and reflect how management monitors operating performance and allocates resources[25](index=25&type=chunk) [Reconciliation of Adjusted Net Income](index=10&type=section&id=RECONCILIATION%20OF%20ADJUSTED%20NET%20INCOME%20AND%20ADJUSTED%20NET%20INCOME%20PER%20DILUTED%20SHARE%20%28UNAUDITED%29) This section provides a detailed reconciliation of GAAP net income from continuing operations to adjusted net income for both the three-month and nine-month periods ended July 31, 2025 and 2024, highlighting specific non-GAAP adjustments Reconciliation of Adjusted Net Income and Adjusted Net Income Per Diluted Share | Adjustment Category | Q3 2025 (in thousands) | Q3 2024 (in thousands) | 9M 2025 (in thousands) | 9M 2024 (in thousands) | | :---------------------------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net income from continuing operations attributable to Calavo Growers, Inc. | $4,714 | $5,395 | $15,979 | $9,281 | | Restructure costs | — | — | — | $1,037 | | Expenses related to Mexican tax matters | $307 | $225 | $858 | $810 | | Professional fees related to internal investigation and legal settlement | $42 | $1,395 | $967 | $6,431 | | Foreign currency loss (gain) | $2,483 | $4,203 | $2,488 | $2,799 | | Tariffs | $11 | — | $951 | — | | Stock-Based Compensation | $280 | $388 | $875 | $1,736 | | FDA Regulatory Hold–Related Charges | $4,231 | — | $4,231 | — | | Tax impact of adjustments | $(1,912) | $(1,601) | $(2,542) | $(2,863) | | **Adjusted net income from continuing operations** | **$10,156** | **$10,005** | **$23,807** | **$19,231** | | Diluted EPS from continuing operations (GAAP) | $0.26 | $0.30 | $0.89 | $0.52 | | **Adjusted net income from continuing operations per diluted share** | **$0.57** | **$0.56** | **$1.33** | **$1.08** | - FDA Regulatory Hold–Related Charges of **$4.231 million** were incurred in Q3 and 9M 2025, representing third-party inspection and testing costs, incremental logistics/handling expenses, and inventory write-downs due to a temporary FDA detention hold on certain avocado imports from Mexico[36](index=36&type=chunk)[44](index=44&type=chunk) - Professional fees related to internal investigation and legal settlement significantly decreased from **$1.395 million in Q3 2024 to $42 thousand in Q3 2025**, and from **$6.431 million in 9M 2024 to $967 thousand in 9M 2025**, primarily due to reduced FCPA investigation-related legal expenses[36](index=36&type=chunk)[38](index=38&type=chunk) [Reconciliation of EBITDA and Adjusted EBITDA](index=11&type=section&id=RECONCILIATION%20OF%20EBITDA%20AND%20ADJUSTED%20EBITDA%20%28UNAUDITED%29) This section provides a detailed reconciliation of GAAP net income from continuing operations to EBITDA and adjusted EBITDA for both the three-month and nine-month periods ended July 31, 2025 and 2024, outlining the specific adjustments made Reconciliation of EBITDA and Adjusted EBITDA | Adjustment Category | Q3 2025 (in thousands) | Q3 2024 (in thousands) | 9M 2025 (in thousands) | 9M 2024 (in thousands) | | :---------------------------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net income from continuing operations attributable to Calavo Growers, Inc. | $4,714 | $5,395 | $15,979 | $9,281 | | Interest Income | $(879) | $(100) | $(2,486) | $(340) | | Interest Expense | $199 | $833 | $616 | $2,619 | | Provision for Income Taxes | $1,807 | $(1,441) | $5,598 | $(478) | | Depreciation and Amortization | $1,856 | $2,011 | $5,656 | $6,121 | | Stock-Based Compensation | $280 | $388 | $875 | $1,736 | | **EBITDA from continuing operations** | **$7,977** | **$7,086** | **$26,238** | **$18,939** | | Restructure costs | — | — | — | $967 | | Expenses related to Mexican tax matters | $307 | $225 | $858 | $810 | | Professional fees related to internal investigation and legal settlement | $42 | $1,395 | $967 | $6,431 | | Foreign currency loss (gain) | $2,483 | $4,203 | $2,488 | $2,799 | | Tariffs | $11 | — | $951 | — | | FDA Regulatory Hold–Related Charges | $4,231 | — | $4,231 | — | | **Adjusted EBITDA from continuing operations** | **$15,051** | **$12,909** | **$35,733** | **$29,946** | - EBITDA from continuing operations increased by **12.6% in Q3 2025** and **38.5% in 9M 2025** compared to the prior year periods[43](index=43&type=chunk) - Adjusted EBITDA from continuing operations increased by **16.6% in Q3 2025** and **19.3% in 9M 2025** compared to the prior year periods[43](index=43&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) This section provides an overview of Calavo Growers, Inc., its business operations, and a safe harbor statement regarding forward-looking information and associated risks [About Calavo Growers, Inc.](index=5&type=section&id=About%20Calavo%20Growers%2C%20Inc.) Calavo Growers, Inc. is a global leader in processing and distributing avocados, tomatoes, papayas, and guacamole, operating under its trusted brand name, sub-brands, and private labels, founded in 1924, the company emphasizes innovation, sustainable practices, and market growth, serving a wide range of customers worldwide from its headquarters in Santa Paula, California - Calavo Growers, Inc. is a global leader in the processing and distribution of avocados, tomatoes, papayas and guacamole[27](index=27&type=chunk) - Calavo products are sold under the trusted Calavo brand name, proprietary sub-brands, private label and store brands[27](index=27&type=chunk) - Founded in 1924, Calavo has a rich culture of innovation, sustainable practices and market growth[27](index=27&type=chunk) - The Company serves retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers worldwide[27](index=27&type=chunk) [Safe Harbor Statement](index=5&type=section&id=Safe%20Harbor%20Statement) This section contains forward-looking statements regarding future events and financial results, which are subject to various risks, uncertainties, and assumptions, cautioning that actual results may differ materially from projections due to factors such as management team dynamics, weather, market price sensitivity, regulatory changes, supply chain disruptions, acquisitions, cybersecurity risks, dependence on customers/personnel, labor issues, competition, recalls, environmental regulations, and international business risks, including tax disputes and regulatory scrutiny like FDA detention holds - The press release contains forward-looking statements relating to future events and results that involve risks, uncertainties, and assumptions[28](index=28&type=chunk) - Risks and uncertainties that may cause actual results to differ materially include, but are not limited to, management team ability, weather impact, seasonality, market price sensitivity of agricultural products, regulatory changes (USDA-APHIS, SADER), supply chain disruptions, acquisition risks, cybersecurity, dependence on large customers and key personnel, wage inflation, labor disputes, competitive pressures, recalls, environmental regulations, and international business risks[29](index=29&type=chunk) - Specific risks mentioned include the resolution of pending internal and external investigations, legal claims and tax disputes (e.g., SAT assessment), and risks related to enhanced regulatory scrutiny or inspection protocols, including detention holds by the FDA[29](index=29&type=chunk) [Unaudited Financial Statements](index=7&type=section&id=Unaudited%20Financial%20Statements) This section presents Calavo Growers' unaudited condensed consolidated balance sheets, statements of operations, and segment-specific net sales and gross profit [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20%28UNAUDITED%29) This section presents the unaudited condensed consolidated balance sheets of Calavo Growers, Inc. as of July 31, 2025, and October 31, 2024, detailing assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheets | Metric (in thousands) | July 31, 2025 | October 31, 2024 | Change | | :-------------------------------- | :------------ | :--------------- | :----- | | **Assets:** | | | | | Cash and cash equivalents | $63,754 | $57,031 | +$6,723 | | Total current assets | $159,112 | $158,579 | +$533 | | Total assets | $301,249 | $301,119 | +$130 | | **Liabilities:** | | | | | Total current liabilities | $69,201 | $73,205 | -$4,004 | | Total long-term liabilities | $24,048 | $26,138 | -$2,090 | | **Shareholders' Equity:** | | | | | Total Calavo Growers, Inc shareholders' equity | $206,424 | $200,332 | +$6,092 | | Total shareholders' equity | $208,000 | $201,776 | +$6,224 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20%28UNAUDITED%29) This section provides the unaudited condensed consolidated statements of operations for the three-month and nine-month periods ended July 31, 2025 and 2024, detailing net sales, cost of sales, gross profit, operating expenses, and net income (loss) Condensed Consolidated Statements of Operations | Metric (in thousands) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :---------------------------------------------------- | :------ | :------ | :------ | :------ | | Net sales | $178,822 | $179,596 | $523,753 | $491,585 | | Cost of sales | $160,624 | $159,503 | $471,738 | $440,071 | | Gross profit | $18,198 | $20,093 | $52,015 | $51,514 | | Selling, general and administrative | $9,232 | $10,510 | $29,822 | $36,993 | | Operating income | $8,659 | $9,358 | $21,335 | $13,711 | | Net income from continuing operations | $4,736 | $5,365 | $16,111 | $9,298 | | Net income (loss) attributable to Calavo Growers, Inc. | $4,714 | $(732) | $15,979 | $(937) | | Diluted EPS from Continuing Operations | $0.26 | $0.30 | $0.89 | $0.52 | [Net Sales and Gross Profit by Business Segment](index=9&type=section&id=NET%20SALES%20AND%20GROSS%20PROFIT%20BY%20BUSINESS%20SEGMENT%20%28UNAUDITED%29) This section presents the unaudited net sales and gross profit broken down by the Fresh and Prepared business segments for the three-month and nine-month periods ended July 31, 2025 and 2024 Net Sales and Gross Profit by Business Segment | Metric (in thousands) | Q3 2025 Fresh | Q3 2025 Prepared | Q3 2024 Fresh | Q3 2024 Prepared | 9M 2025 Fresh | 9M 2025 Prepared | 9M 2024 Fresh | 9M 2024 Prepared | | :-------------------- | :------------ | :--------------- | :------------ | :--------------- | :------------ | :--------------- | :------------ | :--------------- | | Net sales | $155,851 | $22,971 | $163,218 | $16,378 | $470,307 | $53,446 | $442,999 | $48,586 | | Cost of sales | $143,424 | $17,200 | $145,043 | $14,460 | $431,690 | $40,048 | $402,041 | $38,030 | | Gross profit | $12,427 | $5,771 | $18,175 | $1,918 | $38,617 | $13,398 | $40,958 | $10,556 |

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-35720 (Exact name of registrant as specified in its charter) Delaware 45-3052669 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . Commission File No. 0-13375 LSI INDUSTRIES INC. (Exact name of Registrant as specified in its charter) Ohio (State or other jurisdiction of incorporation or organization) 10 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-34249 FARMER BROS. CO. (Exact Name of Registrant as Specified in Its Charter) Delaware 95-0725980 (State or other jurisdiction of incorporation or ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) This section details Optical Cable Corporation's official registrant information, including address, telephone, and commission file number - Registrant's exact name: **OPTICAL CABLE CORPORATION**[3](index=3&type=chunk) - Commission file number: **0-27022**[3](index=3&type=chunk) - Principal executive offices: **5290 Concourse Drive, Roanoke, Virginia 24019**[3](index=3&type=chunk) [Filing Status](index=1&type=section&id=Filing%20Status) This section confirms the company's compliance with SEC filing requirements and its classification as a non-accelerated filer and smaller reporting company - The registrant has filed all required reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days[5](index=5&type=chunk) - The registrant has submitted electronically every Interactive Data File required by Rule 405 of Regulation S-T during the preceding 12 months[5](index=5&type=chunk) - The registrant is classified as a **Non-accelerated Filer** and a **Smaller Reporting Company**[5](index=5&type=chunk) - As of September 3, 2025, **8,870,444** shares of Common Stock, no par value, were outstanding[5](index=5&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) [Form 10-Q Index](index=3&type=section&id=Form%2010-Q%20Index) This section provides an index to the various parts and items included in the Form 10-Q, outlining the structure of financial information and other disclosures - The index lists Part I (Financial Information) including Item 1 (Financial Statements), Item 2 (Management's Discussion and Analysis), and Item 4 (Controls and Procedures)[7](index=7&type=chunk) - Part II (Other Information) includes Item 6 (Exhibits) and the Signatures[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements of Optical Cable Corporation for the periods ended July 31, 2025, and October 31, 2024, along with accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets present the company's financial position, showing slight decreases in total assets and liabilities, and a notable decline in shareholders' equity due to net loss and redeemable common stock issuance | Metric | July 31, 2025 ($) | October 31, 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :------------ | :--------------- | :----- | :--------- | | Total Assets | 40,167,958 | 40,358,011 | -190,053 | -0.47% | | Total Liabilities | 18,735,906 | 19,516,095 | -780,189 | -4.00% | | Total Shareholders' Equity | 18,229,727 | 20,841,916 | -2,612,189 | -12.53% | | Redeemable Common Stock | 3,202,325 | 0 | 3,202,325 | N/A | - Current installments of long-term debt significantly increased from **$57,184** at October 31, 2024, to **$2,585,094** at July 31, 2025, primarily due to the reclassification of the Virginia Real Estate Loan[10](index=10&type=chunk)[34](index=34&type=chunk) - Note payable, revolver - current decreased from **$8,321,782** to **$6,465,321**, reflecting net repayments on the Revolver[10](index=10&type=chunk)[156](index=156&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show a significant improvement in profitability for both the three-month and nine-month periods ended July 31, 2025, driven by increased net sales and gross profit margins | Metric | 3 Months Ended July 31, 2025 ($) | 3 Months Ended July 31, 2024 ($) | Change (YoY) ($) | Change (YoY %) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | :------------- | | Net sales | 19,916,919 | 16,221,671 | 3,695,248 | 22.78% | | Gross profit | 6,319,311 | 3,920,224 | 2,399,087 | 61.19% | | Income (loss) from operations | 562,474 | (1,337,553) | 1,900,027 | 142.06% | | Net income (loss) | 301,886 | (1,557,053) | 1,858,939 | 119.39% | | Net income (loss) per share: Basic and diluted | 0.04 | (0.20) | 0.24 | 120.00% | | Metric | 9 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2024 ($) | Change (YoY) ($) | Change (YoY %) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | :------------- | | Net sales | 53,209,284 | 47,188,534 | 6,020,750 | 12.76% | | Gross profit | 16,280,446 | 11,672,382 | 4,608,064 | 39.48% | | Income (loss) from operations | (719,080) | (4,038,375) | 3,319,295 | 82.20% | | Net income (loss) | (1,503,467) | (4,583,673) | 3,080,206 | 67.20% | | Net income (loss) per share: Basic and diluted | (0.19) | (0.59) | 0.40 | 67.80% | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) The statements detail changes in shareholders' equity, highlighting the impact of net losses, share-based compensation, and the issuance and subsequent increase in redemption value of redeemable common stock | Metric | July 31, 2025 ($) | October 31, 2024 ($) | Change ($) | | :-------------------------- | :------------ | :--------------- | :----- | | Total Shareholders' Equity | 18,229,727 | 20,841,916 | -2,612,189 | | Retained Earnings | 2,579,225 | 5,377,500 | -2,798,275 | | Common Stock Amount | 15,650,502 | 15,464,416 | 186,086 | | Common Stock Shares | 8,228,245 | 8,220,344 | 7,901 | - Net loss for the nine months ended July 31, 2025, was **$1,503,467**, contributing to the decrease in retained earnings[12](index=12&type=chunk)[15](index=15&type=chunk) - Share-based compensation, net, for the nine months ended July 31, 2025, was **$186,086**, increasing common stock amount[15](index=15&type=chunk)[158](index=158&type=chunk) - Issuance costs of redeemable common stock totaled **$92,483**, and the increase to aggregate redemption value of redeemable common stock was **$1,202,325**, both reducing retained earnings[15](index=15&type=chunk)[158](index=158&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statements indicate a net increase in cash for the nine months ended July 31, 2025, primarily driven by operating activities, despite cash used in investing and financing activities | Cash Flow Activity | 9 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2024 ($) | Change (YoY) ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net cash provided by operating activities | 616,745 | 665,046 | -48,301 | | Net cash used in investing activities | (233,586) | (43,227) | -190,359 | | Net cash used in financing activities | (205,992) | (1,293,793) | 1,087,801 | | Net increase (decrease) in cash | 177,167 | (671,974) | 849,141 | | Cash at end of period | 421,414 | 796,735 | -375,321 | - Operating cash flow was positively impacted by depreciation and amortization (**$608,001**) and share-based compensation expense (**$293,399**) in 2025[18](index=18&type=chunk)[163](index=163&type=chunk) - Investing activities in 2025 primarily involved purchases of property and equipment (**$217,048**)[18](index=18&type=chunk)[165](index=165&type=chunk) - Financing activities in 2025 included the issuance of redeemable common stock (**$1,907,517**) and net repayments on the revolver (**$1,856,461**)[18](index=18&type=chunk)[166](index=166&type=chunk) [Condensed Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide additional information and disclosures to the condensed consolidated financial statements, covering accounting policies, specific financial line items, and recent corporate activities [(1) General](index=8&type=section&id=(1)%20General) This note outlines the basis of presentation for the unaudited interim financial statements and highlights various factors that could impact future operating results, such as macroeconomic conditions and supply chain constraints - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions, and do not include all information required for complete annual statements[20](index=20&type=chunk) - Future results may be impacted by changing macroeconomic conditions, supply chain and labor constraints, market conditions, seasonality, inflation, interest rates, and timing of key customer projects[20](index=20&type=chunk) [(2) Stock Incentive Plan and Other Share‑Based Compensation](index=8&type=section&id=(2)%20Stock%20Incentive%20Plan%20and%20Other%20Share%E2%80%91Based%20Compensation) This note details the company's stock incentive plan, share-based compensation expense, and restricted stock award activity, including grants to non-employee Directors - Approximately **371,000** shares remained available for grant under the 2017 Stock Incentive Plan as of July 31, 2025[21](index=21&type=chunk) | Period | Share-based Compensation Expense ($) | | :-------------------------------- | :------------------------------- | | Three Months Ended July 31, 2025 | 107,101 | | Nine Months Ended July 31, 2025 | 293,399 | | Three Months Ended July 31, 2024 | 78,079 | | Nine Months Ended July 31, 2024 | 328,871 | - During the three months ended July 31, 2025, OCC granted **36,228** restricted stock awards to non-employee Directors with a one-year vesting period[25](index=25&type=chunk) - As of July 31, 2025, the estimated compensation cost related to unvested equity-based awards is approximately **$857,000**, to be recognized over a **3.7-year** weighted-average period[27](index=27&type=chunk) [(3) Allowance for Credit Losses for Trade Accounts Receivable](index=9&type=section&id=(3)%20Allowance%20for%20Credit%20Losses%20for%20Trade%20Accounts%20Receivable) This note summarizes the changes in the allowance for credit losses for trade accounts receivable for the nine-month periods | Metric | 9 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2024 ($) | | :-------------------------- | :--------------------------- | :--------------------------- | | Balance at beginning of period | 92,125 | 71,189 | | Bad debt expense (recovery) | 496 | (447) | | Balance at end of period | 92,621 | 70,742 | [(4) Inventories](index=9&type=section&id=(4)%20Inventories) This note provides a breakdown of inventory components as of July 31, 2025, and October 31, 2024 | Inventory Component | July 31, 2025 ($) | October 31, 2024 ($) | | :------------------ | :------------ | :--------------- | | Finished goods | 5,488,480 | 5,098,148 | | Work in process | 4,449,031 | 3,724,999 | | Raw materials | 8,455,917 | 9,562,563 | | Production supplies | 304,006 | 339,607 | | Total | 18,697,434 | 18,725,317 | - Total inventories slightly decreased from **$18,725,317** at October 31, 2024, to **$18,697,434** at July 31, 2025[29](index=29&type=chunk) [(5) Product Warranties](index=9&type=section&id=(5)%20Product%20Warranties) This note details the accrual for estimated product warranty claims and the related expense for the reported periods | Metric | July 31, 2025 ($) | October 31, 2024 ($) | | :-------------------------- | :------------ | :--------------- | | Accrual for estimated product warranty claims | 105,000 | 65,000 | | Period | Warranty Claims Expense ($) | | :-------------------------------- | :---------------------- | | Three Months Ended July 31, 2025 | 53,088 | | Nine Months Ended July 31, 2025 | 85,029 | | Three Months Ended July 31, 2024 | 9,153 | | Nine Months Ended July 31, 2024 | 60,994 | | Warranty Accrual Changes | 9 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Balance at beginning of period | 65,000 | 80,000 | | Liabilities accrued for warranties issued | 109,520 | 84,792 | | Warranty claims and costs paid | (45,029) | (65,994) | | Changes in liability for pre-existing warranties | (24,491) | (23,798) | | Balance at end of period | 105,000 | 75,000 | [(6) Long-term Debt and Notes Payable](index=10&type=section&id=(6)%20Long-term%20Debt%20and%20Notes%20Payable) This note describes the company's credit facilities, including the Virginia Real Estate Loan and the Revolving Credit Master Promissory Note, detailing their terms, balances, and security - The Virginia Real Estate Loan has an outstanding balance of **$2.6 million** as of July 31, 2025, and October 31, 2024, with its maturity date of May 5, 2026, leading to its reclassification as a current liability[34](index=34&type=chunk)[35](index=35&type=chunk) - The Revolver with SLR has a maximum aggregate principal amount of **$18.0 million**, with interest accruing at **1.5%** above the Prime Rate (**9.0%** at July 31, 2025)[37](index=37&type=chunk) | Revolver Metric | July 31, 2025 ($ millions) | October 31, 2024 ($ millions) | | :-------------------------- | :------------ | :--------------- | | Outstanding borrowings | 6.5 | 8.3 | | Available credit | 4.4 | 3.2 | - The Revolver balance is classified as a current liability due to a lockbox arrangement and a 'subjective acceleration clause'[38](index=38&type=chunk) [(7) Leases](index=11&type=section&id=(7)%20Leases) This note provides comprehensive details on the company's operating and finance leases, including lease terms, assets, liabilities, expenses, and future payment obligations - The company has operating leases for office, manufacturing, and warehouse space in Plano, Texas (expiring Nov 2029) and Roanoke, Virginia (expiring Apr 2026), and for office equipment (expiring Nov 2029)[42](index=42&type=chunk)[43](index=43&type=chunk) | Lease Metric | July 31, 2025 ($) | October 31, 2024 ($) | | :-------------------------------- | :------------ | :--------------- | | Operating lease right-of-use assets | 1,795,891 | 1,872,206 | | Operating lease liabilities (current) | 411,273 | 376,965 | | Operating lease liabilities (noncurrent) | 1,444,593 | 1,525,423 | | Finance lease right-of-use assets | 274,770 | 111,844 | | Finance lease liabilities (current) | 72,903 | 39,277 | | Finance lease liabilities (noncurrent) | 176,879 | 54,174 | | Lease Expense/Cash Paid | 3 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2025 ($) | 3 Months Ended July 31, 2024 ($) | 9 Months Ended July 31, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease expense | 153,107 | 462,766 | 109,143 | 327,431 | | Cash paid for operating lease liabilities | 147,390 | 432,529 | 112,670 | 335,628 | | Finance lease interest expense | 2,070 | 4,098 | 1,297 | 4,224 | | Finance lease amortization expense | 10,511 | 25,260 | 7,374 | 22,123 | | Cash paid for finance lease principal | 12,449 | 31,854 | 9,419 | 27,927 | | Future Lease Payments | Operating Leases ($) | Finance Leases ($) | | :-------------------------- | :--------------- | :------------- | | Total undiscounted lease payments | 2,263,334 | 290,710 | | Present value discount | (407,468) | (40,928) | | Total lease liability | 1,855,866 | 249,782 | [(8) Fair Value Measurements](index=13&type=section&id=(8)%20Fair%20Value%20Measurements) This note states that the carrying amounts of most financial instruments approximate their fair value due to their short maturity or variable interest rates - Carrying amounts for cash, trade accounts receivable, other receivables, current installments of long-term debt, accounts payable, accrued compensation, and income taxes payable approximate fair value due to short maturity[58](index=58&type=chunk) - The carrying value of the note payable (revolver) and long-term debt approximates fair value because interest rates vary with the market[58](index=58&type=chunk) [(9) Net Income (Loss) Per Share](index=14&type=section&id=(9)%20Net%20Income%20(Loss)%20Per%20Share) This note provides the reconciliation of the numerators and denominators used in calculating basic and diluted net income (loss) per share | Metric | 3 Months Ended July 31, 2025 ($) | 3 Months Ended July 31, 2024 ($) | 9 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) (numerator) | 301,886 | (1,557,053) | (1,503,467) | (4,583,673) | | Shares (denominator) | 8,394,988 | 7,739,266 | 7,900,901 | 7,753,148 | | Basic and diluted net income (loss) per share | 0.04 | (0.20) | (0.19) | (0.59) | - Nonvested shares totaling **370,720** as of July 31, 2025, were excluded from EPS computation for the nine months ended July 31, 2025, as their inclusion would have been antidilutive[61](index=61&type=chunk) [(10) Segment Information and Business and Credit Concentrations](index=14&type=section&id=(10)%20Segment%20Information%20and%20Business%20and%20Credit%20Concentrations) This note discusses the company's credit risk management, customer concentration, and confirms that it operates as a single reportable segment - Concentration of credit risk with respect to trade receivables is normally limited due to the company's large number of customers, managed through credit approvals and monitoring[63](index=63&type=chunk) | Period | Consolidated Net Sales Attributable to One Distributor Customer | | :-------------------------------- | :-------------------------------------------------------------- | | Three Months Ended July 31, 2025 | 20.5% | | Nine Months Ended July 31, 2025 | 19.4% | | Three Months Ended July 31, 2024 | 18.7% | | Nine Months Ended July 31, 2024 | 16.9% | - The Company has a single reportable segment for purposes of segment reporting[65](index=65&type=chunk) [(11) Revenue Recognition](index=15&type=section&id=(11)%20Revenue%20Recognition) This note outlines the company's policies for revenue recognition, including when control transfers, payment terms, and the disaggregation of revenue by geographic region - Revenue from product sales is recognized at the point in time when control transfers to the customer, typically upon shipment or delivery from the manufacturing facility[68](index=68&type=chunk)[70](index=70&type=chunk) | Liability Type | July 31, 2025 ($) | October 31, 2024 ($) | | :-------------------------- | :------------ | :--------------- | | Contract liability (advance consideration) | 270,870 | 70,263 | | Refund liability (price adjustments, rebates, returns) | 339,381 | 232,692 | | Geographic Net Sales | 3 Months Ended July 31, 2025 ($) | 3 Months Ended July 31, 2024 ($) | 9 Months Ended July 31, 2025 ($) | 9 Months Ended July 31, 2024 ($) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | 15,949,437 | 13,077,203 | 41,819,451 | 38,071,069 | | Outside the United States | 3,967,482 | 3,144,468 | 11,389,833 | 9,117,465 | | Total net sales | 19,916,919 | 16,221,671 | 53,209,284 | 47,188,534 | [(12) Issuance of Redeemable Restricted Common Stock](index=16&type=section&id=(12)%20Issuance%20of%20Redeemable%20Restricted%20Common%20Stock) This note details the issuance of redeemable restricted common stock to Lightera, LLC, as part of a strategic collaboration, and the accounting treatment for this instrument - On July 7, 2025, the Company issued **642,199** shares of common stock to Lightera, LLC for **$2.0 million** cash consideration, representing **7.24%** of OCC's outstanding common shares[78](index=78&type=chunk)[107](index=107&type=chunk) - The shares are subject to a Call Option by OCC and a Put Option by Lightera, exercisable after two years (July 7, 2027), with a redemption price based on the greater of issuance price or a 10-day average trading price[78](index=78&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - The common stock is classified as redeemable and recorded outside of permanent equity, with an initial value of **$1,907,517** (net of **$92,483** issuance costs) and a redemption value of **$3.2 million** as of July 31, 2025[86](index=86&type=chunk) - The Call and Put Options were concluded to be embedded derivative instruments, but their fair value was insignificant as the strike price adjusts with the underlying common stock's trading price[87](index=87&type=chunk) [(13) Contingencies](index=18&type=section&id=(13)%20Contingencies) This note addresses the company's involvement in various claims and legal actions, stating management's opinion on their potential impact - Management believes that the ultimate disposition of current claims, legal actions, and regulatory reviews will not have a material adverse effect on the company's financial position, results of operations, or liquidity[88](index=88&type=chunk) [(14) New Accounting Standards Not Yet Adopted](index=18&type=section&id=(14)%20New%20Accounting%20Standards%20Not%20Yet%20Adopted) This note provides an overview of recently issued FASB Accounting Standards Updates (ASUs) that have not yet been adopted by the company and their potential impact - ASU 2023-07 (Segment Reporting), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03/2025-01 (Expense Disaggregation) are being evaluated for their impact on financial statement disclosures[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - ASU 2025-05 (Measurement of Credit Losses for Accounts Receivable) is not expected to have a material impact on the company's financial position, operating results, liquidity, or disclosures[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and liquidity, discussing key trends, operational results, and future outlook [Forward-Looking Information](index=19&type=section&id=Forward-Looking%20Information) This subsection serves as a cautionary statement regarding forward-looking information, outlining numerous variables, uncertainties, contingencies, and risks that could cause actual results to differ materially from expectations - Forward-looking information is subject to known and unknown variables, uncertainties, contingencies, and risks that may cause actual events or results to differ materially from expectations[94](index=94&type=chunk) - Key factors include sales to key customers, timing of projects, economic conditions, competitor actions, raw material price fluctuations, dependence on customized equipment, and ability to protect proprietary technology[94](index=94&type=chunk) - Other risks include market conditions, supply chain issues, labor costs, interest rates, cybersecurity, data privacy laws, and changes in accounting policies or government regulations[94](index=94&type=chunk) [Overview of Optical Cable Corporation](index=21&type=section&id=Overview%20of%20Optical%20Cable%20Corporation) This section provides a general overview of Optical Cable Corporation, detailing its business as a manufacturer of fiber optic and copper data communication solutions, its target markets, product offerings, and operational locations - Optical Cable Corporation (OCC®) is a leading manufacturer of fiber optic and copper data communication cabling and connectivity solutions[99](index=99&type=chunk) - The company primarily serves the enterprise market and various harsh environment and specialty markets (e.g., military, industrial, mining, petrochemical, renewable energy, broadcast), as well as the wireless carrier market[99](index=99&type=chunk) - Product offerings include fiber optic and copper cabling, hybrid cabling, connectors, patch cords, cable assemblies, racks, cabinets, and other management accessories[99](index=99&type=chunk) - OCC's headquarters and manufacturing facilities are located in Roanoke, Virginia; near Asheville, North Carolina; and near Dallas, Texas, with each facility specializing in different product categories[101](index=101&type=chunk) [Summary of Company Performance for Third Quarter of Fiscal Year 2025](index=22&type=section&id=Summary%20of%20Company%20Performance%20for%20Third%20Quarter%20of%20Fiscal%20Year%202025) This section highlights the company's strategic collaboration with Lightera, LLC, and key financial performance metrics for the third quarter of fiscal year 2025, showing significant improvements in sales and profitability - OCC and Lightera, LLC entered into a strategic collaboration agreement on July 7, 2025, to expand product offerings and solutions, particularly for data center and enterprise sectors[106](index=106&type=chunk) - In connection with the collaboration, OCC issued **642,199** redeemable restricted shares of common stock to Lightera for **$2.0 million**, giving Lightera a **7.24%** stake[107](index=107&type=chunk) | Metric | Q3 FY2025 ($ millions) | Q3 FY2024 ($ millions) | Change (YoY) ($ millions) | Change (YoY %) | | :-------------------------------- | :---------- | :---------- | :----------- | :------------- | | Consolidated net sales | 19.9 | 16.2 | 3.7 | 22.8% | | Gross profit | 6.3 | 3.9 | 2.4 | 61.2% | | Gross profit margin | 31.7% | 24.2% | 7.5 pp | N/A | | SG&A expenses | 5.7 | 5.2 | 0.5 | 9.5% | | SG&A as % of net sales | 28.8% | 32.3% | -3.5 pp | N/A | | Net income (loss) | 0.302 | (1.6) | 1.9 | 119.4% | | Net income (loss) per share | 0.04 | (0.20) | 0.24 | 120.0% | [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance for the three and nine months ended July 31, 2025, compared to the prior year periods, explaining the drivers behind changes in sales, profits, and expenses [Three Months Ended July 31, 2025 and 2024](index=23&type=section&id=Three%20Months%20Ended%20July%2031,%202025%20and%202024) For the third quarter of fiscal year 2025, the company reported substantial growth in net sales and gross profit, leading to a return to operating income and net income, driven by market improvements and operating leverage | Metric | Q3 FY2025 ($ millions) | Q3 FY2024 ($ millions) | Change (YoY) ($ millions) | Change (YoY %) | | :-------------------------------- | :---------- | :---------- | :----------- | :------------- | | Net Sales | 19.9 | 16.2 | 3.7 | 22.8% | | Gross Profit | 6.3 | 3.9 | 2.4 | 61.2% | | Gross Profit Margin | 31.7% | 24.2% | 7.5 pp | N/A | | SG&A Expenses | 5.7 | 5.2 | 0.5 | 9.5% | | Income (loss) from operations | 0.562 | (1.3) | 1.9 | 142.0% | | Net Income (loss) | 0.302 | (1.6) | 1.9 | 119.4% | - Net sales increased in both enterprise and specialty markets, with general market improvements and strength in military and severe duty markets[116](index=116&type=chunk) - SG&A expenses increased primarily due to higher employee and contracted sales personnel-related costs (**$304,000**) and shipping costs (**$130,000**), both linked to increased net sales[124](index=124&type=chunk) - The improvement in income from operations was primarily due to the **$2.4 million** increase in gross profit, partially offset by the **$499,000** increase in SG&A expenses[127](index=127&type=chunk) [Nine Months Ended July 31, 2025 and 2024](index=26&type=section&id=Nine%20Months%20Ended%20July%2031,%202025%20and%202024) For the first nine months of fiscal year 2025, the company significantly reduced its operating loss and net loss compared to the prior year, driven by strong net sales growth and improved gross profit margins | Metric | 9 Months FY2025 ($ millions) | 9 Months FY2024 ($ millions) | Change (YoY) ($ millions) | Change (YoY %) | | :-------------------------------- | :-------------- | :-------------- | :----------- | :------------- | | Net Sales | 53.2 | 47.2 | 6.0 | 12.8% | | Gross Profit | 16.3 | 11.7 | 4.6 | 39.5% | | Gross Profit Margin | 30.6% | 24.7% | 5.9 pp | N/A | | SG&A Expenses | 16.9 | 15.7 | 1.2 | 8.2% | | Loss from operations | (0.719) | (4.0) | 3.3 | 82.2% | | Net Loss | (1.5) | (4.6) | 3.1 | 67.2% | - Net sales were positively impacted by general market improvements in the industry overall, as well as specifically in military and severe duty markets[138](index=138&type=chunk) - SG&A expenses increased due to higher employee and contracted sales personnel-related costs (**$643,000**) and shipping costs (**$298,000**), driven by new hires, rate increases, and increased net sales[142](index=142&type=chunk) - The reduction in loss from operations was primarily due to the **$4.6 million** increase in gross profit, partially offset by the **$1.3 million** increase in SG&A expenses[145](index=145&type=chunk) [Financial Condition](index=28&type=section&id=Financial%20Condition) The company's financial condition at July 31, 2025, showed minor changes in total assets and liabilities, but a notable decrease in shareholders' equity primarily due to net loss and the accounting for redeemable common stock | Metric | July 31, 2025 ($ millions) | October 31, 2024 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------- | :------------ | :--------------- | :----- | :--------- | | Total assets | 40.2 | 40.4 | -0.2 | -0.47% | | Total liabilities | 18.7 | 19.5 | -0.8 | -4.00% | | Total shareholders' equity | 18.2 | 20.8 | -2.6 | -12.53% | - The decrease in total liabilities was mainly due to a **$1.9 million** decrease in the Revolver note payable, partially offset by a **$915,000** increase in accounts payable and accrued expenses[156](index=156&type=chunk) - The issuance of **642,199** shares of redeemable restricted common stock for **$2.0 million**, with its aggregate redemption value increasing to **$3.2 million**, significantly impacted the equity structure[157](index=157&type=chunk) - The decrease in total shareholders' equity was primarily driven by a **$1.5 million** net loss, **$92,000** in issuance costs for redeemable stock, and a **$1.2 million** increase in the redeemable stock's aggregate redemption value[158](index=158&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources and uses of capital, including cash on hand, operating cash flows, credit facilities, and capital expenditure plans, concluding that current resources are adequate for the next twelve months | Metric | July 31, 2025 ($ thousands) | October 31, 2024 ($ thousands) | Change ($ thousands) | | :-------------------------- | :------------ | :--------------- | :----- | | Cash | 421 | 244 | 177 | | Working capital | 13,700 | 15,500 | -1,800 | | Current ratio | 1.8 to 1.0 | 2.0 to 1.0 | -0.2 | - The decrease in working capital and current ratio was mainly due to the reclassification of **$2.5 million** of the real estate term loan to current liabilities and an increase in accounts payable, partially offset by a decrease in the Revolver balance[161](index=161&type=chunk) | Cash Flow Activity | 9 Months Ended July 31, 2025 ($ thousands) | 9 Months Ended July 31, 2024 ($ thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | 617 | 665 | | Net cash used in investing activities | (234) | (43) | | Net cash used in financing activities | (206) | (1,300) | - Outstanding Revolver balance was **$6.5 million** at July 31, 2025, with **$4.4 million** in available credit, and the Virginia Real Estate Loan balance was **$2.6 million**[162](index=162&type=chunk)[169](index=169&type=chunk)[175](index=175&type=chunk) - The company estimates **$1.0 million** in capital expenditures for fiscal year 2025, to be funded by working capital, operations, or Revolver borrowings[176](index=176&type=chunk) - Management believes future cash flow from operations, cash on hand, and the existing Revolver will be adequate to fund operations for at least the next twelve months[178](index=178&type=chunk) [Critical Accounting Policies and Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section reaffirms that the company's financial statements are prepared in accordance with U.S. GAAP and that no significant accounting policies have changed since the last annual report - Financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions, requiring management estimates and assumptions[180](index=180&type=chunk) - No significant accounting policies detailed in the fiscal year 2024 Form 10-K changed during the period from November 1, 2024, through July 31, 2025[181](index=181&type=chunk) [New Accounting Standards](index=32&type=section&id=New%20Accounting%20Standards) This section discusses recently issued FASB Accounting Standards Updates (ASUs) and their potential impact on the company's financial statements, noting that several are currently under evaluation - ASU 2023-07 (Segment Reporting), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03/2025-01 (Expense Disaggregation) are being evaluated for their impact on financial statement disclosures[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - ASU 2025-05 (Measurement of Credit Losses for Accounts Receivable) is not expected to have a material impact on the company's financial position, operating results, liquidity, or disclosures[185](index=185&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that the company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of July 31, 2025, with no material changes to internal control over financial reporting - The company maintains disclosure controls and procedures designed to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[188](index=188&type=chunk) - Management, with CEO and CFO participation, concluded that the company's disclosure controls and procedures were effective as of July 31, 2025[189](index=189&type=chunk) - There were no changes in the company's internal control over financial reporting during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[189](index=189&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive list of all exhibits filed as part of the Form 10-Q, including corporate governance documents, debt agreements, stock incentive plans, and certifications - Exhibits include Articles of Amendment, Amended and Restated Bylaws, forms of Common Stock certificates, and various loan and security agreements[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - Key agreements listed are the Loan and Security Agreement and Revolving Credit Master Promissory Note with North Mill Capital LLC (SLR Business Credit)[193](index=193&type=chunk) - Also included are the Optical Cable Corporation 2017 Stock Incentive Plan and its amendments, employment agreements, and the Stock Purchase Agreement with Lightera, LLC[194](index=194&type=chunk)[195](index=195&type=chunk) - Certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 are filed herewith[195](index=195&type=chunk)[197](index=197&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) [Signatures](index=39&type=section&id=Signatures) This section contains the official signatures of the registrant's authorized officers, confirming the submission of the Form 10-Q report - The report is signed by Neil D. Wilkin, Jr., Chairman of the Board of Directors, President and Chief Executive Officer, and Tracy G. Smith, Senior Vice President and Chief Financial Officer[201](index=201&type=chunk) - The signing date for the report is September 11, 2025[201](index=201&type=chunk)