Quarterly report [Sections 13 or 15(d)]

Segment Reporting

v3.26.1
Segment Reporting
 6 Months Ended
Mar. 29, 2026
Segment Reporting [Abstract]  
Segment Reporting

Note 3 - 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 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 Chief Executive Officer (“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 March 29, 2026 and March 30, 2025, the Company’s CODMs were Chad George and Danny Schoening, respectively. 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 and six months ended March 29, 2026 and March 30, 2025 is included in the tables below:

 

                                 
   

Results of Operations Selective Financial Information

(Thousands)

  
    Three months ended  
    March 29, 2026     March 30, 2025  
   

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   $ 6,245     $ 3,382     $  -     $ 9,627     $ 6,319     $ 4,411     $ -     $ 10,730  
Intersegment Revenue     -       369       (369 )     -       -       322       (322 )     -  
Total Segment Revenue     6,245       3,751       (369 )     9,627       6,319       4,733       (322 )     10,730  
                                                                 
Total Cost of Sales     4,291       2,313       (369 )      6,235       4,667       3,024       (322 )     7,369  
                                                                 
Gross Profit     1,954       1,438       -       3,392       1,652       1,709       -       3,361  
Gross Margin %     31.3 %     38.3 %     -       35.2 %     26.1 %     36.1 %     -       31.3 %
                                                                 
General and Administrative Expense     1,114       354       260       1,728       869       183       72       1,124  
Segment Allocated G&A Expense     (424 )     424       -       -       (328 )     328       -       -  
Net General & Administrative Expense     690       778       260       1,728       541       511       72       1,124  
                                                                 
Operating Income (Loss)     1,264       660       (260 )     1,664       1,111       1,198       (72 )     2,237  
Operating Income (Loss) %     20.2 %     17.6 %     -       17.3 %     17.6 %     25.3 %     -       20.8 %
                                                                 
Interest Income (Expense)     -       -       35       35       -       -       1       1  
                                                                 
Income (Loss) before taxes   $ 1,264       660       (225 )     1,699       1,111       1,198       (71 )     2,238  
Income (Loss) before taxes %     20.2 %     17.6 %     -       17.6 %     17.6 %     25.3 %     -       20.9 %

 

 

                                 
   

Results of Operations Selective Financial Information

(Thousands)

  
    Six months ended  
    March 29, 2026     March 30, 2025  
   

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   $ 11,570     $ 7,202     $             -     $ 18,772     $ 9,734     $ 9,194     $             -     $ 18,928  
Intersegment Revenue     -       586       (586 )     -       -       593       (593 )     -  
Total Segment Revenue     11,570       7,788       (586 )     18,772       9,734       9,787       (593 )     18,928  
                                                                 
Total Cost of Sales     8,282       5,588       (586 )     13,284       7,755       6,277       (593 )     13,439  
                                                                 
Gross Profit     3,288       2,200       -       5,488       1,979       3,510       -       5,489  
Gross Margin %     28.4 %     28.2 %     -       29.2 %     20.3 %     35.9 %     -       29.0 %
                                                                 
General and Administrative Expense     2,470       733       472       3,675       1,808       364       164       2,336  
Segment Allocated G&A Expense     (839 )     839       -       -       (655 )     655       -       -  
Net General & Administrative Expense     1,631       1,572       472       3,675       1,153       1,019       164       2,336  
                                                                 
Operating Income (Loss)     1,657       628       (472 )     1,813       826       2,491       (164 )     3,153  
Operating Income (Loss) %     14.3 %     8.1 %     -       9.7 %     8.5 %     25.5 %     -       16.7 %
                                                                 
Interest Income (Expense)     -       -       83       83       -       -       (12 )     (12 )
                                                                 
Income (Loss) before taxes   $ 1,657       628       (389 )     1,896       826       2,491       (176 )     3,141  
Income (Loss) before taxes %     14.3 %     8.1 %     -       10.1 %     8.5 %     25.5 %     -       16.6 %

 

Optex Richardson (OPX) – Richardson, Texas

 

Optex Richardson revenue is 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 six months ended March 29, 2026, Optex Richardson represented 62% of the Company’s total consolidated revenue and consisted of revenue from the U.S. Government (24%), and two major U.S. defense contractors (16% and 15%).

 

Optex Richardson is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of March 29, 2026, the Richardson facility operated with 90 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 8% and military sales to prime and subcontracted customers represent 92% of the total external segment revenue for the six months ended March 29, 2026. Approximately 92% of the AOC revenue was derived from external customers and approximately 8% was related to intersegment sales to Optex Richardson in support of military contracts. For the six months ended March 29, 2026, AOC represented 38% of the Company’s total consolidated revenue and consisted of revenue from three major defense contractors representing 11%, 7% 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 March 29, 2026, AOC operated with 44 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. A summary of segment performance for the three and six months ended March 29, 2026 and March 30, 2025 is included in the tables below:

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the three months ended March 29, 2026  
   

Optex

Richardson

    

Applied Optics

Center

Dallas

    

Other

(non-allocated

costs and

intersegment

eliminations)

     Consolidated
Total		  
                         
Revenue from external customers   $ 6,245     $ 3,382     $              -     $ 9,627  
Intersegment revenue     -       369       (369 )     -  
Total revenue   $ 6,245     $ 3,751     $ (369 )   $ 9,627  
                                 
Interest income   $ -     $ -     $ 35     $ 35  
                                 
Depreciation and amortization   $ 34     $ 63     $ -     $ 97  
                                 
Income before taxes   $ 1,264     $ 660     $ (225 )   $ 1,699  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (424 )   $ 424     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 260     $ 260  
Warranty expense   $ -     $ (143 )   $ -     $ (143 )
                                 
Segment assets   $ 22,484     $ 8,376     $ -     $ 30,860  
Expenditures for segment assets   $ 294     $ 99     $ -     $ 393  

 

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the three months ended March 30, 2025  
   

Optex

Richardson

    

Applied Optics

Center

Dallas

    

Other

(non-allocated

costs and

intersegment

eliminations)

     Consolidated
Total		  
                         
Revenue from external customers   $ 6,319     $ 4,411     $                  -     $ 10,730  
Intersegment revenue     -       322       (322 )     -  
Total revenue   $ 6,319     $ 4,733     $ (322 )   $ 10,730  
                                 
Interest income   $ -     $ -     $ 1     $ 1  
                                 
Depreciation and amortization   $ 67     $ 59     $ -     $ 126  
                                 
Income before taxes   $ 1,111     $ 1,198     $ (71 )   $ 2,238  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (328 )   $ 328     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 72     $ 72  
Warranty expense   $ -     $ 84     $ -     $ 84  
                                 
Segment assets   $ 19,313     $ 8,164     $ -     $ 27,477  
Expenditures for segment assets   $ 134     $ -     $ -     $ 134  

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the six months ended March 29, 2026  
   

Optex

Richardson

    

Applied Optics

Center

Dallas

    

Other

(non-allocated

costs and

intersegment

eliminations)

     Consolidated
Total		  
                         
Revenue from external customers   $ 11,570     $ 7,202     $                -     $ 18,772  
Intersegment revenue     -       586       (586 )     -  
Total revenue   $ 11,570     $ 7,788     $ (586 )   $ 18,772  
                                 
Interest income   $ -     $ -     $ 83     $ 83  
                                 
Depreciation and amortization   $ 68     $ 119     $ -     $ 187  
                                 
Income before taxes   $ 1,657     $ 628     $ (389 )   $ 1,896  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (839 )   $ 839     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 472     $ 472  
Warranty expense   $ -     $ (137 )   $ -     $ (137 )
                                 
Segment assets   $ 22,484     $ 8,376     $ -     $ 30,860  
Expenditures for segment assets   $ 318     $ 531     $ -     $ 849  

 

 

   

Reportable Segment Financial Information

(thousands)

  
    As of and for the six months ended March 30, 2025  
   

Optex

Richardson

    

Applied Optics

Center

Dallas

    

Other

(non-allocated

costs and

intersegment

eliminations)

     Consolidated
Total		  
                         
Revenue from external customers   $ 9,734     $ 9,194     $                -     $ 18,928  
Intersegment revenue     -       593       (593 )     -  
Total revenue   $ 9,734     $ 9,787     $ (593 )   $ 18,928  
                                 
Interest expense   $ -     $ -     $ (12 )   $ (12 )
                                 
Depreciation and amortization   $ 131     $ 124     $ -     $ 255  
                                 
Income before taxes   $ 826     $ 2,491     $ (176 )   $ 3,141  
                                 
Other significant noncash items:                                
Allocated home office expense   $ (655 )   $ 655     $ -     $ -  
Stock compensation expense   $ -     $ -     $ 164     $ 164  
Warranty expense   $ -     $ 54     $ -     $ 54  
                                 
Segment assets   $ 19,313     $ 8,164     $ -     $ 27,477  
Expenditures for segment assets   $ 218     $ 245     $ -     $ 463