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Optical Cable Corporation Q1 consolidated net sales $16.8 million

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Staff Writer | Wednesday March 13, 2019 6:50AM ET
Optical Cable Corporation
Optical Cable Corporation   Gross profit was $3.6 million in the first quarter

Optical Cable Corporation announced financial results for its first quarter ended January 31, 2019.


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Consolidated net sales were $16.8 million in the first quarter of fiscal year 2019, a decrease of 4.6% when compared to net sales of $17.6 million in the first quarter of fiscal year 2018.

Optical Cable Corporation's net sales in enterprise and specialty markets decreased in the first quarter of fiscal year 2019, compared to the same period last year.

The net decrease in the specialty markets reflects $1.2 million in net sales related to a military project during the first quarter of last year that did not recur this year.

OCC's sales order backlog/forward load was $10.0 million at the end of the first quarter—higher than typically would be expected.

Gross profit was $3.6 million in the first quarter of fiscal year 2019, compared to gross profit of $5.2 million in the same period last year.

Gross profit margin, or gross profit as a percentage of net sales, was 21.3% in the first quarter of fiscal year 2019 compared to 29.8% for the same period in fiscal year 2018.

OCC's net sales and gross profit during the first quarter of fiscal year 2019 were impacted by initiatives intended to ultimately increase production throughput and efficiency in order to meet increased product demand over the short- and long-term.

These initiatives, which include the expansion, training, and restructuring of the Company's manufacturing workforce, and certain process changes, created throughput constraints and inefficiencies in the Roanoke facility—particularly increased labor related costs—in the first quarter of fiscal 2019.

SG&A expenses were $6.8 million during the first quarter of fiscal year 2019, an increase of 21.9% compared to $5.6 million for the first quarter of fiscal year 2018.

SG&A expenses as a percentage of net sales were 40.4% in the first quarter of fiscal year 2019, compared to 31.7% during the same period last year.

The increase in SG&A expenses was primarily the result of increases in employee related costs totaling $1.1 million.

The largest increase in employee related costs was a result of share-based compensation expense of $862,000 in the first quarter of fiscal year 2019, an increase of $749,000 in such costs compared to the same period in fiscal year 2018, as a result of previously granted long-term, performance-based equity grants that vested on January 31, 2019.

For the first quarter of fiscal year 2019, OCC recorded a net loss of $3.3 million, or $0.44 per basic and diluted share, compared to a net loss of $410,000, or $0.06 per basic and diluted share, for the first quarter of fiscal year 2018.

 

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