UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q



     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(D) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

                  For the quarterly period ended July 31, 1997

                                       OR

     [ ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

         For the transition period from _____________ to ______________

                         Commission file number 0-27022

                            OPTICAL CABLE CORPORATION
             (Exact name of registrant as specified in its charter)

                  VIRGINIA                                 54-1237042
  (State or other jurisdiction of incorporation         (I.R.S. Employer
             or organization)                           Identification No.)

                              5290 CONCOURSE DRIVE
                             ROANOKE, VIRGINIA 24019
          (Address of principal executive offices, including zip code)

                                 (540) 265-0690
              (Registrant's telephone number, including area code)

                                       N/A
   (Former name, former address and former fiscal year, if changed since last
                                    report)


       Indicate by check mark whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

(1) Yes    X   No                            (2) Yes     X   No
         -----    ------                               -----    ------

       As of August  26,  1997,  38,675,416  shares of the  registrant's  Common
Stock, no par value, were outstanding.  Of these outstanding shares,  36,000,000
shares were held by Robert Kopstein,  Chairman of the Board, President and Chief
Executive Officer of the registrant.


<PAGE>
                           OPTICAL CABLE CORPORATION
                                FORM 10-Q INDEX
                        NINE MONTHS ENDED JULY 31, 1997


                                                                            PAGE

PART I.  FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                  Condensed Balance Sheets - July 31, 1997 and
                    October 31, 1996..........................................2

                  Condensed Statements of Income - Three Months
                    and Nine Months Ended July 31, 1997 and 1996..............3

                  Condensed Statement of Changes in Stockholders'
                    Equity - Nine Months Ended July 31, 1997..................4

                  Condensed Statements of Cash Flows - Nine Months
                    Ended July 31, 1997 and 1996..............................5

                  Condensed Notes to Condensed Financial Statements........6-10

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL CONDITION....................11-14

PART II. OTHER INFORMATION

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...........................15






<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            OPTICAL CABLE CORPORATION
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                             JULY 31,      OCTOBER 31,
                         Assets                                               1997            1996
                                                                              -----           ----

Current assets:
<S>                                                                         <C>           <C>        
     Cash and cash equivalents                                              $   335,554   $ 1,677,739
     Trade accounts receivable, net of allowance for doubtful accounts of
        $319,500 at July 31, 1997 and $300,000 at October 31, 1996           10,330,648     9,368,476
     Other receivables                                                          415,136       354,041
     Due from employees                                                           4,675         1,475
     Inventories                                                             12,131,240    10,261,437
     Prepaid expenses                                                           129,556        64,863
     Deferred income taxes                                                      168,349       155,304
                                                                            -----------   -----------
           Total current assets                                              23,515,158    21,883,335

Other assets, net                                                                55,243        67,996
Property and equipment, net                                                  11,464,498     9,175,871
                                                                            -----------   -----------

           Total assets                                                     $35,034,899   $31,127,202
                                                                            ===========   ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Notes payable                                                          $   921,000   $ 1,103,000
     Accounts payable and accrued expenses                                    4,062,903     5,488,765
     Accrued compensation and payroll taxes                                     604,464       676,725
     Income taxes payable                                                       421,646       237,926
                                                                            -----------   -----------
           Total current liabilities                                          6,010,013     7,506,416

Deferred income taxes                                                            43,760        49,227
                                                                            -----------   -----------

           Total liabilities                                                  6,053,773     7,555,643
                                                                            -----------   -----------

Stockholders' equity:
     Preferred stock, no par value, authorized 1,000,000 shares; none
        issued and outstanding                                                       --            --
     Common stock; no par value, authorized 50,000,000 shares;
        issued and outstanding 38,675,416 shares                             18,594,116    18,594,116
     Retained earnings                                                       10,387,010     4,977,443
                                                                            -----------   -----------
           Total stockholders' equity                                        28,981,126    23,571,559

Commitments and contingencies
                                                                            -----------   -----------

           Total liabilities and stockholders' equity                       $35,034,899   $31,127,202
                                                                            ===========   ===========
</TABLE>

     See accompanying condensed notes to condensed financial statements.

                                       2
<PAGE>

                            OPTICAL CABLE CORPORATION
                         CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                THREE MONTHS ENDED             NINE MONTHS  ENDED
                                                                     JULY 31,                       JULY 31,
                                                          -----------------------------   ------------------------------
                                                              1997            1996            1997            1996
                                                              ----            ----            ----            ----
<S>                                                     <C>             <C>             <C>             <C>            
Net sales                                               $   14,285,834  $   10,862,064  $   37,422,716  $    31,388,496
Cost of goods sold                                           8,669,025       5,909,041      22,161,654       17,631,613
                                                          -------------   -------------   -------------   --------------
           Gross profit                                      5,616,809       4,953,023      15,261,062       13,756,883

Selling, general and administrative expenses                 2,516,972       2,005,442       6,914,034        5,917,361
                                                          -------------   -------------   -------------   --------------
           Income from operations                            3,099,837       2,947,581       8,347,028        7,839,522

Other income (expense):
      Interest income                                            4,313          37,626          13,382           67,076
      Interest expense                                          (1,078)         (1,622)        (12,176)          (5,115)
      Other, net                                                  (227)           (353)         (5,713)         108,971
                                                          -------------   -------------   -------------   --------------

           Other income (expense), net                           3,008          35,651         (4,507)          170,932
                                                          -------------   -------------   -------------   --------------
           Income before income tax expense                  3,102,845       2,983,232       8,342,521        8,010,454

Income tax expense                                           1,086,162       1,124,409       2,932,954        1,308,349
                                                          -------------   -------------   -------------   --------------

           Net income                                   $    2,016,683  $    1,858,823  $    5,409,567  $     6,702,105
                                                          =============   =============   =============   ==============

Pro forma income data:
      Net income before pro forma income tax
           provision, as reported                                                                       $     6,702,105
      Pro forma income tax provision                                                                          1,746,513
                                                                                                          --------------

           Pro forma net income                                                                         $     4,955,592
                                                                                                          ==============


Net income per share (pro forma for 1996)               $        0.052           0.046  $        0.140            0.127
                                                          =============   =============   =============   ==============

Weighted average shares outstanding
      (pro forma for 1996)                                  38,675,416      40,475,416      38,675,416       38,989,074
                                                          =============   =============   =============   ==============
</TABLE>


       See accompanying condensed notes to condensed financial statements.

                                       3
<PAGE>

                            OPTICAL CABLE CORPORATION
             CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED JULY 31, 1997
                                                   ---------------------------------------------------------------------
                                                            Common Stock                                    Total
                                                   --------------------------------       Retained       Stockholders'
                                                      Shares            Amount            Earnings           Equity
                                                      ------            ------            --------           ------
<S>                                                 <C>           <C>                <C>               <C>            
Balances at October 31, 1996                         38,675,416    $    18,594,116    $    4,977,443    $    23,571,559

Net income                                                    -                  -         5,409,567          5,409,567
                                                   -------------     --------------     -------------     --------------

Balances at July 31, 1997                            38,675,416    $    18,594,116    $   10,387,010    $    28,981,126
                                                   =============     ==============     =============     ==============
</TABLE>


       See accompanying condensed notes to condensed financial statements.


                                       4


<PAGE>

                            OPTICAL CABLE CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                 NINE MONTHS ENDED
                                                                                                       JULY 31,
                                                                                          ------------------------------
                                                                                              1997            1996
                                                                                              ----            ----
<S>                                                                                     <C>             <C>            
Cash flows from operating activities:
      Net income                                                                          $  5,409,567    $  6,702,105
      Adjustments to reconcile net income to net cash provided by
           operating activities:
                Depreciation and amortization                                                  532,200         361,525
                Bad debt expense                                                                 4,868          41,431
                Deferred income taxes                                                          (18,512)       (135,457)
                (Increase) decrease in:
                    Trade accounts receivable                                                 (967,040)     (1,932,690)
                    Other receivables                                                          (61,095)       (100,370)
                    Due from employees                                                          (3,200)          2,350
                    Inventories                                                             (1,869,803)     (2,319,053)
                    Prepaid expenses                                                           (64,693)           (684)
                    Other assets                                                                     -         201,237
                Increase (decrease) in:
                    Accounts payable and accrued expenses                                     (806,478)       (341,153)
                    Accrued compensation and payroll taxes                                     (72,261)        (94,905)
                    Income taxes payable                                                       183,720         828,806
                                                                                          --------------  --------------
                         Net cash provided by operating activities                           2,267,273       3,213,142

Cash flows from investing activities:
      Purchase of property and equipment                                                    (3,427,458)       (871,994)
                                                                                          --------------  --------------
                         Net cash used in investing activities                              (3,427,458)       (871,994)

Cash flows from financing activities:
      Net change in notes payable                                                             (182,000)        806,000
      Proceeds from issuance of common stock, net of issuance costs                                  -       5,549,214
      Cash distributions to previously sole stockholder                                              -      (6,150,000)
                                                                                          --------------  --------------

                         Net cash provided by (used in) financing activities                  (182,000)        205,214
                                                                                          --------------  --------------
Net increase (decrease) in cash and cash equivalents                                        (1,342,185)      2,546,362

Cash and cash equivalents at beginning of period                                             1,677,739         535,235
                                                                                          --------------  --------------

Cash and cash equivalents at end of period                                                $    335,554    $  3,081,597
                                                                                          ==============  ==============
</TABLE>


      See accompanying condensed notes to condensed financial statements.

                                       5


<PAGE>


                            OPTICAL CABLE CORPORATION
                CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS
                         NINE MONTHS ENDED JULY 31, 1997
                                   (Unaudited)

(1)      GENERAL

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance with generally  accepted  accounting  principles
         for interim  financial  reporting  information and the  instructions to
         Form 10-Q and Article 10 of Regulation  S-X.  Accordingly,  they do not
         include all of the information and notes required by generally accepted
         accounting principles for complete financial statements. In the opinion
         of management, all material adjustments (consisting of normal recurring
         accruals)  considered  necessary  for a  fair  presentation  have  been
         included. Operating results for the nine months ended July 31, 1997 are
         not necessarily  indicative of the results that may be expected for the
         fiscal year ending October 31, 1997. The unaudited  condensed financial
         statements and condensed  notes are presented as permitted by Form 10-Q
         and do not contain certain information included in the Company's annual
         financial statements and notes. For further  information,  refer to the
         financial statements and notes thereto included in the Company's annual
         report on Form 10-K for the fiscal year ended October 31, 1996.

         (a)    Pro Forma Net Income Per Share

                For the three  months and nine moths  ended July 31,  1996,  pro
                forma net income per share was  computed by  dividing  pro forma
                net income by the pro forma  weighted  average  number of common
                shares  outstanding  during  the  period  and by  deeming  to be
                outstanding  the number of shares  (1,800,000) the Company would
                have needed to issue at the initial  public  offering  price per
                share  ($2.50)  to pay a $1  million  cash  distribution  to the
                previously sole  stockholder in December 1995 and a $3.5 million
                cash  distribution to the previously sole stockholder out of the
                proceeds of the initial public offering.

         (b)    Net Income Per Share

                For the three months and nine months  ended July 31,  1997,  net
                income  per share was  computed  by  dividing  net income by the
                weighted average number of common shares  outstanding during the
                period.  The calculation of weighted average shares  outstanding
                does not include the effect of common stock  options since their
                impact on the weighted  average shares  outstanding is less than
                three percent.


(2)      INVENTORIES

         Inventories  at July 31,  1997 and  October  31,  1996  consist  of the
         following:


                                               July 31,             October 31, 
                                                 1997                   1996    
                                                 ----                   ----    
                                                                                
         Finished goods                        $ 3,955,240          $ 2,465,659 
         Work in process                         2,680,583            3,104,339 
         Raw materials                           5,441,145            4,645,843 
         Production supplies                        54,272               45,596 
                                               -----------           ---------- 
                                               $12,131,240          $10,261,437 
                                               ===========           ========== 
         

                                                                    (Continued)
                                       6
<PAGE>


                            OPTICAL CABLE CORPORATION
                CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

(3)      NOTES PAYABLE

         On  February  28,  1997,  the  Company  and its  bank  executed  a loan
         commitment letter,  which renewed its $5 million secured revolving line
         of credit  available for general  corporate  purposes and established a
         $10  million  secured  line of credit to fund  potential  acquisitions,
         mergers or joint  ventures.  The lines of credit bear  interest at 1.50
         percent  above the  monthly  LIBOR  rate and are  equally  and  ratably
         secured  by  the  Company's  accounts   receivable,   contract  rights,
         inventory,  furniture and fixtures, machinery and equipment and general
         intangibles.  The lines of credit  will expire on  February  28,  1998,
         unless renewed or extended.


(4)      INCOME TAXES

         Through  March 31,  1996,  the  Company  was not subject to federal and
         state  income  taxes  since  it  had  elected  to  be  taxed  as  an  S
         Corporation.  In connection  with the closing of the Company's  initial
         public offering,  the Company terminated its status as an S Corporation
         effective March 31, 1996 and became subject to federal and state income
         taxes.  Accordingly,  the statement of income for the nine months ended
         July 31,  1996  includes  income  taxes from April 1,  1996,  and,  for
         informational  purposes,  a pro forma adjustment for income taxes which
         would have been  recorded  if the  Company  had been  subject to income
         taxes for the entire period presented.


(5)      IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

         The Company adopted the provisions of SFAS No. 121, "Accounting for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to Be
         Disposed  Of," on  November  1,  1996.  This  Statement  requires  that
         long-lived assets and certain identifiable  intangibles be reviewed for
         impairment  whenever events or changes in  circumstances  indicate that
         the carrying amount of an asset may not be recoverable.  Recoverability
         of  assets  to be held  and used is  measured  by a  comparison  of the
         carrying  amount of an asset to future  net cash flows  expected  to be
         generated by the asset.  If such assets are  considered to be impaired,
         the  impairment to be recognized is measured by the amount by which the
         carrying  amount of the assets  exceed  the fair  value of the  assets.
         Assets to be  disposed  of are  reported  at the lower of the  carrying
         amount or fair value less costs to sell. Adoption of this Statement did
         not have a material impact on the Company's financial position, results
         of operations, or liquidity.

(6)      STOCK OPTION PLAN

         Prior to November 1, 1996,  the Company  accounted for its stock option
         plan in accordance with the provisions of Accounting  Principles  Board
         ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and
         related  interpretations.   As  such,  compensation  expense  would  be
         recorded on the date of grant only if the current  market  price of the
         underlying  stock exceeded the exercise price. On November 1, 1996, the
         Company   adopted   SFAS   No.   123,   "Accounting   for   Stock-Based
         Compensation,"  which permits entities to recognize as expense over the
         vesting period the fair value of all stock-based  awards on the date of
         grant.

                                                                     (Continued)

                                       7
<PAGE>



                            OPTICAL CABLE CORPORATION
                CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

(6)      (CONTINUED)

         Alternatively,  SFAS No. 123 also allows  entities to continue to apply
         the  provisions  of APB Opinion No. 25 and provide pro forma net income
         and pro forma earnings per share  disclosures for employee stock option
         grants made in 1995 and future years as if the fair-value-based  method
         defined in SFAS No. 123 had been  applied.  The  Company has elected to
         continue to apply the provisions of APB Opinion No. 25 and will provide
         the pro  forma  disclosure  provisions  of SFAS No.  123 in its  annual
         report for the fiscal year ending October 31, 1997.

         Stock option  activity during the nine months ended July 31, 1997 is as
         follows:

                                             Number of        Weighted-Average
                                              Shares           Exercise Price
                                              ------           --------------

        Balance at October 31, 1996           442,000              $  2.50
        Granted                               254,000                11.125
        Forfeited                             (10,000)                2.50
                                             ---------
        Balance at July 31, 1997              686,000              $  5.69
                                             =========

         At July 31, 1997, there were 3,314,000  additional shares available for
         grant under the Plan.

         The options  vest 25 percent  after two years,  50 percent  after three
         years, 75 percent after four years and 100 percent after five years.


(7)      FUTURE ACCOUNTING CONSIDERATIONS

         SFAS No. 128
         ------------

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting  Standards  No. 128,  "Earnings  per
         Share." SFAS No. 128 establishes standards for computing and presenting
         earnings  per share (EPS) and applies to entities  with  publicly  held
         common stock or potential  common stock.  SFAS No. 128  simplifies  the
         standards  for  computing  earnings per share  previously  found in APB
         Opinion No. 15,  "Earnings  per Share,"  and makes them  comparable  to
         international  EPS standards.  It replaces the  presentation of primary
         EPS  with  a   presentation   of  basic  EPS.  It  also  requires  dual
         presentation  of  basic  and  diluted  EPS on the  face  of the  income
         statement for all entities with complex capital structures and requires
         a  reconciliation  of the  numerator and  denominator  of the basic EPS
         computation  to  the  numerator  and  denominator  of the  diluted  EPS
         computation.

         Basic  EPS  excludes  dilution  and  is  computed  by  dividing  income
         available  to common  stockholders  by the  weighted-average  number of
         common  shares  outstanding  for the period.  Diluted EPS  reflects the
         potential dilution that could occur if securities or other contracts to
         issue  common stock were  exercised  or converted  into common stock or
         resulted  in the  issuance  of common  stock  that  then  shared in the
         earnings of the entity.

                                                                     (Continued)

                                       8
<PAGE>

                            OPTICAL CABLE CORPORATION
                CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

(7)      (CONTINUED)

         SFAS No. 128 is effective for financial  statements  issued for periods
         ending after  December 15, 1997,  including  interim  periods;  earlier
         application is not permitted.  SFAS No. 128 requires restatement of all
         prior-period  EPS data presented.  It is not anticipated  that SFAS No.
         128 will have any  material  effect on current or prior period EPS data
         presented by the Company.

         SFAS No. 130
         ------------

         In June 1997, the Financial Accounting Standards Board issued Statement
         of Financial  Accounting  Standards No. 130,  "Reporting  Comprehensive
         Income." SFAS No. 130  establishes  standards for reporting and display
         of  comprehensive  income and its  components  in a full set of general
         purpose  financial  statements.  SFAS No.  130 was  issued  to  address
         concerns  over the  practice of  reporting  elements  of  comprehensive
         income directly in equity.

         This  Statement  requires all items that are required to be  recognized
         under  accounting  standards as components of  comprehensive  income be
         reported in a financial statement that is displayed in equal prominence
         with the other  financial  statements.  It does not  require a specific
         format for that  financial  statement  but requires  that an enterprise
         display  an amount  representing  total  comprehensive  income  for the
         period in that financial statement.

         SFAS No. 130 is  applicable  to all entities that provide a full set of
         financial   statements.   Enterprises  that  have  no  items  of  other
         comprehensive  income in any period  presented  are  excluded  from the
         scope of this Statement.

         SFAS No. 130 is effective for both interim and annual periods beginning
         after December 15, 1997.  Comparative financial statements provided for
         earlier  periods  are  required  to  be  reclassified  to  reflect  the
         provisions of this Statement.  It is not anticipated  that SFAS No. 130
         will have any  material  effect on  current or prior  period  financial
         statement displays presented by the Company.

         SFAS No. 131
         ------------

         In June 1997, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 131,  "Disclosures about Segments
         of an Enterprise  and Related  Information."  SFAS No. 131  establishes
         standards  for  the  way  public  business  enterprises  are to  report
         information about operating segments in annual financial statements and
         requires  those  enterprises  to  report  selected   information  about
         operating segments in interim financial reports issued to shareholders.
         It also establishes  standards for related  disclosures  about products
         and services, geographic areas and major customers.


                                                                     (Continued)

                                       9
<PAGE>


                            OPTICAL CABLE CORPORATION
                CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

(7)      (CONTINUED)

         SFAS  No.  131  is  effective  for  financial  statements  for  periods
         beginning  after December 15, 1997. In the initial year of application,
         comparative information for earlier years is to be restated,  unless it
         is  impracticable to do so. SFAS No. 131 need not be applied to interim
         financial  statements  in the  initial  year  of its  application,  but
         comparative  information  for interim  periods in the  initial  year of
         application  shall be  reported  in  financial  statements  for interim
         periods in the second year of application.  It is not anticipated  that
         SFAS No. 131 will have any  material  effect on current or prior period
         segment disclosures presented by the Company.



                                       10
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                  OF OPERATIONS

RESULTS OF OPERATIONS

THREE MONTHS ENDED JULY 31, 1997 AND 1996

Net Sales

Net sales  consists  of gross sales of  products,  less  discounts,  refunds and
returns. Net sales increased 31.5 percent to $14.3 million in third quarter 1997
from $10.9 million for the same period in 1996.  This increase was  attributable
to the Company's  continued  effort to reach a broader  customer base throughout
the United States and  internationally  with increased  advertising,  trade show
attendance, and direct sales presence in more states.

Gross Profit Margin

Cost of goods sold  consists of the cost of  materials,  compensation  costs and
overhead related to the Company's manufacturing operations.  The Company's gross
profit  margin  (gross  profit as a percentage  of net sales)  decreased to 39.3
percent in third quarter 1997 from 45.6 percent in third  quarter  1996.  During
third quarter 1997,  sales from orders $50,000 or more  approximated  21 percent
compared to 17 percent for third  quarter  1996.  Discounts on larger orders are
generally  greater  than for sales from orders less than  $50,000.  In addition,
during third quarter 1997,  net sales to  distributors  approximated  51 percent
versus  49  percent  for  the  same  period  in  1996.  Discounts  on  sales  to
distributors  are  generally  greater  than  for  sales to the  Company's  other
customer bases.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses consist of the compensation costs
(including  sales  commissions)  for  sales  and  marketing  personnel,   travel
expenses,  customer  support  expenses,  trade show expenses,  advertising,  the
compensation cost for administration,  finance and general management personnel,
as well as legal  and  accounting  fees.  Selling,  general  and  administrative
expenses as a percentage  of net sales were 18.6  percent in third  quarter 1997
compared  to 18.5  percent  in third  quarter  1996.  The lower  percentage  was
primarily the result of the fact that net sales for third quarter 1997 increased
at a faster rate than selling,  general and administrative  expenses compared to
third quarter 1996.

Income Before Income Tax Expense

Income before  income tax expense  increased 4.0 percent to $3.1 million for the
three months  ended July 31, 1997  compared to $3.0 million for the three months
ended July 31, 1996.  This was primarily due to increased sales volume offset by
the decrease in gross profit margin.

Income Taxes

The statement of income for the three months ended July 31, 1997 includes income
taxes,  at an effective  rate of 35.0 percent,  and, the statement of income for
the three months ended July 31, 1996 includes  income taxes, at an effective tax
rate of 37.7 percent.  The lower effective tax rate in third quarter 1997 is due
primarily to the benefit of the Company's foreign sales corporation.

Net Income

Net income for third quarter 1997 was $2.0 million  compared to $1.9 million for
third  quarter 1996.  Net income  increased due to the increase in income before
income tax expense and to the decrease in the effective tax rate.


                                                                     (Continued)

                                       11
<PAGE>




NINE MONTHS ENDED JULY 31, 1997 AND 1996

Net Sales

Net sales  consists  of gross sales of  products,  less  discounts,  refunds and
returns.  Net sales  increased 19.2 percent to $37.4 million for the nine months
ended  July 31,  1997 from  $31.4  million  for the same  period  in 1996.  This
increase was  attributable to the Company's  continued effort to reach a broader
customer base  throughout the United States and  internationally  with increased
advertising,  trade show  attendance,  and direct sales presence in more states.
This effort resulted in greater sales in all market segments and product types.

Gross Profit Margin

Cost of goods sold  consists of the cost of  materials,  compensation  costs and
overhead related to the Company's manufacturing operations.  The Company's gross
profit  margin  (gross  profit as a percentage  of net sales)  decreased to 40.8
percent for the nine months  ended July 31, 1997 from 43.8  percent for the nine
months ended July 31, 1996.  This decrease was due to the Company's  product mix
sold and the  ratio of net  sales  attributable  to the  Company's  distributors
during the period. During the nine months ended July 31, 1997, sales from orders
$50,000 or more  approximated  21 percent  compared  to 18 percent  for the nine
months ended July 31, 1996. Discounts on large orders are generally greater than
for sales from orders less than $50,000. In addition,  for the nine months ended
July 31,  1997,  net sales to  distributors  approximated  57 percent  versus 47
percent  for the same period in 1996.  Discounts  on sales to  distributors  are
generally greater than for sales to the Company's other customer base.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses consist of the compensation costs
(including  sales  commissions)  for  sales  and  marketing  personnel,   travel
expenses,  customer  support  expenses,  trade show expenses,  advertising,  the
compensation cost for administration,  finance and general management personnel,
as well as legal  and  accounting  fees.  Selling,  general  and  administrative
expenses  as a  percentage  of net sales were 18.5  percent  for the nine months
ended July 31, 1997  compared to 18.9 percent for the nine months ended July 31,
1996. This lower  percentage was primarily the result of the fact that net sales
for the nine months ended July 31, 1997 increased at a faster rate than selling,
general and  administrative  expenses compared to the nine months ended July 31,
1996. The ratio of selling,  general and administrative expenses as a percentage
of net  sales was also  impacted  due to  incurring  approximately  $288,000  of
shareholder related expenses during the nine months ended July 31, 1997, such as
printing and distribution costs for the annual report on Form 10-K and the proxy
statement,  and  costs for the  annual  meeting  of  shareholders,  compared  to
approximately $65,000 expensed for the nine months ended July 31, 1996.

Income Before Income Tax Expense

Income before  income tax expense  increased 4.1 percent to $8.3 million for the
nine  months  ended July 31, 1997  compared to $8.0  million for the nine months
ended July 31, 1996.  This was primarily due to increased sales volume offset by
the decrease in gross profit margin.

                                                                     (Continued)

                                       12
<PAGE>



Income Taxes

Through March 31, 1996,  the Company was not subject to federal and state income
taxes since it had elected to be taxed as an S Corporation.  In connection  with
the Company's initial public offering, the Company terminated its status as an S
Corporation  effective  March 31,  1996 and became  subject to federal and state
income  taxes.  Accordingly,  the  statement of income for the nine months ended
July 31, 1997 includes  income taxes,  at an effective tax rate of 35.2 percent,
and the  statement  of income for the nine months  ended July 31, 1996  includes
income taxes from April 1, 1996, and, for  informational  purposes,  a pro forma
adjustment  for income taxes,  at an effective  tax rate of 38.1 percent,  which
would have been recorded if the Company had been subject to income taxes for the
entire period presented.  The lower effective tax rate for the nine months ended
July 31, 1997 is due  primarily to the benefit of the  Company's  foreign  sales
corporation.

Net Income

Net income for the nine months ended July 31, 1997 was $5.4 million  compared to
$6.7  million for the nine months  ended July 31,  1996.  Despite an increase in
income before income tax expense, net income decreased due to income tax expense
of $2.9 million for the nine months ended July 31, 1997 compared to $1.3 million
for the same period in 1996 as a result of the  Company's  termination  of its S
Corporation status effective March 31, 1996.

Net income for the nine months ended July 31, 1997  increased  $454,000,  or 9.2
percent over pro forma net income for the nine months ended July 31, 1996.  This
increase  resulted  from the  increase  in income  before  income tax expense of
$332,000, and by the $122,000 decrease in income tax expense for the nine months
ended July 31, 1997 from pro forma income tax  provision  for the same period in
1996.


FINANCIAL CONDITION

Total assets at July 31, 1997 were $35.0  million,  an increase of $3.9 million,
or 12.6 percent over October 31, 1996.  This  increase was  primarily  due to an
increase of $962,000 in trade accounts  receivable  resulting from the increased
sales volume during the quarter as compared to fourth  quarter 1996, an increase
of $1.9  million in  inventories,  and a $2.3  million  increase in property and
equipment,  net, due to the Company's expansion of its headquarters  facilities.
The expansion was funded primarily through the $1.3 million decrease in cash and
cash equivalents.

Total  stockholders'  equity at July 31, 1997  increased  $5.4 million,  or 22.9
percent  from  October  31,  1996 with net income  retained  accounting  for the
increase.

                                                                     (Continued)

                                       13
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

The  Company's  primary  capital  needs  have been to (i) fund  working  capital
requirements, (ii) repay indebtedness, (iii) purchase property and equipment for
expansion  and  (iv)  fund  distributions  to its  previously  sole  stockholder
primarily to satisfy his tax  liabilities  resulting from S Corporation  status.
The Company's primary sources of financing have been cash from operations,  bank
borrowings and proceeds from the initial public offering of the Company's common
stock.  The Company  believes that its cash flow from  operations  and available
lines of credit will be adequate  to fund its  operations  for at least the next
twelve months.

On  February  28,  1997,  the Company  and its bank  executed a loan  commitment
letter,  which renewed its $5 million secured revolving line of credit available
for general  corporate  purposes and  established a $10 million  secured line of
credit to fund potential  acquisitions,  mergers or joint ventures. The lines of
credit are equally and ratably  secured by the  Company's  accounts  receivable,
contract rights, inventory,  furniture and fixtures, machinery and equipment and
general  intangibles.  The lines of credit  will expire on  February  28,  1998,
unless renewed or extended. As of the date hereof, the Company has no additional
material sources of financing.

Cash flows from operations were  approximately $2.3 million and $3.2 million for
the nine months ended July 31, 1997 and 1996, respectively.  For the nine months
ended July 31,  1997,  cash flows from  operations  were  primarily  provided by
operating  income,  offset  by an  increase  in  trade  accounts  receivable  of
$967,000,  an  increase in  inventory  of $1.9  million,  a decrease in accounts
payable and accrued  expenses of $806,000 and income taxes paid of $2.8 million.
Cash  flows  from  operations  for the nine  months  ended  July 31,  1996  were
primarily provided by operating income,  offset by an increase in trade accounts
receivable of $1.9 million,  an increase in inventory of $2.3 million and income
taxes paid of $615,000.

Net cash used in investing activities was for expenditures related to facilities
and  equipment  and was $3.4 million and $872,000 for the nine months ended July
31, 1997 and 1996,  respectively.  The Company's  expansion of its  headquarters
facilities  is  complete,  and as of July  31,  1997,  there  were  no  material
commitments for additional capital expenditures.

Net cash provided by (used in) financing  activities was $(182,000) and $205,000
for the nine  months  ended July 31, 1997 and 1996,  respectively.  The net cash
used in financing  activities  for the nine months ended July 31, 1997 consisted
of repayment of debt outstanding  under the Company's line of credit of $182,000
compared to an increase of $806,000 for the nine months ended July 31, 1996. The
net cash  provided by  financing  activities  for the nine months ended July 31,
1996 also  included  net  proceeds  from the  issuance  of common  stock of $5.6
million,  offset  by  $6.2  million  in  cash  distributions  to  the  Company's
previously sole  stockholder for payment of his income taxes with respect to the
taxable  income of the  Company  prior to the  termination  of the  Company's  S
Corporation status.


                                       14
<PAGE>



                           PART II. OTHER INFORMATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)     Exhibits required by Item 601 of Regulation S-K for the nine
                    months ended July 31, 1997.

                    (27)  Financial Data Schedule.


            (b)     Reports on Form 8-K filed during the three months ended July
                    31, 1997.

                    None.


                                       15
<PAGE>



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        OPTICAL CABLE CORPORATION
                                              (Registrant)



Date:  August 26, 1997                  /s/Robert Kopstein
                                        ----------------------------------------
                                        Robert Kopstein
                                        Chairman of the Board, President and
                                          Chief Executive Officer



Date:  August 26, 1997                  /s/Kenneth W. Harber
                                        ----------------------------------------
                                        Kenneth W. Harber
                                        Vice President of Finance, Treasurer
                                          and Secretary
                                        (principal  financial and  accounting
                                         officer)