Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.24.2.u1
Segment Reporting
 9 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Segment Reporting

Note 3 - Segment Reporting

 

The Company’s two reportable segments, Applied Optics Center and Optex Richardson, 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 Richardson 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 Richardson – Richardson, Texas

 

Optex Richardson revenues are primarily in support of prime and subcontracted military customers. Military sales to prime and subcontracted customers represented approximately 98% and sales to commercial customers represented approximately 2% of the external segment revenue for the nine months ended June 30, 2024. The Optex Richardson segment revenue is comprised of approximately 85% domestic military customers and 13% foreign military customers. For the nine months ended June 30, 2024, Optex Richardson represented 50% of the Company’s total consolidated revenue and consisted of revenue from the U.S. government (14%), one major U.S. defense contractor (21%) and all other customers (15%).

 

Optex Richardson is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of June 30, 2024, the Richardson facility operated with 77 full-time equivalent employees in a single shift operation which includes 8 home office support employees. The facilities at Optex Richardson serve as the home office for both the Optex Richardson 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 29% and military sales to prime and subcontracted customers represented approximately 71% of the external segment revenue for the nine months ended June 30, 2024. Approximately 95% of the AOC revenue was derived from external customers and approximately 5% was related to intersegment sales to Optex Richardson in support of military contracts. For the nine months ended June 30, 2024, AOC represented 50% of the Company’s total consolidated revenue and consisted of revenue from the U.S government (5%), two major defense contractor (8% and 7%), one commercial customer (14%), and all other customers (16%).

 

The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space. As of June 30, 2024, 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 June 30, 2024  
   

Optex

Richardson

   

Applied Optics Center

Dallas

   

Other

(non-allocated costs and intersegment eliminations)

   

Consolidated

Total

 
                         
Revenues from external customers   $ 4,675     $ 4,385     $ -     $ 9,060  
Intersegment revenues     -       282       (282 )     -  
Total revenue   $ 4,675     $ 4,667     $ (282 )   $ 9,060  
                                 
Interest expense   $ -     $ -     $ 17     $ 17  
                                 
Depreciation and amortization   $ 54     $ 78     $ -     $ 132  
                                 
Income (loss) before taxes   $ 442     $ 1,263     $ (107 )   $ 1,598  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (339 )   $ 339     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 90     $ 90  
(Reversal of) Warranty expense   $ -     $ (18 )   $ -     $ (18 )
                                 
Segment assets   $ 16,449     $ 8,413     $ -     $ 24,862  
Expenditures for segment assets   $ 159     $ 147     $ -     $ 306  

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the three months ended July 2, 2023  
   

Optex Systems

Richardson

   

Applied Optics Center

Dallas

   

Other

(non-allocated costs and intersegment eliminations)

   

Consolidated

Total

 
                         
Revenues from external customers   $ 3,069     $ 4,103     $ -     $ 7,172  
Intersegment revenues     -       265       (265 )     -  
Total revenue   $ 3,069     $ 4,368     $ (265 )   $ 7,172  
                                 
Interest expense   $ -     $ -     $ 22     $ 22  
                                 
Depreciation and amortization   $ 14     $ 72     $ -     $ 86  
                                 
Income (loss) before taxes   $ (60 )   $ 893     $ (103 )   $ 730  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (386 )   $ 386     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 81     $ 81  
Warranty expense   $ -     $ 57     $ -     $ 57  
                                 
Segment assets   $ 11,671     $ 9,293     $ -     $ 20,964  
Expenditures for segment assets   $ -     $ 222     $ -     $ 222  

 

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the nine months ended June 30, 2024  
    Optex Richardson    

Applied Optics Center

Dallas

   

Other

(non-allocated costs and intersegment eliminations)

   

Consolidated

Total

 
                         
Revenues from external customers   $ 12,344     $ 12,208     $ -     $ 24,552  
Intersegment revenues     -       700       (700 )     -  
Total revenue   $ 12,344     $ 12,908     $ (700 )   $ 24,552  
                                 
Interest expense   $ -     $ -     $ 32     $ 32  
                                 
Depreciation and amortization   $ 103     $ 238     $ -     $ 341  
                                 
Income (loss) before taxes   $ 850     $ 3,033     $ (392 )   $ 3,491  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (1,019 )   $ 1,019     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 360     $ 360  
Warranty expense   $ 17     $ (4 )   $ -     $ 13  
                                 
Segment assets   $ 16,449     $ 8,413     $ -     $ 24,862  
Expenditures for segment assets   $ 1,331     $ 172     $ -     $ 1,503  

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the nine months ended July 2, 2023  
    Optex Richardson    

Applied Optics Center

Dallas

   

Other

(non-allocated costs and intersegment eliminations)

   

Consolidated

Total

 
                         
Revenues from external customers   $ 7,742     $ 9,840     $ -     $ 17,582  
Intersegment revenues     -       511       (511 )     -  
Total revenue   $ 7,742     $ 10,351     $ (511 )   $ 17,582  
                                 
Interest expense   $ -     $ -     $ 31     $ 31  
                                 
Depreciation and amortization   $ 38     $ 214     $ -     $ 252  
                                 
Income (loss) before taxes   $ (527 )   $ 1,747     $ (165 )   $ 1,055  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (978 )   $ 978     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 134     $ 134  
Warranty expense   $ -     $ 171     $ -     $ 171  
                                 
Segment assets   $ 11,671     $ 9,293     $ -     $ 20,964  
Expenditures for segment assets   $ 25     $ 343     $ -     $ 368