| Segment Reporting |
Note
3 - 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.
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
The
Optex Systems segment revenue is comprised of approximately 84% domestic military customers and 16% foreign military customers. For the
six months ended April 3, 2022, Optex Systems – Richardson represented 42% of the Company’s total consolidated revenue and
consisted of the U.S. government (13%), two major U.S. defense contractors, (7%) and (6%), and all other customers (16%).
Optex
Systems is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of April 3, 2022, the
Richardson facility operated with 47 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 approximately 37% and military
sales to prime and subcontracted customers represent approximately 63% of the external segment revenue. Approximately 93% of the AOC
revenue is derived from external customers and approximately 7% is related to intersegment sales to Optex Systems in support of military
contracts. For the six months ended April 3, 2022, AOC represented 58% of the Company’s total consolidated revenue and consisted
of three major defense contractors (12%, 8% and 6%), one commercial customer (21%), 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
April 3, 2022, AOC operated with 36 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.
Schedule of Segment Reporting Information
| |
|
Reportable Segment Financial Information
(thousands) |
|
| |
|
As of and for the three
months ended April 3, 2022 |
|
| |
|
|
Optex
Systems
Richardson |
|
|
|
Applied Optics Center
Dallas |
|
|
|
Other
(non-allocated costs and intersegment eliminations) |
|
|
|
Consolidated
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers |
|
$ |
2,078 |
|
|
$ |
3,058 |
|
|
$ |
- |
|
|
$ |
5,136 |
|
| Intersegment revenues |
|
|
- |
|
|
|
255 |
|
|
|
(255 |
) |
|
|
- |
|
| Total revenue |
|
$ |
2,078 |
|
|
$ |
3,313 |
|
|
$ |
(255 |
) |
|
$ |
5,136 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
$ |
10 |
|
|
$ |
65 |
|
|
$ |
- |
|
|
$ |
75 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before taxes |
|
$ |
) |
|
$ |
|
|
$ |
) |
|
$ |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other significant noncash items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Allocated home office expense |
|
$ |
(298 |
) |
|
$ |
298 |
|
|
$ |
- |
|
|
$ |
- |
|
| Stock compensation expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
35 |
|
|
$ |
35 |
|
| Warranty expense |
|
$ |
- |
|
|
$ |
33 |
|
|
$ |
- |
|
|
$ |
33 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment assets |
|
$ |
14,457 |
|
|
$ |
6,777 |
|
|
$ |
- |
|
|
$ |
21,234 |
|
| Expenditures for segment assets |
|
$ |
(19 |
) |
|
$ |
47 |
|
|
$ |
- |
|
|
$ |
28 |
|
| |
|
Reportable Segment Financial Information
(thousands) |
|
| |
|
As of and for the three months
ended March 28, 2021 |
|
| |
|
|
Optex
Systems
Richardson |
|
|
|
Applied
Optics Center
Dallas |
|
|
|
Other
(non-allocated costs and intersegment eliminations) |
|
|
|
Consolidated
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers |
|
$ |
2,805 |
|
|
$ |
1,441 |
|
|
$ |
- |
|
|
$ |
4,246 |
|
| Intersegment revenues |
|
|
- |
|
|
|
530 |
|
|
|
(530 |
) |
|
|
- |
|
| Total revenue |
|
$ |
2,805 |
|
|
$ |
1,971 |
|
|
$ |
(530 |
) |
|
$ |
4,246 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2 |
|
|
$ |
2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
$ |
10 |
|
|
$ |
55 |
|
|
$ |
- |
|
|
$ |
65 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before taxes |
|
$ |
) |
|
$ |
|
|
$ |
) |
|
$ |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other significant noncash items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Allocated home office expense |
|
$ |
(153 |
) |
|
$ |
153 |
|
|
$ |
- |
|
|
$ |
- |
|
| Loss on change in fair value of warrants |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
169 |
|
|
$ |
169 |
|
| Stock compensation expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
57 |
|
|
$ |
57 |
|
| Warranty expense |
|
$ |
- |
|
|
$ |
39 |
|
|
$ |
- |
|
|
$ |
39 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment assets |
|
$ |
14,820 |
|
|
$ |
6,307 |
|
|
$ |
- |
|
|
$ |
21,127 |
|
| Expenditures for segment assets |
|
$ |
- |
|
|
$ |
47 |
|
|
$ |
- |
|
|
$ |
47 |
|
| |
|
Reportable Segment Financial Information
(thousands) |
|
| |
|
As of and for the six months
ended April 3, 2022 |
|
| |
|
|
Optex Systems
Richardson |
|
|
|
Applied Optics Center
Dallas |
|
|
|
Other
(non-allocated costs and intersegment eliminations) |
|
|
|
Consolidated
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers |
|
$ |
3,934 |
|
|
$ |
5,541 |
|
|
$ |
- |
|
|
$ |
9,475 |
|
| Intersegment revenues |
|
|
- |
|
|
|
435 |
|
|
|
(435 |
) |
|
|
- |
|
| Total revenue |
|
$ |
3,934 |
|
|
$ |
5,976 |
|
|
$ |
(435 |
) |
|
$ |
9,475 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
$ |
20 |
|
|
$ |
127 |
|
|
$ |
- |
|
|
$ |
147 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before taxes |
|
$ |
) |
|
$ |
|
|
$ |
) |
|
$ |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other significant noncash items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Allocated home office expense |
|
$ |
(534 |
) |
|
$ |
534 |
|
|
$ |
- |
|
|
$ |
- |
|
| Stock compensation expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
92 |
|
|
$ |
92 |
|
| Warranty expense |
|
$ |
- |
|
|
$ |
79 |
|
|
$ |
- |
|
|
$ |
79 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment assets |
|
$ |
14,457 |
|
|
$ |
6,777 |
|
|
$ |
- |
|
|
$ |
21,234 |
|
| Expenditures for segment assets |
|
$ |
6 |
|
|
$ |
112 |
|
|
$ |
- |
|
|
$ |
118 |
|
| |
|
Reportable Segment Financial Information
(thousands) |
|
| |
|
As of and for the six months
ended March 28, 2021 |
|
| |
|
|
Optex
Systems
Richardson |
|
|
|
Applied
Optics Center
Dallas |
|
|
|
Other
(non-allocated costs and intersegment eliminations) |
|
|
|
Consolidated
Total |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers |
|
$ |
5,833 |
|
|
$ |
2,884 |
|
|
$ |
- |
|
|
$ |
8,717 |
|
| Intersegment revenues |
|
|
- |
|
|
|
896 |
|
|
|
(896 |
) |
|
|
- |
|
| Total revenue |
|
$ |
5,833 |
|
|
$ |
3,780 |
|
|
$ |
(896 |
) |
|
$ |
8,717 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
5 |
|
|
$ |
5 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
$ |
21 |
|
|
$ |
107 |
|
|
$ |
- |
|
|
$ |
128 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before taxes |
|
$ |
|
|
$ |
) |
|
$ |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other significant noncash items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Allocated home office expense |
|
$ |
(353 |
) |
|
$ |
353 |
|
|
$ |
- |
|
|
$ |
- |
|
| Gain on change in fair value of warrants |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(858 |
) |
|
$ |
(858 |
) |
| Stock compensation expense |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
114 |
|
|
$ |
114 |
|
| Warranty expense |
|
$ |
- |
|
|
$ |
48 |
|
|
$ |
- |
|
|
$ |
48 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment assets |
|
$ |
14,820 |
|
|
$ |
6,307 |
|
|
$ |
- |
|
|
$ |
21,127 |
|
| Expenditures for segment assets |
|
$ |
20 |
|
|
$ |
108 |
|
|
$ |
- |
|
|
$ |
128 |
|
|