Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 13, 2010
OPTICAL CABLE CORPORATION
(Exact name of registrant as specified in its charter)
| Virginia | 000-27022 | 54-1237042 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
| 5290 Concourse Drive Roanoke, VA | 24019 | |
| (Address of principal executive offices) | (Zip Code) |
(540) 265-0690
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Table of Contents
| Item 2.02 | Results of Operations and Financial Condition | |
| Item 9.01 | Financial Statements and Exhibits | |
| Signatures | ||
| Exhibits | ||
| Item 2.02. | Results of Operations and Financial Condition |
On September 13, 2010, Optical Cable Corporation issued a press release announcing its fiscal 2010 third quarter financial results. Also on September 13, 2010, Optical Cable Corporation held a conference call to discuss the financial results for its fiscal 2010 third quarter. The press release is attached hereto as Exhibit 99.1 and the transcript for the conference call is attached as Exhibit 99.2.
| Item 9.01. | Financial Statements and Exhibits |
(c) Exhibits
The following are filed as Exhibits to this Report.
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Press release issued September 13, 2010 (FILED HEREWITH) | |
| 99.2 | Transcript of conference call on September 13, 2010 (FILED HEREWITH) | |
Table of Contents
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OPTICAL CABLE CORPORATION | ||
| By: | /s/ TRACY G. SMITH | |
| Name: | Tracy G. Smith | |
| Title: | Senior Vice President and Chief Financial Officer | |
Dated: September 15, 2010
Table of Contents
OPTICAL CABLE CORPORATION
Current report on Form 8-K
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Press release issued September 13, 2010 (FILED HEREWITH) | |
| 99.2 | Transcript of conference call on September 13, 2010 (FILED HEREWITH) | |
Exhibit 99.1
|
OPTICAL CABLE CORPORATION 5290 Concourse Drive Roanoke, VA 24019 (Nasdaq GM: OCCF) www.occfiber.com |
AT THE COMPANY:
| Neil Wilkin | Tracy Smith | |
| Chairman, President & CEO | Senior Vice President & CFO | |
| (540) 265-0690 | (540) 265-0690 | |
| investorrelations@occfiber.com | investorrelations@occfiber.com |
AT JOELE FRANK, WILKINSON BRIMMER KATCHER:
| Andrew Siegel | Aaron Palash | |
| (212) 355-4449 ext. 127 | (212) 355-4449 ext. 103 | |
| occf-jfwbk@joelefrank.com | occf-jfwbk@joelefrank.com |
FOR IMMEDIATE RELEASE
OPTICAL CABLE CORPORATION REPORTS
FISCAL THIRD QUARTER 2010 FINANCIAL RESULTS
OCC Returns to Profitability in Third Quarter
on Highest Quarterly Net Sales in Company’s History
ROANOKE, VA, September 13, 2010 — Optical Cable Corporation (Nasdaq GM: OCCF) (“OCC” or the “Company”) today announced financial results for its fiscal third quarter ended July 31, 2010. The Company achieved significant increases in net sales and gross profit for both the quarter and year-to-date periods compared to the same periods in fiscal 2009, and returned to profitability in the third quarter of fiscal 2010.
Third Quarter 2010 Financial Results
Net sales during the third quarter of fiscal year 2010 were the highest in OCC’s history—exceeding the quarterly net sales that OCC achieved in the fourth quarter of fiscal year 2008.
Consolidated net sales for the third quarter of fiscal year 2010 increased 32.2% to $18.8 million compared to consolidated net sales of $14.2 million for the comparable period last year. Net sales growth during the third quarter was achieved over a broad customer base and product mix, with notable increases in both commercial and specialty markets, despite the difficult economic environment. The acquisition of Applied Optical Systems, Inc. (“AOS”) by OCC on October 31, 2009 also contributed to the net sales growth achieved by the Company for the third quarter of fiscal year 2010.
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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Net sales of OCC’s fiber optic cable and enterprise connectivity products increased 14.9% and 28.7%, respectively, during the third quarter of fiscal 2010, compared to the same period last year. Net sales of OCC’s applied interconnect system products (added to OCC’s product offering following the Company’s acquisition of AOS) improved during the third quarter of fiscal 2010 compared to the first and second quarters of fiscal 2010.
Geographically, OCC achieved consolidated net sales growth both in international markets and within the United States during the third quarter of fiscal year 2010. Net sales to customers located outside of the United States increased 83.6% in the third quarter of fiscal 2010 compared to the same period last year, and net sales to customers located in the United States increased 17.3% as compared to the same period last year.
Gross profit increased 51.8% to $6.8 million in the third quarter of fiscal 2010, compared to $4.5 million in the third quarter of fiscal 2009. Gross profit margin, or gross profit as a percentage of net sales, increased to 36.2% in the third quarter of fiscal 2010 from 31.6% in the third quarter of fiscal year 2009.
OCC recorded net income attributable to the Company of $575,000, or $0.09 per basic and diluted share, for the third quarter of fiscal year 2010, compared to a net loss of $1.1 million, or $0.19 per basic and diluted share, for the same period last year.
Fiscal Year-to-Date 2010 Financial Results
Consolidated net sales for the first nine months of fiscal 2010 increased 10.2% to $49.0 million compared to net sales of $44.5 million for the same period in fiscal 2009. Net sales in both the Company’s commercial markets and its specialty markets increased during the first nine months of fiscal year 2010 compared to the same period last year. The acquisition of AOS by OCC on October 31, 2009 also contributed to the net sales growth achieved by the Company for the first nine months of fiscal year 2010.
Based on year-to-date results, OCC expects that net sales for the fiscal year ending October 31, 2010 will be the highest in the Company’s 27 year history.
Gross profit increased 10.7% to $16.6 million in the first nine months of fiscal 2010, compared to $15.0 million for the same period last year. Gross profit margin, or gross profit as a percentage of net sales, increased slightly to 33.8% in the first nine months of fiscal 2010 compared to 33.7% for the first nine months of fiscal 2009.
For the first nine months of fiscal 2010, OCC recorded a net loss attributable to the Company of $7.2 million, or $1.21 per basic and diluted share, compared to a net loss of $1.8 million, or $0.33 per basic and diluted share, for the first nine months of fiscal 2009. Significantly contributing to the net loss for the first nine months of fiscal 2010 was a non-recurring, non-cash impairment charge of $6.2 million recorded in the second fiscal quarter to write-off the carrying value of the goodwill associated with the acquisition of AOS.
Excluding the non-recurring, non-cash goodwill impairment charge, the Company would have reported a net loss attributable to OCC of $960,000, or $0.16 per share, for the first nine months of fiscal 20101.
| 1 | This proforma net loss and net loss per share attributable to OCC are calculated by adding the impairment charge of $6.2 million to the Company’s net loss attributable to OCC as reported for the nine months ended July 31, 2010. There is no tax benefit associated with the impairment charge, as it is considered a non-deductible permanent item for tax purposes, so there is no change to the tax benefit as reported for the period in determining the proforma net loss and net loss per share attributable to OCC. |
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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Management’s Comments
Neil Wilkin, President and Chief Executive Officer of OCC, said “Over the past year, OCC has taken steps to grow both organically and through strategic acquisitions in order to offer a comprehensive suite of products to meet the full range of our customers’ needs. We are pleased to report that these strategic investments are already bearing fruit, as evidenced by the fact that OCC returned to profitability in our third quarter and generated the highest quarterly net sales in the Company’s history. At the same time, and while maintaining our customer focus, we have significantly improved our cost structure and enhanced our financial flexibility.”
Mr. Wilkin added, “Importantly, we believe our results in the third quarter underscore the strong operating leverage OCC has in its business model—providing OCC with the ability to substantially increase earnings as net sales grow. Further, we believe we are now beginning to realize product line synergies from our strategic acquisitions. As a result of our strategic initiatives, we believe OCC is exceptionally well-positioned in our target markets with a full suite of high quality products that provide our customers with unrivaled integrated solutions. We look forward to continuing to build on OCC’s strong momentum by meeting and exceeding the needs of customers with the goal of creating long-term value for the Company’s shareholders.”
Company Information
Optical Cable Corporation is a leading manufacturer of a broad range of fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market, offering an integrated suite of high quality, warranted products which operate as a system solution or seamlessly integrate with other providers’ offerings. OCC’s product offerings include designs for uses ranging from commercial, enterprise network, datacenter, residential and campus installations to customized products for specialty applications and harsh environments, including military, industrial, mining and broadcast applications. OCC products include fiber optic and copper cabling, fiber optic and copper connectors, specialty fiber optic and copper connectors, fiber optic and copper patch cords, pre-terminated fiber optic and copper cable assemblies, racks, cabinets, datacom enclosures, patch panels, face plates, multi-media boxes and other cable and connectivity management accessories, and are designed to meet the most demanding needs of end-users, delivering a high degree of reliability and outstanding performance characteristics.
OCC is internationally recognized for pioneering the design and production of fiber optic cables for the most demanding military field applications, as well as of fiber optic cables suitable for both indoor and outdoor use, and creating a broad product offering built on the evolution of these fundamental technologies. OCC also is internationally recognized for its role in establishing copper connectivity data communications standards, through its innovative and patented technologies.
Founded in 1983, OCC is headquartered in Roanoke, Virginia with offices, manufacturing and warehouse facilities located in each of Roanoke, Virginia, near Asheville, North Carolina and near Dallas, Texas. OCC primarily manufactures its fiber optic cables at its Roanoke facility which is ISO 9001:2008 registered and MIL-STD-790F certified, its enterprise connectivity products at its Asheville facility which is ISO 9001:2008 registered, and its military and harsh environment connectivity products and systems at its Dallas facility which is MIL-STD-790F certified.
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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Optical Cable Corporation, OCC, Superior Modular Products, SMP Data Communications, Applied Optical Systems, and associated logos are trademarks of Optical Cable Corporation.
Further information about OCC is available on the Internet at www.occfiber.com.
FORWARD-LOOKING INFORMATION
This news release by Optical Cable Corporation and its subsidiaries (collectively, the “Company” or “OCC”) may contain certain forward-looking information within the meaning of the federal securities laws. The forward-looking information may include, among other information, (i) statements concerning the Company’s outlook for the future, (ii) statements of belief, anticipation or expectation, (iii) future plans, strategies or anticipated events, and (iv) similar information and statements concerning matters that are not historical facts. Such forward-looking information is subject to variables, uncertainties, contingencies and risks that may cause actual events to differ materially from the Company’s expectations. Additionally, such variables, uncertainties, contingencies and risks may adversely affect the Company and the Company’s future results of operations and future financial condition. Factors that could cause or contribute to such differences from the Company’s expectations or could adversely affect the Company, include, but are not limited to: the level of sales to key customers, including distributors; timing of certain projects and purchases by key customers; the economic conditions affecting network service providers; corporate and/or government spending on information technology; actions by competitors; fluctuations in the price of raw materials (including optical fiber, copper, gold and other precious metals, and plastics and other materials affected by petroleum product pricing); fluctuations in transportation costs; the Company’s dependence on customized equipment for the manufacture of its products and a limited number of production facilities; the Company’s ability to protect its proprietary manufacturing technology; the Company’s ability to replace royalty income as existing patented and licensed products expire by developing and licensing new products; market conditions influencing prices or pricing; the Company’s dependence on a limited number of suppliers; the loss of or conflict with one or more key suppliers or customers; an adverse outcome in litigation, claims and other actions, and potential litigation, claims and other actions against the Company; an adverse outcome in regulatory reviews and audits and potential regulatory reviews and audits; adverse changes in state tax laws and/or positions taken by state taxing authorities affecting the Company; technological changes and introductions of new competing products; changes in end-user preferences for competing technologies, relative to the Company’s product offering; economic conditions that affect the telecommunications sector, certain technology sectors or the economy as a whole; changes in demand of our products from certain competitors for which we provide private label connectivity products; terrorist attacks or acts of war, and any current or potential future military conflicts; changes in the level of military spending by the United States government; ability to retain key personnel; inability to recruit needed personnel; poor labor relations; the inability to successfully integrate the operations of the Company’s new subsidiaries; the impact of changes in accounting policies, including those by the Securities and Exchange Commission and the Public Company Accounting Oversight Board; the Company’s ability to continue to successfully comply with, and the cost of compliance with, the provisions of Section 404 of the Sarbanes-Oxley Act of 2002 or any revisions to that act which apply to the Company; the impact of changes and potential changes in federal laws and regulations adversely affecting our business and/or which result in increases in our direct and indirect costs as we comply with such laws and regulations; impact of future consolidation among competitors and/or among customers adversely affecting the Company’s position with its customers and/or its market position; actions by customers adversely affecting the Company in reaction to the expansion of its product offering in any manner, including, but not limited to, by offering products that compete with its customers, and/or by entering into alliances with, making investments in or with, and/or acquiring parties that compete with and/or have conflicts with customers of the Company;
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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adverse reactions by customers, vendors or other service providers to unsolicited proposals regarding the management of the Company, and the additional costs of considering and possibly defending the Company’s position on such unsolicited proposals; impact of weather or natural disasters in the areas of the world in which the Company operates and markets its products; economic downturns and/or changes in market demand, exchange rates, productivity, or market and economic conditions in the areas of the world in which the Company operates and markets its products, and the Company’s success in managing the risks involved in the foregoing. The Company cautions readers that the foregoing list of important factors is not exclusive. Furthermore, the Company incorporates by reference those factors included in current reports on Form 8-K, in the annual report on Form 10-K for the fiscal year ended October 31, 2009, and/or in the Company’s other filings.
(Financial Tables Follow)
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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OPTICAL CABLE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands, except per share data)
(unaudited)
| Three Months Ended July 31, |
Nine Months Ended July 31, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales |
$ | 18,779 | $ | 14,207 | $ | 49,042 | $ | 44,509 | ||||||||
| Cost of goods sold |
11,972 | 9,725 | 32,449 | 29,515 | ||||||||||||
| Gross profit |
6,807 | 4,482 | 16,593 | 14,994 | ||||||||||||
| SG&A expenses |
5,999 | 5,387 | 18,240 | 17,009 | ||||||||||||
| Royalty income, net |
(315 | ) | (297 | ) | (925 | ) | (679 | ) | ||||||||
| Amortization of intangible assets |
147 | 208 | 440 | 626 | ||||||||||||
| Impairment of goodwill |
— | — | 6,246 | — | ||||||||||||
| Impairment of intangible assets (other than goodwill) |
— | 190 | — | 190 | ||||||||||||
| Income (loss) from operations |
976 | (1,006 | ) | (7,408 | ) | (2,152 | ) | |||||||||
| Interest income (expense), net |
(159 | ) | (170 | ) | (384 | ) | (504 | ) | ||||||||
| Other, net |
(1 | ) | — | 67 | 25 | |||||||||||
| Other expense, net |
(160 | ) | (170 | ) | (317 | ) | (479 | ) | ||||||||
| Income (loss) before income taxes |
816 | (1,176 | ) | (7,725 | ) | (2,631 | ) | |||||||||
| Income tax expense (benefit) |
282 | (68 | ) | (363 | ) | (797 | ) | |||||||||
| Net income (loss) |
$ | 534 | $ | (1,108 | ) | $ | (7,362 | ) | $ | (1,834 | ) | |||||
| Net loss attributable to noncontrolling Interest |
(41 | ) | — | (155 | ) | — | ||||||||||
| Net income (loss) attributable to OCC |
$ | 575 | $ | (1,108 | ) | $ | (7,207 | ) | $ | (1,834 | ) | |||||
| Net income (loss) per share attributable to OCC: Basic and diluted |
$ | 0.09 | $ | (0.19 | ) | $ | (1.21 | ) | $ | (0.33 | ) | |||||
| PROFORMA net income (loss) attributable to OCC, EXCLUDING impairment of goodwill (1) |
$ | 575 | $ | (1,108 | ) | $ | (960 | ) | $ | (1,834 | ) | |||||
| PROFORMA net income (loss) per share attributable to OCC, EXCLUDING impairment of goodwill: Basic and diluted (1) |
$ | 0.09 | $ | (0.19 | ) | $ | (0.16 | ) | $ | (0.33 | ) | |||||
—MORE—
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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OPTICAL CABLE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CON’T)
(thousands, except per share data)
(unaudited)
| Three Months Ended July 31, |
Nine Months Ended July 31, | |||||||
| 2010 | 2009 | 2010 | 2009 | |||||
| Weighted average shares outstanding: |
||||||||
| Basic and diluted |
6,495 | 5,832 | 5,933 | 5,549 | ||||
| (1) | Proforma net income (loss) attributable to OCC and proforma net income (loss) per share attributable to OCC are calculated by excluding the non-cash, non-recurring impairment of goodwill charge of $6.2 million recorded during the second quarter of fiscal year 2010 from the Company’s net loss attributable to OCC as reported for the nine months ended July 31, 2010. There is no tax benefit associated with the goodwill impairment charge, as it is considered a non-deductible permanent item for tax purposes. Accordingly, there is no change to the tax benefit as reported for the period in determining the proforma net loss and net loss per share. |
—MORE—
Optical Cable Corp. – Third Quarter 2010 Earnings Release
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OPTICAL CABLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(thousands)
(unaudited)
| July 31, 2010 |
October 31, 2009 | ||||||
| Cash and cash equivalents |
$ | 2,058 | $ | 1,948 | |||
| Trade accounts receivable, net |
10,494 | 9,533 | |||||
| Inventories |
13,404 | 12,306 | |||||
| Other current assets |
2,857 | 3,915 | |||||
| Total current assets |
$ | 28,813 | $ | 27,702 | |||
| Non-current assets |
15,467 | 22,625 | |||||
| Total assets |
$ | 44,280 | $ | 50,327 | |||
| Current liabilities |
$ | 7,656 | $ | 7,632 | |||
| Non-current liabilities |
10,321 | 9,438 | |||||
| Total liabilities |
$ | 17,977 | $ | 17,070 | |||
| Total shareholders’ equity attributable to OCC |
26,458 | 33,257 | |||||
| Noncontrolling interest |
(155 | ) | — | ||||
| Total shareholders’ equity |
26,303 | 33,257 | |||||
| Total liabilities and shareholders’ equity |
$ | 44,280 | $ | 50,327 | |||
###
Exhibit 99.2
FINAL TRANSCRIPT
Conference Call Transcript
OCCF - Q3 2010 Optical Cable Earnings Conference Call
Event Date/Time: September 13, 2010 / 01:00PM ET
CORPORATE PARTICIPANTS
Neil Wilkin
Optical Cable Corporation - - President, Chairman & CEO
Tracy Smith
Optical Cable Corporation - CFO, SVP
Andrew Siegel
Joele Frank, Wilkinson Brimmer Katcher - IR
PRESENTATION
Operator
Good afternoon. My name is Melissa and I will be your conference operator today. At this time I would like to welcome everyone to Optical Cable Corporation’s third quarter fiscal year 2010 earnings conference call. (Operator Instructions). Thank you. Mr. Siegel you may begin your conference.
Andrew Siegel - Joele Frank, Wilkinson Brimmer Katcher - IR
Thank you very much. Good afternoon and thank you all for participating on Optical Cable Corporation’s third quarter fiscal year 2010 conference call. By this time everyone should have a copy of the earnings press release. If you don’t have it please visit occfiber.com for a copy.
On the call with us today is Neil Wilkin, Chairman, President and Chief Executive Officer of OCC. Before we begin, I would like to remind everyone that this call may contain forward-looking statements that involve risks and uncertainties. The actual future results of Optical Cable Corporation may differ materially due to a number of factors including, but not limited to, those factors set forth in detail in the “forward-looking statements” section of yesterday’s, sorry, this morning’s press release.
These cautionary statements apply to the contents of the internet webcast on occfiber.com as well as today’s call. Now I’d like to turn the call over to Neil Wilkin. Neil, please begin.
Neil Wilkin - Optical Cable Corporation - President, Chairman & CEO
Thank you, Andrew, and good morning, everyone. Joining me today on the call—actually good afternoon. I’m having the same problem, Andrew, that you had. I’m actually on Pacific time at the moment.
In any event, joining me on today’s call is Tracy Smith our Senior Vice President and Chief Financial Officer. I’d like to begin the call today with a few opening remarks. Then I will have Tracy review the third quarter results for the three-month period and the nine-month period ended July 31, 2010 in more detail. After Tracy’s remarks we will answer as many of your questions as we can.
I would like to note that during the Q&A session we will—as we normally do—take questions from analysts and institutional investors. Additionally, we will also answer questions, if any, from individual investors that were submitted prior to today’s call.
As a reminder, when we do offer an opportunity for shareholders to submit questions in advance of our earnings call, we will include instructions regarding such submissions in our press release announcing the date and time of our earnings call—as we did for today’s call.
We are pleased to report that OCC returned to profitability in the third quarter of fiscal 2010 and generated the highest quarterly net sales in the Company’s history. We achieved significant increases in net sales and gross profit for both the quarter and the year-to-date periods, compared to the same periods in fiscal 2009.
Over the past two and a half years, OCC has taken steps to grow both organically and through strategic acquisitions in order to offer a comprehensive suite of products to meet the full range of our customers’ needs. Concurrently, we have significantly improved our cost structure and have enhanced our financial flexibility while maintaining our customer focus.
We believe that our results in the third quarter underscore the strong operating leverage OCC has in its business model—providing OCC with the ability to substantially increase earnings as net sales grow. Further, we believe that we are now beginning to realize product line synergies from our strategic acquisitions.
Based on year-to-date results, OCC forecasts that net sales for the fiscal year ending October 31, 2010 will be the highest in the Company’s 27-year history.
We are confident that OCC is well-positioned in our target markets with a full suite of high quality products that provide our customers with unrivaled integrated solutions. We look forward to continuing to build on OCC’s strong momentum by meeting and exceeding the needs of our customers with the goal of creating long-term value for the Company’s shareholders.
And with that, I will now turn the call over to Tracy Smith, our CFO, who will review some specifics regarding our third quarter and year-to-date fiscal year 2010 financial results.
Tracy Smith - Optical Cable Corporation - CFO, SVP
Thank you, Neil.
Consolidated net sales increased 32.2% to $18.8 million for the third quarter of fiscal year 2010 compared to consolidated net sales of $14.2 million for the same period last year. The increase in net sales during the third quarter of fiscal year 2010 when compared to the same period last year was attributable to increases in both our commercial market and our specialty markets. The acquisition of AOS by OCC on October 31, 2009 also contributed to the net sales growth we achieved for the quarter.
Net sales to customers located outside of the United States increased 83.6% in the third quarter of fiscal year 2010, compared to the same period last year, and net sales to customers located in the United States increased 17.3%.
Consolidated net sales increased 10.2% to $49 million for the first nine months of fiscal year 2010, compared to net sales of $44.5 million for the same period in fiscal year 2009. We experienced an increase in net sales during the first nine months of fiscal year 2010 in both our commercial market and our specialty markets compared to the same period last year. We experienced increases in our net sales during the first nine months of fiscal year 2010 of our enterprise connectivity products compared to the same period last year. The acquisition of AOS by OCC on October 31, 2009 also contributed to the net sales growth we achieved for the year-to-date period.
Net sales to customers located outside of the United States increased 17.1% in the first nine months of fiscal year 2010 compared to the same period last year, and net sales to customers located in the United States increased 7.7%.
Gross profit increased 51.8% to $6.8 million in the third quarter of fiscal year 2010, compared to $4.5 million for the same period last year. Gross profit margin, or gross profit as a percentage of net sales, increased to 36.2% in the third quarter of fiscal year 2010 from 31.6% in the third quarter of fiscal year 2009.
When comparing the third quarter of fiscal year 2010 to the same period last year, the gross profit margin associated with the sale of fiber optic cable products increased to 39.6% from 36.3% and the gross profit margin associated with our enterprise connectivity products increased to 24.4% from 17.1%. The gross profit margin associated with our applied interconnect system products was 29.5% for the third quarter of fiscal year 2010.
For the year-to-date period, gross profit increased 10.7% to $16.6 million from $15 million for the same period in fiscal year 2009. Gross profit margin increased slightly to 33.8% for the first nine months of fiscal year 2010 from 33.7% for the same period last year.
Our gross profit margins for our product lines tend to be higher when we achieve a higher net sales level of those product lines, as we did in the third quarter of fiscal year 2010 when compared to the same period in fiscal year 2009, as certain fixed manufacturing costs are spread over higher sales volumes.
SG&A expenses increased to $6 million in the third quarter of fiscal year 2010 from $5.4 million for the same period last year. SG&A expenses as a percentage of net sales were 31.9% in the third quarter of fiscal year 2010 compared to 37.9% in the third quarter of fiscal year 2009.
However, excluding the acquisition of AOS, we believe our SG&A expenses would have decreased in the third quarter of fiscal year 2010 when compared to the same period last year, as a result of cost reductions initiatives.
We reported net income attributable to OCC of $575,000, or $0.09 per basic and diluted share, in the third quarter of fiscal year 2010, compared to a net loss of $1.1 million, or $0.19 per basic and diluted share, for the third quarter of fiscal year 2009.
We reported a net loss attributable to OCC of $7.2 million, or $1.21 per basic and diluted share, in the first nine months of fiscal year 2010, compared to a net loss of $1.8 million, or $0.33 per basic and diluted share, for the first nine months of fiscal year 2009.
Significantly contributing to the net loss for the first nine months of fiscal year 2010 was a non-recurring, non-cash impairment charge of $6.2 million recorded in the second fiscal quarter to write-off the carrying value of the goodwill associated with the acquisition of AOS.
Excluding the nonrecurring, non-cash goodwill impairment charge, we would have reported a net loss of $960,000, or $0.16 per basic and diluted share, for the first nine months of fiscal year 2010.
This proforma net loss and net loss per share attributable to OCC are calculated by adding the impairment charge of $6.2 million to our net loss attributable to OCC as reported for the year-to-date period. There is no tax benefit associated with the impairment charge, as it is considered a non-deductible permanent item for tax purposes, so there is no change to the tax benefit as reported for the period in determining the proforma net loss and net loss per share attributable to OCC.
As of July 31, 2010, we had outstanding loan balances of $8.4 million under our real estate loans, borrowings on our commercial loan of $1.1 million, and a total of $4.9 million in available credit.
With that, I will turn the call back over to Neil.
Neil Wilkin - Optical Cable Corporation - President, Chairman & CEO
Thank you, Tracy. And now we’re happy to answer as many of your questions as we can. Operator, if you would please indicate the instructions for participants to call in their questions, I’d appreciate it.
QUESTION AND ANSWER
Operator
(Operator Instructions). At this time there are no questions. I’ll turn it back to Neil Wilkin for closing remarks.
Andrew Siegel - Joele Frank, Wilkinson Brimmer Katcher - IR
Neil, this is Andrew. Unfortunately, in advance of today’s call we did not receive any questions from individual stockholders. So there are no questions at this time from individual shareholders. Operator, could you please re-prompt? And if there are no further questions we can turn it back to Neil.
Operator
Operator: (Operator Instructions). At this time there are no questions.
Neil Wilkin - Optical Cable Corporation - President, Chairman & CEO
Well, thank you. In closing, I’d like to take a moment to thank all the employees of OCC for their hard work and for operating safely during the quarter. And I’d also like to thank everyone who’s joining us on the call today. As always we appreciate your time and your interest in Optical Cable Corporation.
Operator
Thank you for participating in today’s conference call. You may now disconnect.