Optex Systems Holdings Reports 17.6% Revenue Increase to $8.2 Million

Optex Systems Holdings, Inc. reported a revenue of $8.2 million for the three months ending December 29, 2024, marking a 17.6% increase from $7.0 million in the same period last year. The company's gross profit also rose to $2.1 million, up from $1.7 million, resulting in a gross margin of 26%. Net income for the quarter was $844,000, compared to $431,000 in the prior year, leading to a basic earnings per share of $0.12, doubling the $0.06 reported in the previous year.

The financial results reflect significant operational changes, including a reduction in current liabilities from $4.9 million to $3.4 million, primarily due to the repayment of a credit facility. Additionally, the company’s cash and cash equivalents increased to $2.5 million from $1.0 million, indicating improved liquidity. The total assets decreased slightly from $25.5 million to $24.8 million, driven by a reduction in accounts receivable and other assets.

Strategically, Optex Systems continues to focus on its core military and defense markets, with approximately 94% of its revenue generated from domestic customers. The company operates two segments: Optex Systems in Richardson, Texas, and the Applied Optics Center in Dallas. The Richardson facility accounted for 42% of total revenue, while the Dallas facility contributed 58%. The company has maintained a workforce of 128 full-time equivalent employees, with 82 at the Richardson site and 46 at the Dallas site.

Operationally, the company has seen a shift in its customer base, with the U.S. government and major defense contractors representing a significant portion of its revenue. The Applied Optics Center reported strong performance, with sales to commercial customers making up 11% of its revenue. The company also noted a focus on managing contract loss reserves due to inflationary pressures affecting long-term contracts, which may impact future profitability.

Looking ahead, Optex Systems Holdings remains optimistic about its growth trajectory, particularly in the defense sector. The company plans to continue leveraging its existing contracts while exploring new opportunities in both domestic and international markets. Management indicated that they are committed to enhancing operational efficiencies and maintaining a strong balance sheet to support future growth initiatives.