Optex Systems Holdings, Inc. Announces Financial Highlights for the Three and Nine months Ended June 30, 2024

RICHARDSON, TX / ACCESSWIRE / August 13, 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 three and nine months ended June 30, 2024.

Danny Schoening, CEO of Optex Systems Holdings, Inc., commented, "It was an excellent quarter across the board. With supply chain constraints easing, automation efforts coming on line, and more appropriate staffing levels, we are shipping product at an increased velocity. I can't say enough about our employees' willingness to put in the extra effort to meet our customer's demands. Our products are mission critical and we thank the entire Optex team for their dedication."

Backlog as of June 30, 2024 was $45.6 million. This compares to a backlog of $41.8 million as of October 1, 2023, representing an increase of $3.8 million, or 9.1%, and a backlog of $41.6 million as of July 2, 2023, representing an increase of $4.0 million, or 9.6%.

For the three months ended June 30, 2024, our total revenues increased by $1.9 million, or 26.3%, compared to the prior year period. The increase in revenue was primarily driven by increased deliveries at both the Optex Richardson segment of $1.6 million and the Applied Optics Center segment of $0.3 million. For the nine months ended June 30, 2024, our total revenues increased by $7.0 million, or 39.6%, compared to the prior year period. The increase in revenue was primarily driven by increased deliveries at both the Optex Richardson segment of $4.6 million and the Applied Optics Center segment of $2.4 million. The increase in revenue for the three and nine-month periods were driven by increased customer demand for military products across both operating segments partially offset by lower customer demand in commercial optical assemblies at the Applied Optics Center.

Consolidated gross profit for the three months ended June 30, 2024 increased by $1.2 million, or 68.3%, compared to the prior year period. Consolidated gross profit for the nine months ended June 30, 2024 increased by $3.1 million, or 78.8%, compared to the prior year period. The increase in the most recent three and nine-month period gross margin was primarily attributable to higher revenue spread across a fixed manufacturing cost base combined with changes in product mix and improved pricing and operating performance in both operating segments.

Our operating income for the three months ended June 30, 2024 increased by $0.9 million, or 114.8%, compared to the prior year period. Our operating income for the nine months ended June 30, 2024 increased by $2.4 million, or 224.4%, compared to the prior year period. The increase in operating income for the three and nine-month periods was primarily driven by higher revenue and increased gross margin at both operating segments.

As of June 30, 2024, the Company had working capital of $14.2 million, as compared to $13.5 million as of October 1, 2023. During the nine months ended June 30, 2024, the Company had operating cash provided by operations of $1.0 million, and spent $0.5 million on acquisitions of property and equipment and $1.0 million on the acquisition of intellectual property. During the period, our inventory increased $3.0 million in support of new program awards and increasing revenues anticipated over the next twelve months.

At June 30, 2024, the Company had $0.5 million in cash and an outstanding payable balance of $1.0 million against its line of credit. At June 30, 2024, our outstanding accounts receivable balance was $3.3 million.

Our key performance measures for the three and nine months ended June 30, 2024 and July 2, 2023 are summarized below.

During the nine months ended June 30, 2024, the Company booked $28.3 million in new orders, representing a 7.6% increase over the prior year period. The orders for the most recently completed nine months consist of $18.5 million for our Optex Richardson segment and $9.8 million attributable to the Applied Optics Center segment.

The table below summarizes our three and nine-month operating results for the periods ended June 30, 2024 and July 2, 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.

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.

Our net income increased by $0.7 million to $1.3 million for the three months ended June 30, 2024, as compared to net income of $0.6 million for the prior year period. Our adjusted EBITDA increased by $0.9 million to $1.8 million for the three months ended June 30, 2024, as compared to $0.9 million for the prior year period. Our net income increased by $1.9 million to $2.8 million for the nine months ended June 30, 2024, as compared to a net income of $0.8 million for the prior year period. Our adjusted EBITDA increased by $2.7 million to $4.2 million for the nine months ended June 30, 2024, as compared to $1.5 million for the prior year period. The increase in the most recent three and nine-month period net income and adjusted EBITDA is primarily driven by increased revenue and gross profit, which was only partially offset by increased general and administrative expenses.

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 Quarterly Report on Form 10-Q for the three and nine months ended June 30, 2024 filed with the SEC on August 13, 2024.

Optex Systems Holdings, Inc.
Condensed Consolidated Balance Sheets