Company: OCC
Filing Date: 2025-09-11
Form Type: 10-Q
Source: 0001437749-25-028857
Chunk: 42

Company: OPTICAL CABLE CORP
Filing Date: 2025-09-11
Form: 10-Q
Item: Item 1
Chunk 42
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 assets, our effective income tax rate could be unusually low due to the tax benefit attributable to the necessary decrease in our valuation allowance. Further, if we generate losses before taxes in subsequent periods, our effective income tax rate could also be unusually low as any increase in our net deferred tax asset from such a net operating loss for tax purposes would be offset by a corresponding increase to our valuation allowance against our net deferred tax assets.

21

If we generate sufficient income before taxes in subsequent periods such that U.S. GAAP would permit us to conclude that the removal of any valuation allowance against our net deferred tax asset is appropriate, then during the period in which such determination is made, we will recognize the non-cash benefit of such removal of the valuation allowance in income tax expense on our consolidated statement of operations, which will increase net income and will also increase the net deferred tax asset on our consolidated balance sheet. If we do not generate sufficient income before taxes in subsequent periods such that U.S. GAAP would permit us to conclude that the reduction or removal of any valuation allowance against our net deferred tax asset is appropriate, then no such non-cash benefit would be realized. There can be no assurance regarding any future realization of the benefit by us of all or part of our net deferred tax assets.

As of October 31, 2024, the valuation allowance against our total gross deferred tax assets totaled $4.9 million.

Net Income (loss)

Net income for the third quarter of fiscal year 2025 was $302,000, or $0.04 per share, compared to a net loss of $1.6 million, or $0.20 per share, for the third quarter of fiscal year 2024. This improvement was primarily due to the decrease in loss before income taxes of $1.9 million.

Nine Months Ended July 31, 2025 and 2024

Net Sales

Consolidated net sales for the first nine months of fiscal year 2025 were $53.2 million, an increase of 12.8% compared to net sales of $47.2 million for the same period last year. We experienced an increase in net sales in both our enterprise and specialty markets in the first nine months of fiscal year 2025, compared to the same period last year.

Net sales to customers in the United States increased 9.8% and net sales to customers outside of the United States increased 24.9% in the first nine months of fiscal year 2025, compared to