Company: OCC
Filing Date: 2025-09-11
Form Type: 10-Q
Source: 0001437749-25-028857
Chunk: 41

Company: OPTICAL CABLE CORP
Filing Date: 2025-09-11
Form: 10-Q
Item: Item 1
Chunk 41
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We recognized $14,000 of amortization expense, associated with intangible assets, during the third quarter of fiscal years 2025 and 2024.

Income (loss) from operations

We reported income from operations of $562,000 for the third quarter of fiscal year 2025, compared to a loss from operations of $1.3 million for the third quarter of fiscal year 2024. The improvement was primarily due to the increase in gross profit of $2.4 million, partially offset by the increase in SG&A expenses of $499,000.

Other Expense, Net

We recognized other expense, net in the third quarter of fiscal year 2025 of $256,000, compared to $213,000 in the third quarter of fiscal year 2024. Other expense, net for the third quarter of fiscal year 2025 is comprised primarily of interest expense and other miscellaneous items. Other expense, net for the third quarter of fiscal year 2024 is comprised primarily of interest expense and other miscellaneous items, partially offset by gain on insurance proceeds received for damage to property and equipment, totaling $90,000.

Income (loss) Before Income Taxes 

We reported income before income taxes of $306,000 for the third quarter of fiscal year 2025, compared to a loss before income taxes of $1.6 million for the third quarter of fiscal year 2024. The improvement was primarily a result of the decrease in loss from operations of $1.9 million.

Income Tax Expense

Income tax expense totaled $4,000 in the third quarter of fiscal year 2025, compared to $7,000 in the third quarter of fiscal year 2024. Our effective tax rate was 1.5% for the third quarter of fiscal year 2025 and less than negative one percent for the third quarter of fiscal year 2024.

Fluctuations in our effective tax rates are primarily due to permanent differences in U.S. GAAP and tax accounting for various tax deductions and benefits, but can also be significantly different from the statutory tax rate when income or loss before taxes is at a level such that permanent differences in U.S. GAAP and tax accounting treatment have a disproportional impact on the projected effective tax rate.

We previously established a valuation allowance against all of our net deferred tax assets. As a result of establishing a full valuation allowance against our net deferred tax assets, if we generate sufficient taxable income in subsequent periods to realize a portion or all of our net deferred tax