Optex Systems Holdings Inc Annual Report - How They Did This Year

This year's review covers the period from October 2, 2023, to September 29, 2024, as Optex Systems Holdings Inc. operates on a fiscal year ending in late September.

Who They Sell To: Customer Concentration

Optex Systems has a concentrated customer base, meaning a significant portion of their sales comes from a few key customers. Their main customers include various U.S. Government agencies and several major U.S. defense contractors. They also have a notable commercial customer. This concentration means that changes in orders from these big clients can have a big impact on the company's overall sales and financial health. The money owed to them (accounts receivable) also shows a similar concentration among a few key government and defense customers, as well as a foreign military customer.

How They Operate: Business Segments

Optex Systems operates through different parts of its business. Their main segments include:

• Optex Systems (Richardson, Texas): This segment primarily serves domestic and foreign military customers, including the U.S. Government and specific U.S. defense contractors.
• Applied Optics Center (Dallas, Texas): This segment focuses on commercial customers, subcontracted work, and also has military contracts, including those with the U.S. Government and major U.S. defense contractors.
• All Other Segments: This category covers the remaining parts of their operations.

These segments generate revenue from external customers and also do business with each other (intersegment revenues). The company recognizes revenue over time, which is typical for long-term projects and contracts.

Employee Compensation

The company uses restricted stock and restricted stock units (RSUs) as part of its compensation plans, including for its independent directors and president. These are forms of equity compensation that typically vest (become fully owned) over a period of time.

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Key Takeaways:

• Optex Systems Holdings Inc. operates on a fiscal year from October 2, 2023, to September 29, 2024.
• The company serves a concentrated customer base, primarily U.S. Government agencies, major U.S. defense contractors, and one notable commercial customer. Accounts receivable also show concentration, including a foreign military customer.
• Operations are structured into key segments: Optex Systems (Richardson, TX) focuses on military customers, while Applied Optics Center (Dallas, TX) serves commercial, subcontract, and military clients.
• Revenue is recognized over time, consistent with long-term projects and contracts.
• Employee compensation plans include restricted stock and restricted stock units (RSUs) for independent directors and the president, which vest over time.