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Optical Cable Corporation Reports Fourth Quarter and Fiscal Year 2024 Financial Results

Optical Cable Corporation (OCC®), listed on Nasdaq GM as OCC, recently announced its financial outcomes for the fourth quarter and fiscal year 2024, which ended on October 31, 2024. The report reveals a strong recovery signal in the company's financial performance amid market pressures that have posed challenges throughout the previous fiscal year.

Fourth Quarter Highlights

In the fourth quarter alone, OCC achieved a 12.4% increase in net sales, totaling $19.5 million compared to $17.3 million from the same quarter last year. Notably, this quarter's sequential sales surged 20.1% from the third quarter of 2024, marking a continuous climb in net sales since the first quarter of this fiscal year.

The gross profit saw an impressive jump of 68.6%, reaching $6.5 million—up from $3.9 million during the same period a year prior. This increase is credited to production efficiencies and heightened operating leverage due to the boosted sales volume. As a result, the gross profit margin rose to 33.5% compared to 22.4% in the fourth quarter of 2023.

However, selling, general, and administrative (SGA) expenses climbed to $5.9 million compared to $5.1 million in the previous year. Despite this rise, the company managed to report a net income of $373,000, translating to $0.05 per basic and diluted share, contrasting sharply with a net loss of $1.3 million, or $0.17 per share, reported during the fourth quarter of fiscal 2023.

Complete Fiscal Year Analysis

In a broader scope, OCC experienced a decline in consolidated net sales for the entire fiscal year, totaling $66.7 million which reflects a decrease of 7.6% from $72.2 million in fiscal year 2023. The degradation in sales can be largely attributed to ongoing macroeconomic pressures that have broadly impacted the telecommunications sector. This decline began to materialize in fiscal 2023 and continued impacting OCC through the third quarter of 2024.

Gross profit for the year fell by 18.3%, standing at $18.2 million in comparison to $22.3 million for the previous fiscal year. The gross profit margin decreased to 27.3% from last year's 30.9%. The SGA expenses slightly increased by 1.3% for the fiscal year to $21.5 million.

Despite the hurdles, OCC recorded a notable net loss of $4.2 million for fiscal 2024, starkly contrasting the net income of $2.1 million seen in fiscal 2023.

Forward Outlook

In the words of Neil Wilkin, President and CEO of OCC, the company’s strong finish in the fourth quarter reflects their execution of growth strategies despite the adverse market conditions. The reported growth in net sales, gross profit and improvement in operations spotlight a substantial operating leverage effect on profitability as sales and production volumes increase.

Looking ahead to fiscal 2025, Wilkin expressed optimism regarding the company’s prospects, noting early signs that the industry is beginning to experience recovery from extended periods of market weakness. He highlighted that OCC is strategically positioned to seize emerging growth opportunities and provide enhanced value for its stakeholders.

For those interested, OCC will be hosting a conference call to discuss these financial results on December 23, 2024. Participants can join via a conference number provided in their announcements.

About Optical Cable Corporation

Founded in 1983 and headquartered in Roanoke, Virginia, Optical Cable Corporation specializes in manufacturing a diverse range of fiber optic and copper data communication cabling and connectivity solutions. Their comprehensive product offering is aimed at meeting the high data communication industry standards and caters to various markets, including enterprise, residential, and specialty markets. More information regarding OCC's services and achievements can be found on their official website.