Annual report [Section 13 and 15(d), not S-K Item 405]

Segment Reporting

v3.25.3
Segment Reporting
 12 Months Ended
Sep. 28, 2025
Segment Reporting [Abstract]  
Segment Reporting

Note 4 — Segment Reporting

 

The Company’s two reportable segments, Applied Optics Center (“Applied Optics Center” or “AOC”) and Optex Systems – Richardson (“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 include segment direct manufacturing and general and administrative costs but exclude profits that would apply to third party external customers.

 

The Chief Operating Decision Maker (CODM), which is our CEO, uses the segment revenue, cost of sales and net operating income to assess the Company’s performance and allocation of resources. A summary of segment performance for the twelve months ended September 28, 2025 and September 29, 2024 is included in the table below:

 

                                 
    (Thousands)
Twelve months ended		  
    September 28, 2025     September 29, 2024  
   

Optex Systems

Richardson

    

Applied
Optics
Center

Dallas

    

Other

(non-
allocated
costs and
eliminations)

     Consolidated    

Optex Systems

Richardson

    

Applied Optics
Center

Dallas

    

Other

(non-
allocated
costs and
eliminations)

     Consolidated  
                                                 
Revenue from External Customers   $ 23,761     $ 17,576     $ -     $ 41,337     $ 18,171     $ 15,824     $ -     $ 33,995  
Intersegment Revenues     -       1,157       (1,157 )     -       -       1,042       (1,042 )     -  
Total Segment Revenue     23,761       18,733       (1,157 )     41,337       18,171       16,866       (1,042 )     33,995  
                                                                 
Total Cost of Sales     17,699       12,738       (1,157 )     29,280       14,401       11,107       (1,042 )     24,466  
                                                                 
Gross Profit     6,062       5,995       -       12,057       3,770       5,759       -       9,529  
Gross Margin %     25.5 %     32.0 %     -       29.2 %     20.7 %     34.1 %     -       28.0 %
                                                                 
General and Administrative Expense     3,771       771       383       4,925       3,630       653       425       4,708  
Segment Allocated G&A Expense     (1,356 )     1,356       -       -       (1,486 )     1,486       -       -  
Net General & Administrative Expense     2,415       2,127       383       4,925       2,144       2,139       425       4,708  
                                                                 
Operating Income (Loss)     3,647       3,868       (383 )     7,132       1,626       3,620       (425 )     4,821  
Operating Income (Loss) %     15.3 %     20.6 %     -       17.3 %     8.9 %     21.5 %     -       14.2 %
                                                                 
Asset Impairment     (804 )     -       -       (804 )     -       -       -       -  
Interest Income (Expense)     -       -       23       23       -       -       (47 )     (47 )
                                                                 
Income (Loss) before taxes   $ 2,843       3,868       (360 )     6,351     $ 1,626       3,620       (472 )     4,774  
Income (loss) before taxes %     12.0 %     20.6 %     -       15.4 %     8.9 %     21.5 %     -       14.0 %

 

Optex Systems (OPX) – Richardson, Texas

 

Optex Richardson revenues are primarily in support of prime and subcontracted military customers. Approximately 90% of the Optex Richardson segment revenue is comprised of domestic military customers, and 10% is comprised of foreign military customers. For the twelve months ended September 28, 2025, Optex Richardson represented 58% of the Company’s total consolidated revenue and consisted of the U.S. government, 22%, and two major U.S. defense contractors representing 15% and 10%, of the Company’s consolidated revenue, respectively.

 

Optex Richardson is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of September 28, 2025, the Richardson facility operated with 87 full-time equivalent employees in a single shift operation. 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 represent 10% and military sales to prime and subcontracted customers represent 90% 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 Richardson in support of military contracts. For the twelve months ended September 28, 2025, AOC represented 42% of the Company’s total consolidated revenue and consisted of revenue from the U.S. government, 5%, 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 28, 2025, AOC operated with 45 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 28, 2025  
   

Optex

Systems

Richardson

    

Applied

Optics

Center

Dallas

    

Other

(non-allocated
costs and
intersegment
eliminations)

    

Consolidated

Total

  
                         
Revenues from external customers   $ 23,761     $ 17,576     $ -     $ 41,337  
Intersegment revenues     -       1,157       (1,157 )     -  
Total Revenue     23,761       18,733       (1,157 )     41,337  
                                 
Interest income     -       -       (23 )     (23 )
                                 
Depreciation and Amortization     276       239       -       515  
                                 
Income (loss) before taxes     2,843       3,868       (360 )     6,351  
                                 
Other significant noncash items:                                
Allocated home office expense     (1,356 )     1,356       -       -  
Stock compensation expense     -       -       383       383  
Warranty expense     -       110       -       110  
                                 
Segment Assets     22,126       7,930       -       30,056  
Expenditures for segment assets     259       245       -       504  

 

   

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