Quarterly report [Sections 13 or 15(d)]

Segment Reporting

v3.25.4
Segment Reporting
 3 Months Ended
Dec. 28, 2025
Segment Reporting [Abstract]  
Segment Reporting

Note 3 - Segment Reporting

 

The Company’s two reportable segments, Applied Optics Center (“Applied Optex 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 includes 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 segment revenue, cost of sales and net operating income to assess the Company’s performance and allocation of resources. For the periods ended December 20, 2025 and three months ended December 29, 2024, the Company’s CODM was Danny Schoening, CEO. Danny Schoening resigned his position as CEO effective as of December 20, 2025, at which time Chad George assumed the position of CEO and CODM.

 

A summary of segment performance for the three months ended December 28, 2025 and December 29, 2024 is included in the table below:

 

                                 
    (Thousands)  
    Three months ended  
    December 28, 2025     December 29, 2024  
   

Optex

Richardson

    

Applied Optics Center

Dallas

   

Other

(non-allocated costs and eliminations)

     Consolidated    

Optex

Richardson

    

Applied Optics Center

Dallas

    

Other

(non-allocated costs and eliminations)

     Consolidated  
                                                 
Revenue from External Customers   $ 5,325       3,820       -       9,145     $ 3,415       4,783       -       8,198  
Intersegment Revenues     -       217       (217 )     -       -       271       (271 )     -  
Total Segment Revenue     5,325       4,037       (217 )     9,145       3,415       5,054       (271 )     8,198  
                                                                 
Total Cost of Sales     3,992       3,274       (217 )     7,049       3,088       3,253       (271 )     6,070  
                                                                 
Gross Profit     1,333       763       -       2,096       327       1,801       -       2,128  
Gross Margin %     25.0 %     18.9 %     -       22.9 %     9.6 %     35.6 %     -       26.0 %
                                                                 
General and Administrative Expense     1,355       380       212       1,947       940       180       92       1,212  
Segment Allocated G&A Expense     (415 )     415       -       -       (328 )     328       -       -  
Net General & Administrative Expense     940       795       212       1,947       612       508       92       1,212  
                                                                 
Operating Income (Loss)     393       (32 )     (212 )     149       (285 )     1,293       (92 )     916  
Operating Income (Loss) %     7.4 %     (0.8 )%     -       1.6 %     (8.3 )%     25.6 %     -       11.2 %
                                                                 

Interest Income (Expense)

     -       -       48       48       -       -       (13 )     (13 )
                                                                 
Income (Loss) before taxes   $ 393       (32 )     (164 )    

197

       (285 )     1,293       (105 )     903  
Income (Loss) before taxes %     7.4 %     (0.8 )%     -       2.2 %     (8.3 )%     25.6 %     -       11.0 %

 

 

Optex Richardson (OPX) – Richardson, Texas

 

Optex Richardson revenues are primarily in support of prime and subcontracted military customers. Approximately 94% of the Optex Richardson segment revenue is comprised of domestic military customers, and 6% is comprised of foreign military customers. For the three months ended December 28, 2025, Optex Richardson represented 58% of the Company’s total consolidated revenue and consisted of revenue from the U.S. Government (17%), and three major U.S. defense contractors representing 17%, 14% and 6%, 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 December 28, 2025, the Richardson facility operated with 91 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 – Dallas, Texas

 

The Applied Optics Center serves primarily domestic U.S. customers. Sales to commercial customers represent 3% and military sales to prime and subcontracted customers represent 97% of the total segment revenue for the three months ended December 28, 2025. 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 three months ended December 28, 2025, AOC represented 42% of the Company’s total consolidated revenue and consisted of revenue from four major defense contractors representing 12%, 7%, 6% and 5% 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 December 28, 2025, 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 December 28, 2025  
   

Optex Systems

Richardson

    Applied Optics Center Dallas    

Other

(non-allocated costs and intersegment eliminations)

   

Consolidated

Total

 
                         
Revenues from external customers   $ 5,325     $ 3,820     $ -     $ 9,145  
Intersegment revenues     -       217       (217 )     -  
Total revenue   $ 5,325     $ 4,037     $ (217 )   $ 9,145  
                                 
Depreciation and amortization   $ 34     $ 56     $ -     $ 90  
                                 
Interest income   $ -       -     $ (48 )   $ (48 )
                                 
Income (loss) before taxes   $ 393     $ (32 )   $ (164 )   $ 197  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (415 )   $ 415     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 212     $ 212  
Warranty expense   $ -     $ 6     $ -     $ 6  
                                 
Segment assets   $ 22,279     $ 7,932     $ -     $ 30,211  
Expenditures for segment assets   $ 24     $ 432     $ -     $ 456  

 

   

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