Optical Cable Corporation Reports Second Quarter 2020 Financial Results.

ROANOKE, Va: Optical Cable Corporation (Nasdaq GM: OCC) ("OCC(r)" or the "Company") today announced financial results for its second quarter ended April 30, 2020.

Second Quarter 2020 Financial Results

Consolidated net sales were $14.9 million in the second quarter of fiscal year 2020, a decrease of 21.6% compared to net sales of $19.0 million for the same period last year, with net sales in certain of the Company's markets negatively impacted by the economic effects of the COVID-19 pandemic.

Net sales to one customer in the wireless carrier market accounted for $2.9 million of the decrease in net sales during the second quarter of fiscal 2020, as compared to the second quarter of fiscal 2019. Excluding sales to this customer, consolidated net sales would have decreased 7.7% during the second quarter of fiscal year 2020 compared to the same period last year.

Sequentially, net sales increased 15.3% in the second quarter of fiscal year 2020, compared to net sales of $12.9 million for the first quarter of fiscal year 2020.

Gross profit was $4.0 million in the second quarter of fiscal year 2020 compared to gross profit of $5.3 million in the same period last year, a decrease of 24.7%. Gross profit margin, or gross profit as a percentage of net sales, was 26.9% in the second quarter of fiscal year 2020 compared to 28.0% for the same period in fiscal year 2019. Gross profit increased 66.2% in the second quarter of fiscal year 2020, compared to the first quarter of fiscal year 2020.

Gross profit margins tend to be higher when the Company achieves higher net sales levels, as certain fixed manufacturing costs are spread over higher sales. This operating leverage, which is beneficial at higher sales levels, was the primary factor putting downward pressure on gross profit margin during the second quarter of fiscal year 2020, as fixed costs were spread over lower sales.

SG&A expenses decreased 3.9% to $5.5 million during the second quarter of fiscal year 2020, compared to $5.8 million for the second quarter of fiscal year 2019. SG&A expenses as a percentage of net sales were 37.3% in the second quarter of fiscal year 2020, compared to 30.5% in the second quarter of fiscal year 2019. The decrease in SG&A expenses was primarily the result of decreases in employee related costs and other cost reduction initiatives, but was partially offset by a $447,000 increase in bad debt expense.

For the second quarter of fiscal year 2020, OCC recorded a net loss of...