0001437749-26-007463
SEC filingOptical Cable Corporation reported Q1 2026 net sales of $16.4 million, a 4.4% increase from $15.7 million in Q1 2025. Despite revenue growth, the company recorded a net loss of $398K, a significant improvement from the $1.1 million net loss in the prior-year quarter. Gross profit increased to $5.4 million with gross margin expanding to 32.7% from 29.4% in Q1 2025. Operating loss narrowed to $208K from $852K in the prior-year period. The company generated positive operating cash flow of $1.2 million, though cash decreased by $112K during the quarter due to $164K in investing activities and $1.1 million in financing activities. Total assets stood at $38.8 million with $29.6 million in current assets, while total liabilities were $17.7 million, resulting in shareholders' equity of $18.1 million.
Optical Cable Corporation reported Q1 2026 financial results with net sales of $16.4 million, representing a 4.4% increase from $15.7 million in Q1 2025. The company narrowed its net loss to $398K, a significant improvement from the $1.1 million net loss in the prior-year quarter. Gross profit increased to $5.4 million from $4.6 million in Q1 2025, with gross margin expanding to 32.7% from 29.4%. Operating loss improved to $208K from $852K in the prior-year period. The company generated positive operating cash flow of $1.2 million, though net cash decreased by $112K during the quarter due to $164K used in investing activities and $1.1 million used in financing activities. Basic and diluted net loss per share was $0.05 compared to $0.14 in Q1 2025.
The company operates as a single reportable segment deriving revenues from sales of fiber optic and copper data communication cabling and connectivity solutions. Net sales increased to $16.4 million in Q1 2026 from $15.7 million in Q1 2025. Geographically, United States sales accounted for $12.3 million (74.9% of total) while sales outside the United States totaled $4.1 million (25.1% of total). The company has significant customer concentration, with one distributor customer accounting for 15.9% of consolidated net sales in Q1 2026, compared to 14.5% in Q1 2025. Revenue recognition occurs when products are shipped or delivered from manufacturing facilities to customers, typically with payment terms of 30 to 90 days after shipment.
Gross margin improved to 32.7% in Q1 2026 from 29.4% in Q1 2025, driven by increased sales and improved cost management. Cost of goods sold was $11.1 million, essentially flat compared to $11.1 million in the prior-year quarter despite higher sales volume. Selling, general and administrative expenses increased slightly to $5.6 million from $5.5 million in Q1 2025. Employee and contracted sales personnel-related expenses represented the largest component of SG&A at $3.8 million, followed by shipping expenses of $467K, travel and entertainment expenses of $172K, and professional fees of $122K. Operating margin improved to -1.3% from -5.4% in the prior-year quarter.
The company generated $1.2 million in operating cash flow during Q1 2026, primarily driven by a $2.2 million decrease in trade accounts receivable and a $1.1 million increase in inventories, partially offset by a net loss of $398K. Investing activities used $164K for purchases of property and equipment and intangible assets. Financing activities used $1.1 million, including $18.9 million in payments on the revolver note payable offset by $17.8 million in proceeds. Total assets were $38.8 million, with current assets of $29.6 million including $20.9 million in inventories and $8.1 million in trade accounts receivable. Total liabilities were $17.7 million, including current liabilities of $16.2 million. The company had $4.6 million outstanding on its revolver with $4.7 million in available credit as of January 31, 2026.
The company noted that operating results for Q1 2026 may not be indicative of full-year results due to factors including changing macroeconomic conditions, supply chain and labor constraints, inflation and interest rates, competitive conditions, timing of projects by key customers, and volatility in large sales orders. The Virginia Real Estate Loan matures on May 5, 2026, and the company intends to refinance the obligation prior to maturity. The Revolver with North Mill Capital LLC matures on July 24, 2027, and management believes the company will continue to be able to borrow on the Revolver to fund operations. The company is evaluating the impact of several new accounting standards, including ASU 2023-09 on income tax disclosures and ASU 2024-03 on expense disaggregation disclosures.