Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.22.0.1
Segment Reporting
 3 Months Ended
Jan. 02, 2022
Segment Reporting [Abstract]  
Segment Reporting

Note 3 - Segment Reporting

 

The Company’s reportable segments are strategic businesses offering similar products to similar markets and customers; however, the companies are operated and managed separately due to differences in manufacturing technology, equipment, geographic location, and specific product mix. Applied Optics Center was acquired as a unit, and the management at the time of the acquisition was retained. Both the Applied Optics Center and Optex Systems – Richardson operate as reportable segments under the Optex Systems, Inc. corporate umbrella.

 

The Applied Optics Center segment also serves as the key supplier of laser coated filters used in the production of periscope assemblies for the Optex Systems-Richardson (“Optex Systems”) segment. Intersegment sales and transfers are accounted for at annually agreed to pricing rates based on estimated segment product cost, which includes segment direct manufacturing and general and administrative costs, but exclude profits that would apply to third party external customers.

 

 

Optex Systems (OPX) – Richardson, Texas

 

The Optex Systems segment revenue is comprised of approximately 82% domestic military customers and 18% foreign military customers. For the three months ended January 2, 2022, Optex Systems – Richardson represented 43% of the Company’s total consolidated revenue and consisted of the U.S. government (15%) one major U.S. defense contractor (19%), and all other customers (9%).

 

Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of January 2, 2022, the Richardson facility operated with 47 full time equivalent employees in a single shift operation. Optex Systems, Richardson serves as the home office for both the Optex Systems and Applied Optics Center segments.

 

Applied Optics Center (AOC) – Dallas, Texas

 

The Applied Optics Center serves primarily domestic U.S. customers. Sales to commercial customers represent approximately 48% and military sales to prime and subcontracted customers represent approximately 52% of the external segment revenue. Approximately 93% of the AOC revenue is derived from external customers and approximately 7% is related to intersegment sales to Optex Systems in support of military contracts. For the three months ended January 2, 2022, AOC represented 57% of the Company’s total consolidated revenue and consisted of three major defense contractors (8%, 6% and 6%), one commercial customer (26%), and all other customers (11%).

 

The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space. As of January 2, 2022, AOC operated with 40 full time equivalent employees in a single shift operation.

 

The financial tables below present information on the reportable segments’ profit or loss for each period, as well as segment assets as of each period end The Company does not allocate interest expense, income taxes or unusual items to segments.

 

    Reportable Segment Financial Information
(thousands)		  
    As of and for the three months ended January 2, 2022  
    Optex Systems
Richardson		     Applied Optics Center
Dallas		     Other
(non-allocated costs and intersegment eliminations)		     Consolidated
Total		  
                         
Revenues from external customers   $ 1,857     $ 2,483     $ -     $ 4,340  
Intersegment revenues     -       180       (180 )     -  
Total Revenue   $ 1,857     $ 2,663     $ (180 )   $ 4,340  
                                 
Depreciation and Amortization   $ 10     $ 62     $ -     $ 72  
                                 
Income (loss) before taxes   $ (216 )   $ 288     $ (57 )   $ 15  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (236 )   $ 236     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 57     $ 57  
Warranty expense   $ -     $ 46     $ -     $ 46  
                                 
Segment Assets   $ 14,267     $ 7,088     $ -     $ 21,355  
Expenditures for segment assets   $ 25     $ 65     $ -     $ 90  

 

 

    Reportable Segment Financial Information
(thousands)		  
    As of and for the three months ended December 27, 2020  
    Optex Systems
Richardson		     Applied Optics Center
Dallas		     Other
(non-allocated costs and intersegment eliminations)		     Consolidated
Total		  
                         
Revenues from external customers   $ 3,029     $ 1,442     $ -     $ 4,471  
Intersegment revenues     -       366       (366 )     -  
Total Revenue   $ 3,029     $ 1,808     $ (366 )   $ 4,471  
                                 
Interest expense   $ -     $ -     $ 3     $ 3  
                                 
Depreciation and Amortization   $ 11     $ 52     $ -     $ 63  
                                 
Income (loss) before taxes   $ 213     $ (77 )   $ 967     $ 1,103  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (200 )   $ 200     $ -     $ -  
Gain on change in fair value of warrants   $ -     $ -     $ (1,027 )   $ (1,027 )
Stock compensation expense   $ -     $ -     $ 57     $ 57  
Warranty expense   $ -     $ 9     $ -     $ 9  
                                 
Segment Assets   $ 13,985     $ 5,865     $ -     $ 19,850  
Expenditures for segment assets   $ 20     $ 61     $ -     $ 81