Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.23.1
Segment Reporting
 6 Months Ended
Apr. 02, 2023
Segment Reporting [Abstract]  
Segment Reporting

Note 3 - Segment Reporting

 

The Company’s two reportable segments, Applied Optics Center and Optex Systems – Richardson (“Optex Systems”), are strategic businesses offering similar products to similar markets and customers; however, they 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 management at the time of the acquisition was retained.

 

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 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

 

Optex Systems revenues are primarily in support of prime and subcontracted military customers. Military sales to prime and subcontracted customers represented approximately 94% and sales to commercial customers represented approximately 6% of the external segment revenue for the six months ended April 2, 2023. The Optex Systems segment revenue is comprised of approximately 85% domestic military customers and 9% foreign military customers. For the six months ended April 2, 2023, Optex Systems – Richardson represented 45% of the Company’s total consolidated revenue and consisted of revenue from the U.S. government (17%), one major U.S. defense contractor (13%), and all other customers (15%).

 

Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of April 2, 2023, the Richardson facility operated with 52 full time equivalent employees in a single shift operation. The facilities at Optex Systems, Richardson serve 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 represented approximately 59% and military sales to prime and subcontracted customers represented approximately 41% of the external segment revenue for the six months ended April 2, 2023. Approximately 96% of the AOC revenue was derived from external customers and approximately 4% was related to intersegment sales to Optex Systems in support of military contracts. For the six months ended April 2, 2023, AOC represented 55% of the Company’s total consolidated revenue and consisted of revenue from one major defense contractor (5%), one commercial customer (31%), and all other customers (19%).

 

The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space. As of April 2, 2023, AOC operated with 45 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 April 2, 2023  
    Optex Systems
Richardson		     Applied Optics Center
Dallas		     Other
(non-allocated costs and intersegment eliminations)		     Consolidated
Total		  
                         
Revenues from external customers   $ 3,053     $ 3,317     $ -     $ 6,370  
Intersegment revenues     -       130       (130 )     -  
Total revenue   $ 3,053     $ 3,447     $ (130 )   $ 6,370  
                                 
Interest expense   $ -     $ -     $ 8     $ 8  
                                 
Depreciation and amortization   $ 13     $ 72     $ -     $ 85  
                                 
Income (loss) before taxes   $ (45 )   $ 677     $ (25 )   $ 607  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (312 )   $ 312     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 17     $ 17  
Warranty expense   $ -     $ 53     $ -     $ 53  
                                 
Segment assets   $ 11,283     $ 8,567     $ -     $ 19,850  
Expenditures for segment assets   $ 25     $ 31     $ -     $ 56  

 

 

    Reportable Segment Financial Information
(thousands)		  
    As of and for the three months ended April 3, 2022  
    Optex Systems
Richardson		     Applied Optics Center
Dallas		     Other
(non-allocated costs and intersegment eliminations)		     Consolidated
Total		  
                         
Revenues from external customers   $ 2,078     $ 3,058     $ -     $ 5,136  
Intersegment revenues     -       255       (255 )     -  
Total revenue   $ 2,078     $ 3,313     $ (255 )   $ 5,136  
                                 
Interest expense   $ -     $ -     $ -     $ -  
                                 
Depreciation and amortization   $ 10     $ 65     $ -     $ 75  
                                 
Income (loss) before taxes   $ (243 )   $ 87     $ (35 )   $ (191 )
                                 
Other significant noncash items:                                
Allocated home office expense   $ (298 )   $ 298     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 35     $ 35  
Warranty expense   $ -     $ 33     $ -     $ 33  
                                 
Segment assets   $ 14,457     $ 6,777     $ -     $ 21,234  
Expenditures for segment assets   $ (19 )   $ 47     $ -     $ 28  

 

    Reportable Segment Financial Information
(thousands)		  
    As of and for the six months ended April 2, 2023  
    Optex Systems
Richardson		     Applied Optics Center
Dallas		     Other
(non-allocated costs and intersegment eliminations)		     Consolidated
Total		  
                         
Revenues from external customers   $ 4,672     $ 5,738     $ -     $ 10,410  
Intersegment revenues     -       245       (245 )     -  
Total revenue   $ 4,672     $ 5,983     $ (245 )   $ 10,410  
                                 
Interest expense   $ -     $ -     $ 8     $ 8  
                                 
Depreciation and amortization   $ 24     $ 142     $ -     $ 166  
                                 
Income (loss) before taxes   $ (468 )   $ 854     $ (61 )   $ 325  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (592 )   $ 592     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 53     $ 53  
Warranty expense   $ -     $ 113     $ -     $ 113  
                                 
Segment assets   $ 11,283     $ 8,567     $ -     $ 19,850  
Expenditures for segment assets   $ 25     $ 121     $ -     $ 146  

 

 

   

 

Reportable Segment Financial Information
(thousands)

  
    As of and for the six months ended April 3, 2022  
    Optex Systems
Richardson		     Applied Optics Center
Dallas		     Other
(non-allocated costs and intersegment eliminations)		     Consolidated
Total		  
                         
Revenues from external customers   $ 3,934     $ 5,541     $ -     $ 9,475  
Intersegment revenues     -       435       (435 )     -  
Total revenue   $ 3,934     $ 5,976     $ (435 )   $ 9,475  
                                 
Interest expense   $ -     $ -     $ -     $ -  
                                 
Depreciation and amortization   $ 20     $ 127     $ -     $ 147  
                                 
Income (loss) before taxes   $ (460 )   $ 376     $ (92 )   $ (176 )
                                 
Other significant noncash items:                                
Allocated home office expense   $ (534 )   $ 534     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 92     $ 92  
Warranty expense   $ -     $ 79     $ -     $ 79  
                                 
Segment assets   $ 14,457     $ 6,777     $ -     $ 21,234  
Expenditures for segment assets   $ 6     $ 112     $ -     $ 118