Optex Systems (OPXS) investor relations material

Executive summary

• Revenue increased 11.6% year-over-year to $9.1 million, driven by strong Optex Richardson growth and higher periscope and XM30 program demand, partially offset by a decline at the Applied Optics Center segment.

• Net income was $0.2 million, down from $0.8 million in the prior year, primarily due to lower gross profit and increased G&A expenses, including non-recurring CEO transition costs.

• Adjusted EBITDA for the quarter was $0.7 million, down from $1.1 million year-over-year.

• Backlog as of December 28, 2025, was $37.9 million, a 9.8% decrease from the prior year, but order momentum remained strong with $7.9 million in new orders, up 31.7% year-over-year.

• Gross margin declined to 22.9% from 26.0% year-over-year, impacted by legacy contracts, higher material costs (notably gold), and increased G&A expenses.

Financial highlights

• Operating income dropped to $0.1 million from $0.9 million year-over-year.

• Operating cash used was $0.1 million, compared to $2.8 million generated in the prior year period.

• Cash and cash equivalents at quarter end were $5.8 million, with no outstanding balance on the $3 million revolving credit facility.

• Working capital stood at $21.2 million as of December 28, 2025.

• Basic EPS was $0.04, down from $0.12 in the prior year.

Outlook and guidance

• Management expects revenues and gross profit to increase in the second half of fiscal 2026 as legacy loss contracts conclude and new programs scale.

• Margins and profitability anticipated to improve sequentially, with AOC revenues projected to recover as government appropriations resume.

• G&A spending expected to remain elevated in 2026 due to increased R&D investment.

• Expectation of net income and positive operating cash flow over the next nine months.

• The company plans to use available cash and credit to fund capital equipment, inventory, and R&D for new programs and higher anticipated revenue.