Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jul. 31, 2020 | Sep. 04, 2020 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001000230 | |
Entity Registrant Name | OPTICAL CABLE CORP | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-27022 | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 54-1237042 | |
Entity Address, Address Line One | 5290 Concourse Drive | |
Entity Address, City or Town | Roanoke | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 24019 | |
City Area Code | 540 | |
Local Phone Number | 265-0690 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | OCC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,537,087 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jul. 31, 2020 | Oct. 31, 2019 |
Current assets: | ||
Cash | $ 998,662 | $ 537,330 |
Trade accounts receivable, net of allowance for doubtful accounts of $531,308 at July 31, 2020 and $99,562 at October 31, 2019 | 6,799,541 | 10,347,597 |
Income taxes refundable - current | 50,618 | 25,004 |
Other receivables | 60,467 | 69,727 |
Inventories | 17,129,461 | 18,095,627 |
Prepaid expenses and other assets | 259,173 | 304,713 |
Total current assets | 25,297,922 | 29,379,998 |
Property and equipment, net | 9,064,679 | 10,010,223 |
Income taxes refundable - noncurrent | 0 | 25,003 |
Intangible assets, net | 664,561 | 659,280 |
Other assets, net | 1,885,924 | 32,430 |
Total assets | 36,913,086 | 40,106,934 |
Current liabilities: | ||
Note payable, SBA PPP loan - current | 2,469,042 | 0 |
Current installments of long-term debt | 308,979 | 738,955 |
Note payable to bank, revolver - current | 0 | 5,650,000 |
Accounts payable and accrued expenses | 3,421,487 | 5,459,352 |
Accrued compensation and payroll taxes | 1,379,677 | 1,763,338 |
Income taxes payable | 11,843 | 15,382 |
Total current liabilities | 7,591,028 | 13,627,027 |
Note payable, SBA PPP loan - noncurrent | 2,512,358 | 0 |
Note payable, revolver - noncurrent | 4,577,521 | 0 |
Long-term debt, excluding current installments | 4,932,239 | 5,169,668 |
Other noncurrent liabilities | 1,674,301 | 71,339 |
Total liabilities | 21,287,447 | 18,868,034 |
Shareholders’ equity: | ||
Preferred stock, no par value, authorized 1,000,000 shares; none issued and outstanding | 0 | 0 |
Common stock, no par value, authorized 50,000,000 shares; issued and outstanding 7,537,087 shares at July 31, 2020 and 7,458,981 shares at October 31, 2019 | 13,961,526 | 13,853,334 |
Retained earnings | 1,664,113 | 7,385,566 |
Total shareholders’ equity | 15,625,639 | 21,238,900 |
Commitments and contingencies | ||
Total liabilities and shareholders’ equity | $ 36,913,086 | $ 40,106,934 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Allowance for doubtful accounts | $ 531,308 | $ 99,562 |
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, issued (in shares) | 7,537,087 | 7,458,981 |
Common stock, outstanding (in shares) | 7,537,087 | 7,458,981 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net sales | $ 13,639,169 | $ 17,367,068 | $ 41,389,993 | $ 53,074,911 |
Cost of goods sold | 10,167,008 | 12,875,614 | 31,516,942 | 39,711,764 |
Gross profit | 3,472,161 | 4,491,454 | 9,873,051 | 13,363,147 |
Selling, general and administrative expenses | 4,559,970 | 5,418,438 | 14,933,595 | 17,968,897 |
Royalty (income) expense, net | 193,062 | 216 | 208,093 | (1,272) |
Amortization of intangible assets | 10,806 | 9,597 | 30,973 | 28,494 |
Loss from operations | (1,291,677) | (936,797) | (5,299,610) | (4,632,972) |
Other expense, net: | ||||
Interest expense | (135,725) | (135,648) | (397,198) | (381,819) |
Other, net | (1,436) | 10 | (3,015) | (7,270) |
Other expense, net | (137,161) | (135,638) | (400,213) | (389,089) |
Loss before income taxes | (1,428,838) | (1,072,435) | (5,699,823) | (5,022,061) |
Income tax expense (benefit) | 4,992 | 12,859 | 15,076 | (9,322) |
Net loss | $ (1,433,830) | $ (1,085,294) | $ (5,714,899) | $ (5,012,739) |
Net loss per share: Basic and diluted (in dollars per share) | $ (0.20) | $ (0.15) | $ (0.78) | $ (0.68) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Retained Earnings [Member] | Total |
Balances (in shares) at Oct. 31, 2018 | 7,694,387 | ||
Balances at Oct. 31, 2018 | $ 13,816,140 | $ 12,994,697 | $ 26,810,837 |
Adoption of accounting standard ASU 2018-07 | $ 0 | 61,763 | 61,763 |
Share-based compensation, net (in shares) | 257,222 | ||
Share-based compensation, net | $ (66,327) | 0 | (66,327) |
Net loss | $ 0 | (3,310,020) | (3,310,020) |
Share-based compensation, net (in shares) | (257,222) | ||
Repurchase and retirement of common stock (at cost) (in shares) | (258) | ||
Repurchase and retirement of common stock (at cost) | $ 0 | (1,257) | (1,257) |
Balances (in shares) at Jan. 31, 2019 | 7,436,907 | ||
Balances at Jan. 31, 2019 | $ 13,749,813 | 9,745,183 | 23,494,996 |
Balances (in shares) at Oct. 31, 2018 | 7,694,387 | ||
Balances at Oct. 31, 2018 | $ 13,816,140 | 12,994,697 | 26,810,837 |
Net loss | (5,012,739) | ||
Balances (in shares) at Jul. 31, 2019 | 7,459,056 | ||
Balances at Jul. 31, 2019 | $ 13,814,038 | 8,042,388 | 21,856,426 |
Balances (in shares) at Jan. 31, 2019 | 7,436,907 | ||
Balances at Jan. 31, 2019 | $ 13,749,813 | 9,745,183 | 23,494,996 |
Share-based compensation, net (in shares) | (23,628) | ||
Share-based compensation, net | $ 27,169 | 0 | 27,169 |
Net loss | $ 0 | (617,425) | (617,425) |
Share-based compensation, net (in shares) | 23,628 | ||
Balances (in shares) at Apr. 30, 2019 | 7,460,535 | ||
Balances at Apr. 30, 2019 | $ 13,776,982 | 9,127,758 | 22,904,740 |
Share-based compensation, net (in shares) | 1,461 | ||
Share-based compensation, net | $ 37,056 | 0 | 37,056 |
Net loss | $ 0 | (1,085,294) | (1,085,294) |
Share-based compensation, net (in shares) | (1,461) | ||
Repurchase and retirement of common stock (at cost) (in shares) | (18) | ||
Repurchase and retirement of common stock (at cost) | $ 0 | (76) | (76) |
Balances (in shares) at Jul. 31, 2019 | 7,459,056 | ||
Balances at Jul. 31, 2019 | $ 13,814,038 | 8,042,388 | 21,856,426 |
Balances (in shares) at Oct. 31, 2019 | 7,458,981 | ||
Balances at Oct. 31, 2019 | $ 13,853,334 | 7,385,566 | 21,238,900 |
Adoption of accounting standard ASU 2018-07 | $ 6,554 | (6,554) | 0 |
Share-based compensation, net (in shares) | (2,909) | ||
Share-based compensation, net | $ 34,356 | 0 | 34,356 |
Net loss | $ 0 | (2,591,888) | (2,591,888) |
Share-based compensation, net (in shares) | 2,909 | ||
Balances (in shares) at Jan. 31, 2020 | 7,456,072 | ||
Balances at Jan. 31, 2020 | $ 13,894,244 | 4,787,124 | 18,681,368 |
Balances (in shares) at Oct. 31, 2019 | 7,458,981 | ||
Balances at Oct. 31, 2019 | $ 13,853,334 | 7,385,566 | 21,238,900 |
Net loss | (5,714,899) | ||
Balances (in shares) at Jul. 31, 2020 | 7,537,087 | ||
Balances at Jul. 31, 2020 | $ 13,961,526 | 1,664,113 | 15,625,639 |
Balances (in shares) at Jan. 31, 2020 | 7,456,072 | ||
Balances at Jan. 31, 2020 | $ 13,894,244 | 4,787,124 | 18,681,368 |
Share-based compensation, net | 26,677 | 0 | 26,677 |
Net loss | $ 0 | (1,689,181) | (1,689,181) |
Balances (in shares) at Apr. 30, 2020 | 7,456,072 | ||
Balances at Apr. 30, 2020 | $ 13,920,921 | 3,097,943 | 17,018,864 |
Share-based compensation, net (in shares) | 81,015 | ||
Share-based compensation, net | $ 40,605 | 0 | 40,605 |
Net loss | $ 0 | (1,433,830) | (1,433,830) |
Share-based compensation, net (in shares) | (81,015) | ||
Balances (in shares) at Jul. 31, 2020 | 7,537,087 | ||
Balances at Jul. 31, 2020 | $ 13,961,526 | $ 1,664,113 | $ 15,625,639 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (5,714,899) | $ (5,012,739) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,082,809 | 1,294,062 |
Bad debt expense | 431,746 | 56,483 |
Share-based compensation expense | 101,638 | 941,253 |
Loss on sale of property and equipment | 10,305 | 2,058 |
(Increase) decrease in: | ||
Trade accounts receivable | 3,116,310 | 2,811,745 |
Other receivables | 9,260 | 26,038 |
Inventories | 966,166 | (1,337,756) |
Prepaid expenses and other assets | 45,540 | 113,565 |
Income taxes refundable | (611) | (726) |
Other assets | (8,180) | 21,473 |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | (2,470,420) | 2,714,909 |
Accrued compensation and payroll taxes | (383,661) | (1,646,435) |
Income taxes payable | (3,539) | (451) |
Other noncurrent liabilities | 381,682 | (30,803) |
Net cash used in operating activities | (2,435,854) | (47,324) |
Cash flows from investing activities: | ||
Purchase of and deposits for the purchase of property and equipment | (94,536) | (483,115) |
Investment in intangible assets | (36,254) | (57,425) |
Net cash used in investing activities | (130,790) | (540,540) |
Cash flows from financing activities: | ||
Payroll taxes withheld and remitted on share-based payments | 0 | (943,355) |
Proceeds from note payable to bank, SBA PPP loan | 4,981,400 | 0 |
Proceeds from note payable to bank, revolver | 350,000 | 2,850,000 |
Proceeds from note payable, revolver | 5,530,583 | 0 |
Payments on note payable to bank, revolver | (6,000,000) | 0 |
Payments on note payable, revolver | (953,062) | 0 |
Principal payments on long-term debt | (667,405) | (395,249) |
Payments for financing costs | (213,540) | 0 |
Repurchase of common stock | 0 | (1,333) |
Net cash provided by financing activities | 3,027,976 | 1,510,063 |
Net increase in cash | 461,332 | 922,199 |
Cash at beginning of period | 537,330 | 177,413 |
Cash at end of period | $ 998,662 | $ 1,099,612 |
Note 1 - General
Note 1 - General | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ( 1 General The accompanying unaudited condensed consolidated financial statements of Optical Cable Corporation and its subsidiaries (collectively, the “Company” or “OCC ® 10 X. not nine July 31, 2020 not October 31, 2020 may 19 10 October 31, 2019 10 not 10 October 31, 2019. In February 2016, 2016 02, Leases 2017 13, 2018 10, 2018 11, 2018 20 2019 01 842” 842 842 842 December 15, 2018, 842 November 1, 2019. no 7 In June 2018, 2018 07, Compensation – Stock Compensation (Topic 718 2018 07” 2018 07 718 2018 07 718 not 1 2 Revenue from Contracts with Customers 606 2018 07 December 15, 2018, 2018 07 November 1, 2019. not In June 2018, 2018 08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made 2018 08” 2018 08 not 2018 08 not 2018 08 December 15, 2018, 2018 08 November 1, 2019. 2018 08 not |
Note 2 - Stock Incentive Plans
Note 2 - Stock Incentive Plans and Other Share-based Compensation | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Share-based Payment Arrangement [Text Block] | ( 2 Stock Incentive Plans and Other Share-Based Compensation As of July 31, 2020, 2017 “2017 Share-based compensation expense for employees, a consultant and non-employee Directors recognized in the condensed consolidated statements of operations for the three nine July 31, 2020 three nine July 31, 2019 Restricted and Other Stock Awards The Company has granted, and anticipates granting from time to time, restricted stock awards subject to approval by the Compensation Committee of the Board of Directors. Since fiscal year 2004, During the three July 31, 2020, 2017 one three nine July 31, 2020 three nine July 31, 2019 During the three July 31, 2020, 2017 five January 31, 2022. Restricted stock award activity during the nine July 31, 2020 As of July 31, 2020, |
Note 3 - Allowance for Doubtful
Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Allowance for Doubtful Accounts for Trade Accounts Receivable Disclosure [Text Block] | ( 3 Allowance for Doubtful Accounts for Trade Accounts Receivable A summary of changes in the allowance for doubtful accounts for trade accounts receivable for the nine July 31, 2020 2019 Nine Months Ended July 31, 2020 2019 Balance at beginning of period $ 99,562 $ 64,242 Bad debt expense 431,746 56,483 Losses charged to allowance — (25,061 ) Balance at end of period $ 531,308 $ 95,664 |
Note 4 - Inventories
Note 4 - Inventories | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | ( 4 Inventories Inventories as of July 31, 2020 October 31, 2019 July 31 October 31, 2020 2019 Finished goods $ 5,111,049 $ 5,845,973 Work in process 3,343,469 3,321,216 Raw materials 8,411,730 8,632,230 Production supplies 263,213 296,208 Total $ 17,129,461 $ 18,095,627 |
Note 5 - Product Warranties
Note 5 - Product Warranties | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Product Warranty Disclosure [Text Block] | ( 5 Product Warranties As of July 31, 2020 October 31, 2019, three nine July 31, 2020 three nine July 31, 2019 The following table summarizes the changes in the Company’s accrual for product warranties during the nine July 31, 2020 2019: Nine Months Ended July 31 2020 2019 Balance at beginning of period $ 120,000 $ 180,000 Liabilities accrued for warranties issued during the period 141,033 222,520 Warranty claims and costs paid during the period (65,736 ) (205,629 ) Changes in liability for pre-existing warranties during the period (85,297 ) 3,109 Balance at end of period $ 110,000 $ 200,000 |
Note 6 - Long-term Debt and Not
Note 6 - Long-term Debt and Notes Payable to Bank | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Long-term Debt [Text Block] | ( 6 Long-term Debt and Notes Payable to Bank The Company has credit facilities consisting of a real estate term loan, as amended and restated (the “Virginia Real Estate Loan”), a supplemental real estate term loan, as amended and restated (the “North Carolina Real Estate Loan”), a Revolving Credit Master Promissory Note and related agreements (collectively, the “Revolver”) and a Paycheck Protection Program loan (“PPP Loan”) implemented by the United States Small Business Administration (“SBA”). Both the Virginia Real Estate Loan and the North Carolina Real Estate Loan are with Pinnacle Bank (“Pinnacle”), have a fixed interest rate of 3.95% and are secured by a first Long-term debt as of July 31, 2020 October 31, 2019 July 31, October 31, 2020 2019 Virginia Real Estate Loan ($ 6.5 31,812 3.95 3,644,211 $ 4,173,324 $ 4,580,173 North Carolina Real Estate Loan ($ 2.24 10,963 3.95 1,255,850 May 1, 2024 1,067,894 1,328,450 Total long-term debt 5,241,218 5,908,623 Less current installments 308,979 738,955 Long-term debt, excluding current installments $ 4,932,239 $ 5,169,668 On April 15, 2020, 1.00% may not seven two April 15, 2022). July 31, 2020, On July 24, 2020, July 24, 2020 ( July 24, 2020 Under the Loan Agreement, North Mill agreed to provide the Company with one $5,000,000, not 100% The maximum aggregate principal amount subject to the Revolver is $18,000,000. Interest accrues on the daily balance at the per annum rate of 1.5% above the Prime Rate in effect from time to time, but not may July 31, 2020, July 31, 2020). three July 24, 2023. may one The Revolver is secured by all of the following assets: properties, rights and interests in property of the Company whether now owned or existing, or hereafter acquired or arising, and wherever located; all accounts, equipment, commercial tort claims, general intangibles, chattel paper, inventory, negotiable collateral, investment property, financial assets, letter-of-credit rights, supporting obligations, deposit accounts, money or assets of the Company, which hereafter come into the possession, custody, or control of North Mill; all proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing; any and all tangible or intangible property resulting from the sale, lease, license or other disposition of any of the foregoing, or any portion thereof or interest therein, and all proceeds thereof; and any other assets of the Company which may Prior to the refinancing of the Revolver with North Mill Capital on July 24, 2020, one $6.5 As of July 31, 2020 October 31, 2019, |
Note 7 - Leases
Note 7 - Leases | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Leases of Lessee Disclosure [Text Block] | ( 7 Leases The Company elected the optional transition method provided by the FASB in ASU 2018 11, Leases (Topic 842 not not not The Company has an operating lease agreement for approximately 34,000 square feet of office, manufacturing and warehouse space in Plano, Texas (near Dallas). The initial lease term expired November 30, 2019, November 30, 2024. The Company entered into an operating lease agreement in April 2015 twelve April 30, 2016. four 4 one April 30, 2020. February 6, 2020 April 25, 2015 thirty-six April 30, 2023. The Company also leases certain office equipment under operating leases with initial 60 month terms. The Company’s lease contracts may The Company includes contract lease components in its determination of lease payments, while non-lease components of the contracts, such as taxes, insurance, and common area maintenance, are expensed as incurred. At commencement, right-of-use assets and lease liabilities are measured at the present value of future lease payments over the lease term. The Company uses its incremental borrowing rate based on information available at the time of lease commencement to measure the present value of future payments. Operating lease expense is recognized on a straight-line basis over the lease term. Short term leases with an initial term of 12 Operating lease right-of-use assets of $1,349,149 were included in other assets at July 31, 2020. July 31, 2020. three nine July 31, 2020 The weighted average remaining lease term was 47.1 months and the weighted average discount rate was 5.1% as of July 31, 2020. The Company’s future payments due under operating leases reconciled to the lease liability are as follows: Fiscal Future Payments 2020 (1) $ 96,681 2021 389,398 2022 389,807 2023 327,071 2024 274,132 Thereafter 26,370 Total undiscounted lease payments 1,503,459 Present value discount (144,661 ) Total operating lease liability $ 1,358,798 ( 1 three 2020. For the three nine July 31, 2020, nine July 31, 2020, |
Note 8 - Fair Value Measurement
Note 8 - Fair Value Measurements | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | ( 8 Fair Value Measurements The carrying amounts reported in the condensed consolidated balance sheets as of July 31, 2020 October 31, 2019 July 31, 2020 October 31, 2019. |
Note 9 - Net Loss Per Share
Note 9 - Net Loss Per Share | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | ( 9 Basic net loss per share excludes dilution and is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net loss of the Company. The following is a reconciliation of the numerators and denominators of the net loss per share computations for the periods presented: Three months ended Nine months ended July 31, July 31, 2020 2019 2020 2019 Net loss (numerator) $ (1,433,830 ) $ (1,085,294 ) $ (5,714,899 ) $ (5,012,739 ) Shares (denominator) 7,352,673 7,319,274 7,354,579 7,409,465 Basic and diluted net loss per share $ (0.20 ) $ (0.15 ) $ (0.78 ) $ (0.68 ) Weighted average unvested shares for the three nine July 31, 2020 not three nine July 31, 2020 ( Weighted average unvested shares for the three nine July 31, 2019 not three nine July 31, 2019 ( |
Note 10 - Segment Information a
Note 10 - Segment Information and Business and Credit Concentrations | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | ( 10 Segment Information and Business and Credit Concentrations The Company provides credit, in the normal course of business, to various commercial enterprises, governmental entities and not July 31, 2020 For the three nine July 31, 2020, one three July 31, 2019, nine July 31, 2019, two The Company has a single reportable segment for purposes of segment reporting. |
Note 11 - Revenue Recognition
Note 11 - Revenue Recognition | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | ( 11 Revenue Recognition Revenues consist of product sales that are recognized at a specific point in time under the core principle of recognizing revenue when control transfers to the customer. The Company considers customer purchase orders, governed by master sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. The Company evaluates each customer’s credit risk when determining whether to accept a contract. In determining transaction prices, the Company evaluates whether fixed order prices are subject to adjustment to determine the net consideration to which the Company expects to be entitled. Contracts do not 30 90 not not not The Company recognizes revenue at the point in time when products are shipped or delivered from its manufacturing facility to its customer, in accordance with the agreed upon shipping terms. Since the Company typically invoices the customer at the same time that performance obligations are satisfied, no July 31, 2020 October 31, 2019. Sales to certain customers are made pursuant to agreements that provide price adjustments and limited return rights with respect to the Company’s products. The Company maintains a reserve for estimated future price adjustment claims, rebates and returns as a refund liability. The Company’s refund liability was $118,675 as of July 31, 2020 October 31, 2019. The Company offers standard product warranty coverage which provides assurance that its products will conform to contractually agreed-upon specifications for a limited period from the date of shipment. Separately-priced warranty coverage is not no The Company accounts for shipping and handling activities related to contracts with customers as a cost to fulfill its promise to transfer control of the related product. Shipping and handling costs are included in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. The Company incurs sales commissions to acquire customer contracts that are directly attributable to the contracts. The commissions are expensed as selling expenses during the period that the related products are transferred to customers. Disaggregation of Revenue The following table presents net sales attributable to the United States and all other countries in total for the three nine July 31, 2020 2019: Three months ended Nine months ended July 31 July 31 2020 2019 2020 2019 United States $ 11,086,545 $ 14,421,221 $ 33,432,451 $ 43,460,603 Outside the United States 2,552,624 2,945,847 7,957,542 9,614,308 Total net sales $ 13,639,169 $ 17,367,068 $ 41,389,993 $ 53,074,911 OPTICAL CABLE CORPORATION Condensed Notes to Condensed Consolidated Financial Statements Nine Months Ended July 31, 2020 (Unaudited) |
Note 12 - Contingencies
Note 12 - Contingencies | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | ( 12 Contingencies From time to time, the Company is involved in various claims, legal actions and regulatory reviews arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not The COVID- 19 19 While continuing to operate, the Company has been negatively impacted by the COVID- 19 The Company made a number of changes to business operations in response to the COVID- 19 The extent to which the COVID- 19 not 19 |
Note 13 - New Accounting Standa
Note 13 - New Accounting Standards Not Yet Adopted | 9 Months Ended |
Jul. 31, 2020 | |
Notes to Financial Statements | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | ( 13 New Accounting Standards Not In December 2019, 2019 12, Income Taxes (Topic 740 2019 12” 2019 12 740 2019 12 December 15, 2020, 2019 12 There are no not |
Note 3 - Allowance for Doubtf_2
Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Summary of Changes in the Allowance for Doubtful Accounts for Trade Accounts Receivable [Table Text Block] | Nine Months Ended July 31, 2020 2019 Balance at beginning of period $ 99,562 $ 64,242 Bad debt expense 431,746 56,483 Losses charged to allowance — (25,061 ) Balance at end of period $ 531,308 $ 95,664 |
Note 4 - Inventories (Tables)
Note 4 - Inventories (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | July 31 October 31, 2020 2019 Finished goods $ 5,111,049 $ 5,845,973 Work in process 3,343,469 3,321,216 Raw materials 8,411,730 8,632,230 Production supplies 263,213 296,208 Total $ 17,129,461 $ 18,095,627 |
Note 5 - Product Warranties (Ta
Note 5 - Product Warranties (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Schedule of Product Warranty Liability [Table Text Block] | Nine Months Ended July 31 2020 2019 Balance at beginning of period $ 120,000 $ 180,000 Liabilities accrued for warranties issued during the period 141,033 222,520 Warranty claims and costs paid during the period (65,736 ) (205,629 ) Changes in liability for pre-existing warranties during the period (85,297 ) 3,109 Balance at end of period $ 110,000 $ 200,000 |
Note 6 - Long-term Debt and N_2
Note 6 - Long-term Debt and Notes Payable to Bank (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | July 31, October 31, 2020 2019 Virginia Real Estate Loan ($ 6.5 31,812 3.95 3,644,211 $ 4,173,324 $ 4,580,173 North Carolina Real Estate Loan ($ 2.24 10,963 3.95 1,255,850 May 1, 2024 1,067,894 1,328,450 Total long-term debt 5,241,218 5,908,623 Less current installments 308,979 738,955 Long-term debt, excluding current installments $ 4,932,239 $ 5,169,668 |
Note 7 - Leases (Tables)
Note 7 - Leases (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Fiscal Future Payments 2020 (1) $ 96,681 2021 389,398 2022 389,807 2023 327,071 2024 274,132 Thereafter 26,370 Total undiscounted lease payments 1,503,459 Present value discount (144,661 ) Total operating lease liability $ 1,358,798 |
Note 9 - Net Loss Per Share (Ta
Note 9 - Net Loss Per Share (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three months ended Nine months ended July 31, July 31, 2020 2019 2020 2019 Net loss (numerator) $ (1,433,830 ) $ (1,085,294 ) $ (5,714,899 ) $ (5,012,739 ) Shares (denominator) 7,352,673 7,319,274 7,354,579 7,409,465 Basic and diluted net loss per share $ (0.20 ) $ (0.15 ) $ (0.78 ) $ (0.68 ) |
Note 11 - Revenue Recognition (
Note 11 - Revenue Recognition (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Notes Tables | |
Revenue from External Customers by Geographic Areas [Table Text Block] | Three months ended Nine months ended July 31 July 31 2020 2019 2020 2019 United States $ 11,086,545 $ 14,421,221 $ 33,432,451 $ 43,460,603 Outside the United States 2,552,624 2,945,847 7,957,542 9,614,308 Total net sales $ 13,639,169 $ 17,367,068 $ 41,389,993 $ 53,074,911 |
Note 1 - General (Details Textu
Note 1 - General (Details Textual) - USD ($) | Jul. 31, 2020 | Nov. 01, 2019 |
Operating Lease, Liability, Total | $ 1,358,798 | |
Accounting Standards Update 2016-02 [Member] | ||
Operating Lease, Right-of-Use Asset | $ 138,834 | |
Operating Lease, Liability, Total | $ 139,367 |
Note 2 - Stock Incentive Plan_2
Note 2 - Stock Incentive Plans and Other Share-based Compensation (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 83,880 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in shares) | 5,774 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 2 years | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 435,000 | $ 435,000 | ||
Plan 2017 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 362,000 | 362,000 | ||
Plan 2017 [Member] | Employees, Consultant and Non-employee Directors [Member] | ||||
Share-based Payment Arrangement, Expense | $ 40,605 | $ 42,549 | $ 101,638 | $ 941,253 |
Plan 2017 [Member] | Non-employee Directors [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 58,880 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 1 year | |||
Plan 2017 [Member] | Consultant [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 25,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 5 years | |||
The 2017 Stock Incentive Plan [Member] | Restricted Stock [Member] | ||||
Deferred Compensation Arrangement with Individual, Allocated Share-based Compensation Expense | $ 35,917 | $ 35,597 | $ 95,245 | $ 89,241 |
Note 3 - Allowance for Doubtf_3
Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable - Summary of Changes in the Allowance for Doubtful Accounts for Trade Accounts Receivable (Details) - USD ($) | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Balance at beginning of period | $ 99,562 | $ 64,242 |
Bad debt expense | 431,746 | 56,483 |
Losses charged to allowance | 0 | (25,061) |
Balance at end of period | $ 531,308 | $ 95,664 |
Note 4 - Inventories - Componen
Note 4 - Inventories - Components of Inventories (Details) - USD ($) | Jul. 31, 2020 | Oct. 31, 2019 |
Finished goods | $ 5,111,049 | $ 5,845,973 |
Work in process | 3,343,469 | 3,321,216 |
Raw materials | 8,411,730 | 8,632,230 |
Production supplies | 263,213 | 296,208 |
Total | $ 17,129,461 | $ 18,095,627 |
Note 5 - Product Warranties (De
Note 5 - Product Warranties (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | Oct. 31, 2018 | |
Standard and Extended Product Warranty Accrual, Ending Balance | $ 110,000 | $ 200,000 | $ 110,000 | $ 200,000 | $ 120,000 | $ 180,000 |
Product Warranty Expense | 44,347 | $ 69,075 | 55,736 | $ 225,629 | ||
Accounts Payable and Accrued Liabilities [Member] | ||||||
Standard and Extended Product Warranty Accrual, Ending Balance | $ 110,000 | $ 110,000 | $ 120,000 |
Note 5 - Product Warranties - C
Note 5 - Product Warranties - Changes in Accrual for Product Warranties (Details) - USD ($) | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Balance at beginning of period | $ 120,000 | $ 180,000 |
Liabilities accrued for warranties issued during the period | 141,033 | 222,520 |
Warranty claims and costs paid during the period | (65,736) | (205,629) |
Changes in liability for pre-existing warranties during the period | (85,297) | 3,109 |
Balance at end of period | $ 110,000 | $ 200,000 |
Note 6 - Long-term Debt and N_3
Note 6 - Long-term Debt and Notes Payable to Bank (Details Textual) - USD ($) | Jul. 31, 2020 | Jul. 24, 2020 | Apr. 15, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 |
Proceeds from Paycheck Protection Program Under CARES Act | $ 4,981,400 | $ 4,981,400 | $ 0 | |||
Notes Payable, SBA PPP Loan, Periodic Payment, | $ 280,335 | |||||
Notes Payable, SBA PPP Loan, Current | $ 2,469,042 | 2,469,042 | $ 0 | |||
Notes Payable, SBA PPP Loan, Noncurrent | 2,512,358 | 2,512,358 | 0 | |||
Pinnacle Financial Partners [Member] | Revolving Credit Facility [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 6,500,000 | |||||
Long-term Line of Credit, Noncurrent | 4,600,000 | 4,600,000 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 2,200,000 | $ 2,200,000 | 850,000 | |||
Line of Credit, Current | $ 5,700,000 | |||||
North Mill Capital LLC [Member] | Revolving Credit Facility [Member] | ||||||
Line of Credit Facility, Percent of Eligible Accounts | 85.00% | |||||
Line of Credit Facility, Percent of Eligible Inventory | 35.00% | |||||
Line of Credit Facility, Additional Capacity for Advances | $ 5,000,000 | |||||
Line of Credit Facility, Restricted Capacity for Advances | 1,500,000 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 18,000,000 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.75% | 4.75% | 4.75% | |||
Debt Instrument, Term (Year) | 3 years | |||||
Debt Instrument, Term Extensions (Year) | 1 year | |||||
North Mill Capital LLC [Member] | Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 6.00% | |||||
North Mill Capital LLC [Member] | Revolving Credit Facility [Member] | Prime Rate [Member] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | 1.50% | ||||
Virginia Real Estate Loan and North Carolina Real Estate Loan [Member] | Pinnacle Financial Partners [Member] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.95% | 3.95% |
Note 6 - Long-term Debt and N_4
Note 6 - Long-term Debt and Note Payable to Bank - Long-term Debt (Details) - USD ($) | Jul. 31, 2020 | Oct. 31, 2019 |
Long-term Loan | $ 5,241,218 | $ 5,908,623 |
Less current installments | 308,979 | 738,955 |
Long-term debt, excluding current installments | 4,932,239 | 5,169,668 |
Virginia Real Estate Loan [Member] | ||
Long-term Loan | 4,173,324 | 4,580,173 |
North Carolina Real Estate Loan [Member] | ||
Long-term Loan | $ 1,067,894 | $ 1,328,450 |
Note 6 - Long-term Debt and N_5
Note 6 - Long-term Debt and Note Payable to Bank - Long-term Debt (Details) (Parentheticals) - USD ($) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2020 | Oct. 31, 2019 | |
Virginia Real Estate Loan [Member] | ||
Original principal | $ 6,500,000 | $ 6,500,000 |
Monthly installments | $ 31,812 | $ 31,812 |
Debt Instrument, Interest Rate, Stated Percentage | 3.95% | 3.95% |
Final payment | $ 3,644,211 | |
North Carolina Real Estate Loan [Member] | ||
Original principal | 2,240,000 | $ 2,240,000 |
Monthly installments | $ 10,963 | $ 10,963 |
Debt Instrument, Interest Rate, Stated Percentage | 3.95% | 3.95% |
Final payment | $ 1,255,850 | $ 1,255,850 |
Maturity date | May 1, 2024 | May 1, 2024 |
Note 7 - Leases (Details Textua
Note 7 - Leases (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020USD ($)ft² | Jul. 31, 2020USD ($)ft² | Feb. 06, 2020 | Apr. 30, 2015ft² | |
Operating Lease, Expense | $ 99,327 | $ 293,756 | ||
Operating Lease, Weighted Average Remaining Lease Term (Month) | 47 months 3 days | 47 months 3 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 5.10% | 5.10% | ||
Operating Lease, Payments | $ 96,681 | $ 286,131 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 1,462,817 | |||
Other Assets [Member] | ||||
Operating Lease, Right-of-Use Asset | 1,349,149 | 1,349,149 | ||
Accounts Payable and Accrued Liabilities [Member] | ||||
Operating Lease, Liability, Current | 327,869 | 327,869 | ||
Other Noncurrent Liabilities [Member] | ||||
Operating Lease, Liability, Noncurrent | $ 1,030,929 | $ 1,030,929 | ||
Operating Lease for Office, Manufacturing and Warehouse Space in Plano, Texas [Member] | ||||
Area of Real Estate Property (Square Foot) | ft² | 34,000 | 34,000 | ||
Operating Lease for Warehouse Space in Roanoke, Virginia [Member] | ||||
Area of Real Estate Property (Square Foot) | ft² | 36,000 | |||
Lessee, Operating Lease, Term of Contract (Month) | 12 months | |||
Lease Term, Extension, Term (Year) | 1 year | |||
Lessee, Operating Lease, Renewal Term (Month) | 36 months | |||
Operating Lease For Office Equipment [Member] | ||||
Lessee, Operating Lease, Term of Contract (Month) | 60 months | 60 months |
Note 7 - Leases - Future Paymen
Note 7 - Leases - Future Payments Due (Details) | Jul. 31, 2020USD ($) | |
2020 (1) | $ 96,681 | [1] |
2021 | 389,398 | |
2022 | 389,807 | |
2023 | 327,071 | |
2024 | 274,132 | |
Thereafter | 26,370 | |
Total undiscounted lease payments | 1,503,459 | |
Present value discount | (144,661) | |
Total operating lease liability | $ 1,358,798 | |
[1] | Remaining three months of fiscal year 2020. |
Note 9 - Net Loss Per Share (De
Note 9 - Net Loss Per Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 173,115 | 141,257 | 125,877 | 124,242 |
Note 9 - Net Loss Per Share - C
Note 9 - Net Loss Per Share - Components of Reconciliation of Numerators and Denominators Net Loss Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net loss (numerator) | $ (1,433,830) | $ (1,689,181) | $ (2,591,888) | $ (1,085,294) | $ (617,425) | $ (3,310,020) | $ (5,714,899) | $ (5,012,739) |
Shares (denominator) (in shares) | 7,352,673 | 7,319,274 | 7,354,579 | 7,409,465 | ||||
Basic and diluted net loss per share (in dollars per share) | $ (0.20) | $ (0.15) | $ (0.78) | $ (0.68) |
Note 10 - Segment Information_2
Note 10 - Segment Information and Business and Credit Concentrations (Details Textual) - Customer Concentration Risk [Member] - Revenue Benchmark [Member] | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Concentration Risk, Number of Customers | 1 | 1 | 1 | 2 |
One Customer [Member] | ||||
Concentration Risk, Percentage | 16.10% | 15.10% | 13.70% | |
Customer One [Member] | ||||
Concentration Risk, Percentage | 14.50% | |||
Customer Two [Member] | ||||
Concentration Risk, Percentage | 14.10% |
Note 11 - Revenue Recognition_2
Note 11 - Revenue Recognition (Details Textual) - USD ($) | Jul. 31, 2020 | Oct. 31, 2019 |
Contract with Customer, Liability, Total | $ 110,937 | $ 19,850 |
Contract with Customer, Refund Liability, Total | $ 118,675 | $ 273,512 |
Note 11 - Revenue Recognition -
Note 11 - Revenue Recognition - Revenue Attributed to United States and All Other Countries (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net sales | $ 13,639,169 | $ 17,367,068 | $ 41,389,993 | $ 53,074,911 |
UNITED STATES | ||||
Net sales | 11,086,545 | 14,421,221 | 33,432,451 | 43,460,603 |
Non-US [Member] | ||||
Net sales | $ 2,552,624 | $ 2,945,847 | $ 7,957,542 | $ 9,614,308 |