Stock in Focus: Optical Cable Corporation (NASDAQ-OCC)

On 22 May Wednesday, Optical Cable Corporation (NASDAQ-OCC) has shown upward/downward move of -3.69% and ended the last trade at $4.7000. The trading volume was recorded to 7,031 shares as compared to average traded volume of 19,788 shares.

Optical Cable Corporation (OCC) recently reported financial results for its first quarter ended January 31, 2019.

First Quarter 2019 Financial Results

Consolidated net sales were $16.8M in the first quarter of fiscal year 2019, a decrease of 4.6% when contrast to net sales of $17.6M in the first quarter of fiscal year 2018.  The Company’s net sales in enterprise and specialty markets reduced in the first quarter of fiscal year 2019, contrast to the same period last year.  The net decrease in the specialty markets reflects $1.2M 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 $10.0M at the end of the first quarter—higher than typically would be predictable.

Gross profit was $3.6M in the first quarter of fiscal year 2019, contrast to gross profit of $5.2M 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 contrast 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 influenced by initiatives intended to ultimately raise production throughput and efficiency in order to meet raised 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 raised labor related costs—in the first quarter of fiscal 2019. 

SG&A expenses were $6.8M during the first quarter of fiscal year 2019, an raise of 21.9% contrast to $5.6M 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, contrast to 31.7% during the same period last year.  The raise in SG&A expenses was primarily the result of raises in employee related costs totaling $1.1M.  The largest raise in employee related costs was a result of share-based compensation expense of $862,000in the first quarter of fiscal year 2019, an raise of $749,000 in such costs contrast to the same period in fiscal year 2018, as a result of before granted long-term, performance-based equity grants that vested on January 31, 2019. 

The Company has 7.44 million shares outstanding and 4.79 million shares were floated in market. The short ratio in the company’s stock is documented at 1.61 and the short float is around of 0.67%. The average true range of the stock is observed at 0.18 and the relative strength index of the stock is recorded at 50.91.

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