Optical Cable Corporation Reports 6% Increase in Net Sales, $1.1 Million Net Loss in Q1 FY 2025

Optical Cable Corporation (OCC) reported its financial results for the first quarter of fiscal year 2025, revealing a 6.0% increase in consolidated net sales, which reached $15.7 million compared to $14.9 million in the same period last year. The company also experienced a significant improvement in gross profit, which rose by 24.6% to $4.6 million, resulting in a gross profit margin of 29.4%, up from 25.0% in the prior year. Despite these gains, OCC reported a net loss of $1.1 million, or $0.14 per share, an improvement from the net loss of $1.4 million, or $0.18 per share, recorded in the first quarter of fiscal year 2024.

The increase in net sales was attributed to growth in both enterprise and specialty markets, including the wireless carrier sector. Sales to international customers surged by 21.3%, while domestic sales increased by 2.3%. The company's sales order backlog also grew to $6.6 million, up from $5.7 million at the end of the previous fiscal year. However, total assets decreased by 6.3% to $37.8 million, primarily due to a $2.7 million drop in trade accounts receivable, reflecting the seasonal nature of OCC's business.

OCC's selling, general, and administrative (SG&A) expenses rose to $5.5 million, a 7.2% increase from the previous year, largely driven by higher employee and contracted sales personnel costs. The company reported a loss from operations of $852,000, a notable improvement from the $1.4 million loss in the same quarter last year. The increase in SG&A expenses was partially offset by a decrease in other expenses, which included a significant gain on insurance proceeds in the prior year that did not recur.

In terms of liquidity, OCC's cash position decreased to $128,000 as of January 31, 2025, down from $244,000 at the end of the previous fiscal year. The company reported net cash provided by operating activities of $2.7 million, a significant turnaround from the cash used in operations of $261,000 in the first quarter of fiscal year 2024. The decrease in cash was primarily due to net repayments on the company's revolving credit facility, which totaled $2.7 million during the quarter.

Looking ahead, OCC anticipates that its cash flow from operations, combined with existing cash reserves and available credit, will be sufficient to fund operations for at least the next twelve months. The company continues to navigate various market conditions and operational challenges, including supply chain constraints and fluctuating demand across its product lines. Management remains focused on executing its business strategies to enhance performance and capitalize on growth opportunities in both domestic and international markets.