We caution readers that the foregoing list of important factors is not exclusive. Furthermore, we incorporate by reference those factors included in current reports on Form 8K, and/or in our other filings.
Overview of Optical Cable Corporation
OCC's wholly owned subsidiary Centric Solutions LLC ("Centric Solutions") provides cabling and connectivity solutions for the data center market. Centric Solutions' business is located at OCC's facility near Dallas, Texas.
Summary of Company Performance for Third Quarter of Fiscal Year 2022
? Consolidated net sales for the third quarter of fiscal year 2022 increased
11.2% to $17.4 million, compared to $15.6 million for the same period last
? Sales order backlog/forward load exceeded $15.0 million at the end of the
third quarter of fiscal year 2022-remaining approximately three-to-five times
higher than typical levels-as product demand continues to be robust. At the
same time, supply chain and labor constraints continue to impact production
? Gross profit increased 17.6% to $4.8 million in the third quarter of fiscal
year 2022, compared to $4.1 million for the third quarter of fiscal year 2021.
? Gross profit margin (gross profit as a percentage of net sales) was 27.7%
during the third quarter of fiscal year 2022, compared to 26.2% for the third
? SG&A expenses increased to $5.0 million during the third quarter of fiscal
year 2022 compared to $4.5 million during the third quarter of fiscal year
? Net loss was $372,000, or $0.05 per share, during the third quarter of fiscal
year 2022, compared to net income of $5.4 million, or $0.71 per share, for the
comparable period last year. In the third quarter of fiscal year 2021, we
recognized both a $5.0 million gain on the extinguishment of our Paycheck
Protection Program loan ("PPP Loan") and a $965,000 Employee Retention Tax
? During the third quarter of fiscal year 2022, we received the remaining $2.2
Royalty income (expense), net consists of royalty income earned on licenses associated with our patented products, net of royalty and related expenses.
Other income (expense), net consists of interest expense and other miscellaneous income and expense items not directly attributable to our operations.
Three Months Ended July 31, 2022 and 2021
We believe we have taken appropriate actions to mitigate the impact of these supply chain and recruiting challenges. We have necessarily implemented prospective price increases on new sales orders for many of our products in response to increased material and production costs.
Selling, General, and Administrative Expenses
Also contributing to the increase in SG&A expenses during the third quarter of fiscal year 2022 were increases in travel expenses due to the resumption of business travel during the third quarter of fiscal year 2022 post-COVID-19 restrictions, when compared to the same period last year.
We recognized $14,000 of amortization expense, associated with intangible assets, during the third quarter of fiscal year 2022, compared to $12,000 during the third quarter of fiscal year 2021.
Income (Loss) Before Income Taxes
Nine Months Ended July 31, 2022 and 2021
We believe we have taken appropriate actions to mitigate the impact of these supply chain and recruiting challenges. We have necessarily implemented prospective price increases on new sales orders for many of our products in response to increased material and production costs.
Selling, General, and Administrative Expenses
We recognized $37,000 of amortization expense, associated with intangible assets, during the first nine months of fiscal year 2022, compared to $34,000 during the first nine months of fiscal year 2021.
Income (Loss) Before Income Taxes
Our primary capital needs have been to fund working capital requirements, make payments on our Revolver and make principal payments on long-term debt. Our primary source of capital for these purposes has been existing cash, cash provided by operations and borrowings under our Revolver (see "Credit Facilities" below).
As of July 31, 2022, we had $5.9 million of outstanding borrowings on our Revolver and $4.9 million in available credit.
Corporate acquisitions and other strategic investments, if any, are considered outside of our annual capital expenditure budgeting process.
Critical Accounting Policies and Estimates
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