Company: OCC
Filing Date: 2025-09-11
Form Type: 10-Q
Source: 0001437749-25-028857
Chunk: 40

Company: OPTICAL CABLE CORP
Filing Date: 2025-09-11
Form: 10-Q
Item: Item 1
Chunk 40
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Our gross profit increased 61.2%, or $2.4 million, to $6.3 million in the third quarter of fiscal year 2025, compared to gross profit of $3.9 million in the third quarter of fiscal year 2024, and increased 18.5% compared to $5.3 million for the second quarter of fiscal year 2025.

Gross profit margin, or gross profit as a percentage of net sales, increased to 31.7% in the third quarter of fiscal year 2025, compared to 24.2% in the third quarter of fiscal year 2024, and compared to 30.4% for the second quarter of fiscal year 2025, as we benefited from our operating leverage.

Gross profit margin for the third quarter of fiscal 2025, when compared to the same period last year, was positively impacted by higher volumes, as fixed charges were spread over higher sales—the impact of operating leverage. Additionally, our gross profit margin percentages are heavily dependent upon product mix on a quarterly basis and may vary based on changes in product mix.

Selling, General, and Administrative Expenses

SG&A expenses increased to $5.7 million, or 9.5%, during the third quarter of fiscal year 2025, when compared to $5.2 million during the third quarter of fiscal year 2024. SG&A expenses as a percentage of net sales were 28.8% in the third quarter of fiscal year 2025, compared to 32.3% in the third quarter of fiscal year 2024. By comparison, SG&A expenses as a percentage of net sales were 32.7% during the second quarter of fiscal year 2025.

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The increase in SG&A expenses during the third quarter of fiscal year 2025, compared to the same period last year, was primarily the result of increases in employee and contracted sales personnel-related costs totaling $304,000 and shipping costs totaling $130,000. Both employee and contracted sales personnel-related costs, which include sales incentives, and shipping costs increased due to increases in net sales.

Royalty Income (Expense), Net

We recognized royalty expense, net of royalty income, totaling $7,000 during the third quarter of fiscal years 2025 and 2024. Royalty expense and/or income may fluctuate based on sales of related licensed products and estimates of amounts for non-licensed product sales, if any.

Amortization of Intangible Assets