from Optex Systems Holdings, Inc. (NASDAQ:OPXS)
Optex Systems Holdings, Inc. Announces Financial Highlights for the Three Months Ended December 29, 2024
RICHARDSON, TX / ACCESS Newswire / February 10, 2025 / 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 months ended December 29, 2024.
Danny Schoening, CEO of Optex Systems Holdings, Inc., commented, "We are pleased that our 17.6% year-over-year increase in revenue helped the company deliver a 65.6% increase in operating profit for the first fiscal quarter of 2025. We expect that our strong backlog, as detailed in our 10-Q, should allow the company to deliver revenue in excess of $38 million for fiscal 2025. Over the last four-years we have delivered compounded annual revenue growth in excess of 20% per year, and our entire team is working hard to continue that momentum into the years ahead. We continue to work closely with our customers on their new designs while simultaneously working with their operations counterparts to meet their supply needs today. Profitable, sustainable growth continues to be our central focus."
Backlog as of December 29, 2024 was $42.0 million as compared to $45.0 million as of December 31, 2023, representing a decrease of 6.7%. The decrease in backlog is primarily attributed to the timing of customer orders. We are anticipating new orders in the near term, some of which will call for delivery in the current fiscal year.
For the three months ended December 29, 2024, our total revenues increased by $1.2 million, or 17.6%, compared to the prior year period. The increase in revenue was primarily driven by increased revenue on higher demand for periscopes, laser filters and day windows, partially offset by lower revenue in commercial optical assemblies and other products.
Consolidated gross profit for the three months ended December 29, 2024 increased by $0.4 million, or 26.4%, compared to the prior year period. Increased gross profit during the period was primarily driven by changes in product mix combined with higher revenue against a fixed cost base.
Our operating income for the three months ended December 29, 2024 increased by $0.4 million, or 65.6%, compared to the prior year period. The increase in operating income was primarily driven by revenue and gross profit growth, which outpaced increased general and administrative spending.
As of December 29, 2024, Optex Systems Holdings had working capital of $15.9 million, as compared to $15.1 million as of September 29, 2024. During the three months ended December 29, 2024, we generated operating cash of $2.8 million, primarily driven by higher net income and collections against accounts receivable. During the three months ended December 29, 2024, we paid $1.0 million against the credit facility, bringing the outstanding balance to zero.
At December 29, 2024, the company had approximately $2.5 million in cash and an accounts receivable balance of $1.7 million, which has been collected during the second quarter of fiscal 2025.
Our key performance measures for three months ended December 29, 2024 and December 31, 2023 are summarized below.
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Three months ended | ||||||||||||
Metric | Dec 29, 2024 | Dec 31, 2023 | % Change | |||||||||
Revenue | $ | 8,198 | $ | 6,968 | 17.7 | % | ||||||
Gross Profit | $ | 2,128 | $ | 1,684 | 26.4 | % | ||||||
Gross Margin % | 26.0 | % | 24.2 | % | 7.4 | % | ||||||
Operating Income | $ | 916 | $ | 553 | 65.6 | % | ||||||
Net Income | $ | 844 | $ | 431 | 95.8 | % | ||||||
Adjusted EBITDA (non-GAAP) | $ | 1,137 | $ | 758 | 50.0 | % | ||||||
The table below summarizes our three-month operating results for the periods ended December 29, 2024 and December 31, 2023, in terms of both GAAP net income and non-GAAP Adjusted EBITDA. We believe that including both measures allows the reader better to evaluate our overall performance.
(Thousands) Three months ended | ||||||||
December 29, 2024 | December 31, 2023 | |||||||
Net Income (GAAP) | $ | 844 | $ | 431 | ||||
Add: | ||||||||
Depreciation and Amortization | 129 | 92 | ||||||
Federal Income Tax Expense | 59 | 115 | ||||||
Stock Compensation | 92 | 113 | ||||||
Interest Expense | 13 | 7 | ||||||
Adjusted EBITDA - Non GAAP | $ | 1,137 | $ | 758 | ||||
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 $0.4 million to $0.8 million for the three months ended December 29, 2024, as compared to $0.4 million for the prior year period. Our adjusted EBITDA increased by $0.4 million to $1.1 million for the three months ended December 29, 2024, as compared to $0.8 million for the prior year period. The increase is primarily driven by higher revenue and gross profit.
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 10Q for the three months ended December 29, 2024 filed with the SEC on February 10, 2025.
Optex Systems Holdings, Inc.
Condensed Consolidated Balance Sheets
(Thousands, except share | ||||||||
(Unaudited) December 29, 2024 | September 29, 2024 | |||||||
ASSETS | ||||||||
Cash and Cash Equivalents | $ | 2,491 | $ | 1,009 | ||||
Accounts Receivable, Net | 1,734 | 3,764 | ||||||
Inventory, Net | 14,674 | 14,863 | ||||||
Contract Asset | 196 | 219 | ||||||
Prepaid Expenses | 265 | 217 | ||||||
Current Assets | 19,360 | 20,072 | ||||||
Property and Equipment, Net | 1,520 | 1,292 | ||||||
Other Assets | ||||||||
Deferred Tax Asset | 888 | 947 | ||||||
Intangibles, net | 912 | 951 | ||||||
Right-of-use Asset | 2,103 | 2,233 | ||||||
Security Deposits | 23 | 23 | ||||||
Other Assets | 3,926 | 4,154 | ||||||
Total Assets | $ | 24,806 | $ | 25,518 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts Payable | $ | 987 | $ | 1,177 | ||||
Credit Facility | - | 1,000 | ||||||
Operating Lease Liability | 643 | 638 | ||||||
Federal Income Taxes Payable | 74 | 74 | ||||||
Accrued Expenses | 1,065 | 1,258 | ||||||
Accrued Selling Expense | 224 | 237 | ||||||
Accrued Warranty Costs | 22 | 52 | ||||||
Contract Loss Reserves | 213 | 259 | ||||||
Customer Advance Deposits | 210 | 255 | ||||||
Current Liabilities | 3,438 | 4,950 | ||||||
Other Liabilities | ||||||||
Operating Lease Liability, net of current portion | 1,624 | 1,760 | ||||||
Other Liabilities | 1,624 | 1,760 | ||||||
Total Liabilities | 5,062 | 6,710 | ||||||
Commitments and Contingencies | - | - | ||||||
Stockholders' Equity | ||||||||
Common Stock - ($0.001 par, 2,000,000,000 authorized, 6,896,738 and 6,873,938 shares issued and outstanding, respectively) | 7 | 7 | ||||||
Additional Paid in Capital | 21,557 | 21,465 | ||||||
Accumulated Deficit | (1,820 | ) | (2,664 | |||||
Stockholders' Equity | 19,744 | 18,808 | ||||||
Total Liabilities and Stockholders' Equity | $ | 24,806 | $ | 25,518 | ||||
The accompanying notes in our Quarterly Report on Form 10Q for the three months ended December 29, 2024 filed with the SEC on February 10, 2025 are an integral part of these financial statements.
Optex Systems Holdings, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(Thousands, except share and per share data) | ||||||||
Three months ended | ||||||||
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