Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.25.0.1
Segment Reporting
 3 Months Ended
Dec. 29, 2024
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 100% and sales to commercial customers represented less than 1% of the external segment revenue for the three months ended December 29, 2024. The Optex Systems segment revenue is comprised of approximately 86% domestic military customers and 14% foreign military customers. For the three months ended December 29, 2024, Optex Systems represented 42% of the Company’s total consolidated revenue and consisted of revenue from one major defense contractor (13%), the U.S. Government (19%) and all other customers (10%).

 

Optex Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of December 29, 2024, the Richardson facility operated with 82 full time equivalent employees in a single shift operation which includes 8 home office support employees. 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 11% and military sales to prime and subcontracted customers represented approximately 89% of the external segment revenue for the three months ended December 29, 2024. Approximately 95% of the AOC revenue was derived from external customers and approximately 5% was related to intersegment sales to Optex Systems in support of military contracts. For the three months ended December 29, 2024, AOC represented 58% of the Company’s total consolidated revenue and consisted of revenue from five major defense contractors (9%, 8%, 7%, 6% and 5%), the U.S. Government (6%), one commercial customer (6%), 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 December 29, 2024, AOC operated with 46 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 December 29, 2024  
    Optex Systems Richardson     Applied Optics Center Dallas     Other (non-allocated costs and intersegment eliminations)     Consolidated Total  
                         
Revenues from external customers   $ 3,415     $ 4,783     $           -     $ 8,198  
Intersegment revenues     -       271       (271 )     -  
Total revenue   $ 3,415     $ 5,054     $ (271 )   $ 8,198  
                                 
Depreciation and amortization   $ 64     $ 65     $ -     $ 129  
                                 
Interest Expense     -       -     $ 13     $ 13  
                                 
Income (loss) before taxes   $ (285 )   $ 1,293     $ (105 )   $ 903  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (328 )   $ 328     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 92     $ 92  
Warranty expense   $ -     $ (30 )   $ -     $ (30 )
                           
Segment assets   $ 16,881     $ 7,925     $ -     $ 24,806  
Expenditures for segment assets   $ 74     $ 245     $ -     $ 319  

 

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the three months ended December 31, 2023  
   

Optex Systems

Richardson

   

Applied Optics Center Dallas

   

Other

(non-allocated costs and intersegment eliminations)

   

Consolidated

Total

 
                         
Revenues from external customers   $ 3,394     $ 3,574     $ -     $ 6,968  
Intersegment revenues     -       187       (187 )     -  
Total revenue   $ 3,394     $ 3,761     $ (187 )   $ 6,968  
                                 
Depreciation and amortization   $ 10     $ 82     $ -     $ 92  
                                 
Interest expense   $ -       -     $ 7     $ 7  
                                 
Income (loss) before taxes   $ 15     $ 651     $ (120 )   $ 546  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (343 )   $ 343     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 113     $ 113  
Warranty expense   $ -     $ 5     $ -     $ 5  
                                 
Segment assets   $ 14,336     $ 8,053     $ -     $ 22,389  
Expenditures for segment assets   $ 33     $ 25     $ -     $ 58