Optex Systems Holdings, Inc. Announces Financial Highlights for the Year Ended September 29, 2024
ACCESSWIRE
2024-12-19

RICHARDSON, TX / ACCESSWIRE / December 19, 2024 / Optex Systems Holdings, Inc. (Nasdaq:OPXS), a leading manufacturer of precision optical sighting systems for domestic and worldwide military and commercial applications, announced financial results for the year ended September 29, 2024.

Danny Schoening, CEO of Optex Systems Holdings, Inc., commented, "To build on last year's comments, this was again, another strong year for Optex. This was accomplished with multi-year wins on every major platform that we support. Laser Protected Periscopes, Laser Filter Units, Laser Interference Filters, M22 Binoculars, and other optical assemblies have filled our backlog and driven favorable factory leverage at both of our facilities. In addition, our suppliers have stepped up to the delivery challenges and we've selectively increased various internal bottlenecks to fuel the output. I would like to thank all of our employees, customers, and shareholders for their continued support in 2024 as we anticipate these trends to continue in 2025."

Backlog as of September 29, 2024 was $44.2 million. This compares to a backlog of $41.8 million as of October 1, 2023, representing an increase of $2.4 million, or 5.7%.

For the year ended September 29, 2024, our total revenues increased by $8.3 million, or 32.5%, compared to the prior year. The increase in revenue reflects increases at both the Optex Richardson segment of $6.1 million and the Applied Optics Center segment of $2.2 million. The increase in revenue was driven by increased customer demand for military products across both operating segments partially offset by lower customer demand in optical assemblies at the Applied Optics Center.

Gross profit increased $2.9 million, or 44.0%, and the gross margin percentage increased by 2.2 points from 25.8% in the 2023 fiscal year to 28.0% in the 2024 fiscal year. Optex Systems gross profit increased by $1.4 million and the gross margin percentage increased to 20.7% as compared to 19.7% in the prior year. Applied Optics Center gross profit increased by $1.5 million and the gross margin percentage increased to 34.1% as compared to 29.3% in the prior year. The increase in each segment and consolidated gross profit is primarily attributable to higher revenue and increased absorption of fixed cost.

Consolidated operating income increased by $2.0 million, or 73.0%, in the year ended September 29, 2024 to $4.8 million as compared to the prior year operating income of $2.8 million. Both operating segments realized an increase in operating income which is primarily attributable to higher revenue and gross profit, partially offset by increases in general and administrative costs.

As of September 29, 2024, Optex Systems Holdings had working capital of $15.1 million, as compared to $13.5 million as of October 1, 2023. During the twelve months ended September 29, 2024, we generated operating cash of $1.8 million, primarily driven by increased revenue and net income. For the twelve months ended September 29, 2024, there was no net change against the outstanding credit facility balance of $1.0 million.

At September 29, 2024, the Company had approximately $1.0 million in cash and an outstanding payable balance of $1.0 against its $3.0 million line of credit. As of September 29, 2024, our outstanding accounts receivable balance was $3.8 million, which has been collected during the first quarter of fiscal 2025. During the first quarter of 2025, we paid down our credit facility to zero.

Our key performance measures for year ended September 29, 2024 and October 1, 2023 are summarized below.

(Thousands)

Twelve months ended

Metric

Sept 29, 2024

Oct 1, 2023

% Change

Revenue

$

33,995

$

25,659

32.5

%

Gross Profit

$

9,529

$

6,619

44.0

%

Gross Margin %

28.0

%

25.8

%

8.5

%

Operating Income

$

4,821

$

2,787

73.0

%

Net Income

$

3,768

$

2,263

66.5

%

Adjusted EBITDA (non-GAAP)

$

5,733

$

3,379

69.7

%

During the twelve months ended September 29, 2024, the Company booked $36.4 million in new orders, representing a 5.2% increase from the prior year period orders of $34.6 million. The orders for the most recently completed twelve months consist of $23.5 million for our Optex Richardson segment and $12.9 million attributable to the Applied Optics Center segment.

The table below summarizes our twelve-month operating results for the periods ended September 29, 2024 and October 1, 2023, in terms of both the GAAP net income measure and the non-GAAP Adjusted EBITDA measure. We believe that including both measures allows the reader better to evaluate our overall performance.

(Thousands)
Twelve months ended

September 29, 2024

October 1, 2023

Net Income - GAAP

$

3,768

$

2,263

Add:

Federal Income Tax Expense

1,006

469

Depreciation & Amortization

487

345

Stock Compensation

425

247

Interest Expense

47

55

Adjusted EBITDA - Non GAAP

$

5,733

$

3,379

Adjusted EBITDA has limitations and should not be considered in isolation or a substitute for performance measures calculated under GAAP. This non-GAAP measure excludes certain cash expenses that we are obligated to make. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do or may not calculate it at all, which limits the usefulness of Adjusted EBITDA as a comparative measure.

During the year ended September 29, 2024, we recorded net income of $3.8 million as compared to net income of $2.3 million during the year ended October 1, 2023. The increase of net income of $1.5 million is primarily attributable to increased operating income of $2.0 million, offset by increased federal income taxes of ($0.5) million. Our Adjusted EBITDA increased by $2.3 million to $5.7 million during the twelve months ended September 29, 2024 as compared to $3.4 million during the twelve months ended October 1, 2023. The increase in EBITDA is primarily driven by increased net income, offset by increased taxes, depreciation and amortization, and stock compensation.

Highlights of the Consolidated and Segment Results of Operations have been prepared in accordance with GAAP. These financial highlights do not include all information and disclosures required in the consolidated financial statements and footnotes and should be read in conjunction with our Annual Report on Form 10-K for the twelve months ended September 29, 2024 filed with the SEC on December 19, 2024.

Optex Systems Holdings, Inc.
Consolidated Balance Sheets

(Thousands, except share and per share data)

September 29,
2024

October 1,
2023

ASSETS

Cash and Cash Equivalents

$

1,009

$

1,204

Accounts Receivable, Net

3,764

3,624

Inventory, Net

14,863

12,153

Contract Asset

219

336

Prepaid Expenses

217

219

Current Assets

20,072

17,536

Property and Equipment, Net

1,292

998

Other Assets

Deferred Tax Asset

947

922

Intangibles, net

951

-

Right-of-use Asset

2,233

2,740

Security Deposits

23

23

Other Assets

4,154

3,685

Total Assets

$

25,518

$

22,219

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts Payable

$

1,177

$

810

Credit Facility

1,000

-

Operating Lease Liability

638

620

Federal Income Taxes Payable

74

247

Accrued Expenses

1,258

1,265

Accrued Selling Expense

237

336

Accrued Warranty Costs

52

75

Contract Loss Reserves

259

243

Customer Advance Deposits

255

481

Current Liabilities

4,950

4,077

Other Liabilities

Credit Facility-Long Term

-

1,000

Operating Lease Liability, net of current portion

1,760

2,282

Other Liabilities

1,760

3,282

Total Liabilities

6,710

7,359

Commitments and Contingencies

-

-

Stockholders' Equity

more...
more...
more...
more...
more...
more...