Optical Cable Corporation Reports Significant Financial Challenges for Nine Months Ended July 31, 2024

Optical Cable Corporation (OCC) reported significant financial challenges for the nine months ended July 31, 2024, compared to the same period in the previous fiscal year. Net sales decreased by 14.0% to $47.2 million from $54.8 million, with domestic sales declining by 14.7% and international sales down by 10.8%. The company attributed these declines to macroeconomic pressures and industry uncertainties that have persisted since Q3 2023.

Gross profit for the nine-month period fell sharply by 36.6% to $11.7 million, resulting in a gross profit margin of 24.7%, down from 33.6% in the prior year. Operating losses were reported at $4.0 million, a stark contrast to the income of $2.3 million recorded in the same period of 2023. Consequently, OCC experienced a net loss of $4.6 million, or $0.59 per share, compared to a net income of $3.3 million, or $0.42 per share, in the previous year.

For the third quarter alone, net sales were $16.2 million, a decrease of 4.2% from $16.9 million in Q3 2023. Gross profit for this quarter was $3.9 million, down 23.4% from the prior year, with a gross profit margin of 24.2%. The company reported a net loss of $1.6 million for Q3 2024, compared to a net income of $101,000 in Q3 2023.

OCC's total assets decreased by 14.3% to $37.6 million, primarily due to a $4.5 million reduction in inventories, which was influenced by lower sales and the timing of raw material purchases. Total liabilities also decreased by 10.0% to $17.2 million, largely due to reductions in accounts payable and accrued expenses.

Cash reserves as of July 31, 2024, stood at $797,000, down from $1.5 million at the end of October 2023. The company reported net cash provided by operating activities of $665,000, a significant improvement from the net cash used in operating activities of $929,000 in the same period of 2023.

In terms of strategic developments, OCC granted 39,960 restricted stock awards to non-employee directors during the third quarter, and on August 7, 2024, it approved additional performance-based restricted stock awards for employees. The company continues to manage its financing through a revolving credit facility, with outstanding borrowings of $7.3 million as of July 31, 2024, down from $8.3 million at the end of October 2023.

Overall, OCC's financial performance reflects a challenging environment, with significant declines in revenue and profitability compared to the previous fiscal period.