Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.24.4
Segment Reporting
 12 Months Ended
Sep. 29, 2024
Segment Reporting [Abstract]  
Segment Reporting

Note 4 — 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. For both segments, the chief operating decision maker is Danny Schoening, CEO.

 

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

 

Optex Systems revenues are primarily in support of prime and subcontracted military customers. Approximately 88% of the Optex Systems segment revenue is comprised of domestic military customers, and 10% is comprised of foreign military customers and 2% is comprised of commercial customers. Optex Systems segment revenue is derived from the U.S. government, 15%, and two major U.S. defense contractors representing 22% and 7%, of the Company’s consolidated revenue, respectively.

 

Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of September 29, 2024, the Richardson facility operated with 81 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 27% and military sales to prime and subcontracted customers represent 73% of the total segment revenue. Approximately 94% of the AOC revenue is derived from external customers and approximately 6% is related to intersegment sales to Optex Systems in support of military contracts. For the twelve months ended September 29, 2024, the AOC segment revenue is derived from the U.S. government, 5%, one major commercial customer 12%, and two major defense contractors representing 6%, and 6% of the Company’s consolidated revenue, respectively.

 

The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space. As of September 29, 2024, AOC operated with 47 full time equivalent employees in a single shift operation.

 

The financial table below presents the information for each of the reportable segments profit or loss as well as segment assets for each year. The Company does not allocate interest expense, income taxes or unusual items to segments.

 

   

Reportable Segment Financial Information

(thousands)

  
    Twelve months ended September 29, 2024  
   

Optex

Systems

Richardson

    

Applied

Optics

Center

Dallas

    

Other

(non-allocated
costs and
intersegment
eliminations)

    

Consolidated

Total

  
                         
Revenues from external customers   $ 18,171     $ 15,824     $ -     $ 33,995  
Intersegment revenues     -       1,042       (1,042 )     -  
Total Revenue   $ 18,171     $ 16,866     $ (1,042 )   $ 33,995  
                                 
Interest expense   $ -     $ -     $ 47     $ 47  
                                 
Depreciation and Amortization   $ 167     $ 320     $ -     $ 487  
                                 
Income (loss) before taxes   $ 1,626     $ 3,620     $ (472 )   $ 4,774  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (1,486 )   $ 1,486     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 425     $ 425  
Warranty expense   $ 17     $ 12     $ -     $ 29  
                                 
Segment Assets   $ 17,038     $ 8,480     $ -     $ 25,518  
Expenditures for segment assets   $ 1,382     $ 349     $ -     $ 1,731  

 

 

   

Reportable Segment Financial Information

(thousands)

  
    Twelve months ended October 1, 2023  
   

Optex

Systems

Richardson

    

Applied

Optics

Center

Dallas

    

Other

(non-allocated
costs and
intersegment
eliminations)

    

Consolidated

Total

  
                         
Revenues from external customers   $ 12,120     $ 13,539     $ -     $ 25,659  
Intersegment revenues     -       893       (893 )     -  
Total Revenue   $ 12,120     $ 14,432     $ (893 )   $ 25,659  
                                 
Interest expense   $ -     $ -     $ 55     $ 55  
                                 
Depreciation and Amortization   $ 39     $ 306     $ -     $ 345  
                                 
Income (loss) before taxes   $ 608     $ 2,426     $ (302 )   $ 2,732  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (1,338 )   $ 1,338     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 247     $ 247  
Warranty expense   $ -     $ 39     $ -     $ 39  
                                 
Segment Assets   $ 14,043     $ 8,176     $ -     $ 22,219  
Expenditures for segment assets   $ 33     $ 343     $ -     $ 376