Company: OCC
Filing Date: 2025-06-05
Form Type: 10-Q
Source: 0001437749-25-019494
Chunk: 45

Company: OPTICAL CABLE CORP
Filing Date: 2025-06-05
Form: 10-Q
Item: Item 1
Chunk 45
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 of our total net sales occurred during the second half of fiscal years 2024 and 2023, respectively.

Gross Profit

Our gross profit increased 32.1%, or $1.3 million, to $5.3 million in the second quarter of fiscal year 2025, compared to gross profit of $4.0 million in the second quarter of fiscal year 2024, and increased 15.3% compared to $4.6 million for the first quarter of fiscal year 2025.

Gross profit margin, or gross profit as a percentage of net sales, increased to 30.4% in the second quarter of fiscal year 2025, compared to 25.1% in the second quarter of fiscal year 2024, and compared to 29.4% for the first quarter of fiscal year 2025, as we benefited from our operating leverage.

Gross profit margin for the second 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 8.0%, during the second quarter of fiscal year 2025, when compared to $5.3 million during the second quarter of fiscal year 2024. SG&A expenses as a percentage of net sales were 32.7% in the second quarter of fiscal year 2025, compared to 33.0% in the second quarter of fiscal year 2024. By comparison, SG&A expenses as a percentage of net sales were 34.7% during the first quarter of fiscal year 2025.

The increase in SG&A expenses during the second 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 $162,000 and shipping costs totaling $151,000. Included in employee and contracted sales personnel-related costs are compensation costs and sales incentives. Compensation costs increased due to new hires, net of terminations. Sales incentives and shipping costs increased primarily due to increases in net sales.

Royalty Income (Expense), Net

We recognized royalty expense, net of royalty income, totaling $7,000 during the second quarter of fiscal years 202