Company: OCC
Filing Date: 2025-09-11
Form Type: 10-Q
Source: 0001437749-25-028857
Chunk: 44

Company: OPTICAL CABLE CORP
Filing Date: 2025-09-11
Form: 10-Q
Item: Item 1
Chunk 44
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Royalty Income (Expense), Net

We recognized royalty expense, net of royalty income, totaling $20,000 during the first nine months of fiscal years 2025 and 2024. Royalty income and/or expense may fluctuate based on sales of related licensed products and estimates of amounts for non-licensed product sales, if any.

Amortization of Intangible Assets

We recognized $41,000 of amortization expense, associated with intangible assets, during the first nine months of fiscal years 2025 and 2024.

Loss from operations

We reported a loss from operations of $719,000 for the first nine months of fiscal year 2025, compared to $4.0 million for the first nine months of fiscal year 2024. The improvement was primarily due to the increase in gross profit of $4.6 million, partially offset by the increase in SG&A expenses of $1.3 million.

Other Expense, Net

We recognized other expense, net in the first nine months of fiscal year 2025 of $753,000, compared to $524,000 in the first nine months of fiscal year 2024. Other expense, net for the first nine months of fiscal year 2025 is comprised of interest expense and other miscellaneous items. Other expense, net for the first nine months of fiscal year 2024 is comprised of interest expense and other miscellaneous items, partially offset by gain on insurance proceeds totaling $309,000.

Loss Before Income Taxes 

We reported a loss before income taxes of $1.5 million for the first nine months of fiscal year 2025, compared to $4.6 million for the first nine months of fiscal year 2024. The improvement was primarily a result of the decrease in loss from operations of $3.3 million, partially offset by the decrease in gain on insurance proceeds, net of $309,000.

Income Tax Expense 

Income tax expense totaled $31,000 in the first nine months of fiscal year 2025, compared to $21,000 in the first nine months of fiscal year 2024. Our effective tax rate was negative 2.1% for the first nine months of fiscal year 2025 and less than negative one percent for the first nine months 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