Financial Performance - For the three months ended June 30, 2024, net income increased by $0.7 million to $1.3 million compared to $0.6 million for the same period last year [100]. - Adjusted EBITDA for the three months ended June 30, 2024, rose by $0.9 million to $1.8 million, up from $0.9 million in the prior year period [100]. - Net income increased by $1.9 million to $2.8 million for the nine months ended June 30, 2024, compared to $0.8 million for the prior year period [101]. - Adjusted EBITDA rose by $2.7 million to $4.2 million for the nine months ended June 30, 2024, compared to $1.5 million for the prior year period [101]. - Total revenues increased by $1.9 million, or 26.3%, for the three months ended June 30, 2024, and by $7.0 million, or 39.6%, for the nine months ended June 30, 2024, compared to the prior year periods [102]. - Consolidated gross profit for the three months ended June 30, 2024, increased by $1.2 million, or 68.3%, and by $3.1 million, or 78.8%, for the nine months ended June 30, 2024, compared to the prior year periods [103]. - Operating income for the three months ended June 30, 2024, increased by $0.9 million, or 114.8%, and by $2.4 million, or 224.4%, for the nine months ended June 30, 2024, compared to the prior year periods [103]. Revenue and Orders - The company booked $28.3 million in new orders during the nine months ended June 30, 2024, representing a 7.6% increase over the prior year period [106]. - Orders for the Optex Richardson segment decreased by $0.1 million, or 0.5%, compared to the prior year period, primarily due to a prior year award for sighting systems [106]. - Orders for the Applied Optics Center segment increased by $2.1 million, or 27.3%, driven by demand for laser filter units and commercial optical assemblies [106]. - Optex Richardson revenue increased by $1.6 million or 52.3% for the three months ended June 30, 2024, driven by higher customer demand for various products [110]. - Applied Optics Center revenue increased by $2.4 million or 24.1% for the nine months ended June 30, 2024, primarily due to increased demand for laser filters [114]. Cost and Expenses - General and administrative expenses totaled $3.599 million for the nine months ended June 30, 2024, compared to $2.897 million for the prior year period [102]. - Cost of sales for the nine months ended June 30, 2024, increased to $17.4 million from $13.6 million in the prior year period [116]. Supply Chain and Operational Challenges - Recent supply chain disruptions have led to extended delivery lead times and increased costs for aluminum, steel, and acrylic commodities, negatively impacting net income for the year ended October 1, 2023 [93]. - The company has experienced significant material shortages affecting periscope products, which have delayed production and delivery dates [94]. - The company anticipates continued negative effects on margins from material shortages and increased costs over the next two years [93]. - The company is actively seeking alternative suppliers and increasing recruitment efforts to mitigate risks associated with labor shortages and supply chain issues [94]. Financial Position and Liabilities - As of June 30, 2024, the company had working capital of $14.2 million, up from $13.5 million as of October 1, 2023 [118]. - As of June 30, 2024, the Company had $1.0 million borrowed under the Credit Facility, which has a principal amount of $3 million [127]. - The interest rate on the Credit Facility is currently at 8.07% per annum [126]. - The Company had accrued warranty costs of $36 thousand as of June 30, 2024, down from $75 thousand as of October 1, 2023 [130]. - As of June 30, 2024, the Company had $101 thousand in contract loss reserves related to older legacy contracts [131]. - The deferred tax asset valuation allowance was ($0.8) million against deferred tax assets of $1.6 million as of June 30, 2024 [132]. - The Company has an authorized balance of $560 thousand remaining for its stock repurchase program as of June 30, 2024 [128]. - The Loan Agreement requires the Company to maintain a fixed charge coverage ratio of at least 1.25:1 and a total leverage ratio of 3.00:1 [127]. Future Outlook - The Company expects to generate net income and positive cash flow from operating activities over the next twelve months [125]. - The fair value of a contingent liability related to an earnout agreement was determined to be zero as of June 30, 2024, indicating low likelihood of achieving revenue milestones [92]. - The initial term of the contract manufacturing agreement for Speedtracker Mach products is one year, with potential for renewal [91]. - The Company intends to utilize government contract financing benefits to minimize potential negative impacts on working capital [124].

Financial Performance - Net income increased by $0.6 million to $1.1 million for the three months ended March 31, 2024, compared to $0.5 million for the prior year period [123]. - Adjusted EBITDA rose by $0.9 million to $1.6 million for the three months ended March 31, 2024, compared to $0.7 million for the prior year period [123]. - For the six months ended March 31, 2024, net income increased by $1.2 million to $1.5 million, compared to $0.3 million for the prior year period [124]. - Adjusted EBITDA for the six months ended March 31, 2024, increased by $1.8 million to $2.4 million, compared to $0.6 million for the prior year period [124]. - The increase in net income and adjusted EBITDA is primarily driven by higher revenue and improved gross profit performance across both operating segments [125]. - For the three months ended March 31, 2024, total revenues increased by $2.1 million, or 33.8%, compared to the prior year period [128]. - For the six months ended March 31, 2024, total revenues increased by $5.1 million, or 48.8%, compared to the prior year period [129]. - Consolidated gross profit for the three months ended March 31, 2024 increased by $1.0 million, or 64.6%, compared to the prior year period [130]. - Consolidated gross profit for the six months ended March 31, 2024 increased by $2.0 million, or 86.9%, compared to the prior year period [130]. - Operating income for the three months ended March 31, 2024 increased by $0.7 million compared to the prior year period [132]. - Operating income for the six months ended March 31, 2024 increased by $1.6 million compared to the prior year period [133]. - Total revenue for the three months ended March 31, 2024, increased by $2.1 million, or 33.8%, to $8.5 million compared to the prior year period [142]. - Total revenue for the six months ended March 31, 2024, increased by $5.1 million, or 48.8%, to $15.5 million compared to the prior year period [148]. Orders and Backlog - The Company booked $17.9 million in new orders during the six months ended March 31, 2024, representing a 6.3% decrease over the prior year period [136]. - The Optex Richardson segment experienced a 24.0% decrease in orders over the prior year period [136]. - The Applied Optics Center experienced a 51.1% increase in orders over the prior year period [136]. - Total customer orders for the six months ended March 31, 2024, decreased by $1.2 million, or 6.3%, to $17.9 million compared to the prior year period [137]. - Optex Richardson orders decreased by $3.5 million, or 24.0%, primarily due to a prior year award for $3.4 million in sighting systems for the Government of Israel [137]. - Applied Optics Center orders increased by $2.3 million, or 51.1%, driven by higher demand for laser filter units [137]. - Backlog as of March 31, 2024, was $44.2 million, an increase of $2.6 million, or 6.3%, from $41.6 million as of April 2, 2023 [138]. - Optex Richardson backlog increased by $4.7 million, or 18.7%, to $29.9 million as of March 31, 2024 [139]. Financial Position and Capital Management - The company moved its line of credit from PNC Bank to Texas Capital Bank, increasing the available line of credit to $3.0 million from $2.0 million [118]. - The Company had working capital of $13.6 million as of March 31, 2024, compared to $13.5 million as of October 1, 2023 [153]. - As of March 31, 2024, the Company reported a backlog of $44.2 million, reflecting an increase of 5.7% from $41.8 million on October 1, 2023, and 6.3% from $41.6 million on April 2, 2023 [155]. - The Company had approximately $0.3 million in cash and an outstanding balance of $0.5 million on its line of credit as of March 31, 2024, with accounts receivable totaling $3.7 million expected to be collected in Q3 fiscal 2024 [156]. - The Company plans to utilize current cash and available credit to fund inventory purchases to support backlog growth and anticipated revenue over the next twelve months [158]. - The Company has a revolving line of credit of $3 million with Texas Capital Bank, expiring on May 22, 2025, with an interest rate of 8.08% per annum [164]. - The Company has an authorized balance of $560 thousand remaining for its stock repurchase program as of March 31, 2024, with no repurchases made during the six months ended March 31, 2024 [166]. Acquisitions and Liabilities - The company acquired certain intellectual property and technical information related to the Speedtracker Mach product line for $1 million in cash, with potential future payments based on milestones [114]. - On January 18, 2024, the Company acquired intellectual property related to the Speedtracker Mach product line for $1 million in cash, with potential future payments based on revenue milestones [159]. - The acquisition included transaction costs of $30 thousand and a contingent liability of $86 thousand, with a total earnout payment of $238 thousand contingent on achieving revenue milestones [160]. - The fair value of a contingent liability related to an earnout agreement was $86 thousand as of March 31, 2024, with a total potential earnout payment of $238 thousand [115]. Operational Challenges - Recent supply chain disruptions have extended supplier delivery lead times, affecting operations and expected delivery dates [116]. - The Company anticipates continued material shortages and increased costs for aluminum, steel, and acrylic commodities, negatively impacting margins over the next three years [116]. - As of March 31, 2024, the Company had accrued warranty costs of $69 thousand, down from $75 thousand as of October 1, 2023, due to lower shipments and favorable changes in estimates [169]. - The Company recognized a gain of $120 thousand on changes in estimates for contract loss reserves during the three months ended March 31, 2024 [170]. - As of March 31, 2024, the Company had a deferred tax asset valuation allowance of $0.8 million against deferred tax assets of $1.7 million, resulting in a net deferred tax asset of $0.9 million [171].

Acquisition and Intellectual Property - Optex Systems, Inc. acquired certain intellectual property and technical information related to the Speedtracker Mach product line for $1 million in cash, with potential future payments based on milestones[108]. - The Company acquired certain intellectual property related to the Speedtracker Mach product line for $1 million in cash on January 18, 2024[146]. Financial Performance - Total revenues for the three months ended December 31, 2023, increased by $2.9 million, or 72.5%, compared to the prior year period[115]. - Consolidated gross profit for the same period increased by $1.0 million, or 134.9%, with gross margins improving in both operating segments[116]. - Operating income for the three months ended December 31, 2023, increased by $0.8 million, driven by higher revenue and gross profit[117]. - Net income for the three months ended December 31, 2023, was $0.4 million, compared to a net loss of $(0.2) million for the prior year period[121]. - Adjusted EBITDA for the same period increased by $0.9 million to $0.8 million, compared to $(0.2) million for the prior year[121]. - Gross margin for the consolidated results was 24.2% for the three months ended December 31, 2023, compared to 17.7% for the prior year[116]. - For the three months ended December 31, 2023, total revenue increased by $2.9 million or 72.5% compared to the prior year period, reaching $6.968 million[133]. - Operating income for the three months ended December 31, 2023, was $553 thousand, compared to an operating loss of ($282) thousand in the prior year[138]. Orders and Backlog - New orders booked during the three months ended December 31, 2023, totaled $10.1 million, representing a 9.8% decrease from $11.2 million in the prior year[124]. - Backlog as of December 31, 2023, was $45.0 million, an increase of 12.2% from $40.1 million as of January 1, 2023[127]. - The Optex Systems Richardson backlog as of December 31, 2023, was $29.3 million, an increase of $7.3 million or 33.2% from $22.0 million as of January 1, 2023[129]. Segment Performance - Orders for the Optex Richardson segment decreased by $2.4 million, or 27.9%, primarily due to a significant prior year order for the Government of Israel[125]. - Orders for the Applied Optics Center increased by $1.3 million, or 50.0%, driven by higher demand for laser filters and other products[126]. - Optex Systems Richardson revenue increased by $1.8 million or 109.6% for the three months ended December 31, 2023, driven by higher orders and backlog[134]. - Applied Optics Center revenue increased by $1.2 million or 47.6% for the three months ended December 31, 2023, primarily due to increased demand for laser filters[135]. Working Capital and Cash Flow - The company increased its line of credit from $2.0 million to $3.0 million to meet working capital requirements due to increased backlog and revenue delays[111]. - As of December 31, 2023, the Company had working capital of $13.0 million, a slight decrease from $13.5 million as of October 1, 2023[139]. - The Company generated operating cash of $2.3 million during the three months ended December 31, 2023[140]. Supply Chain and Operational Challenges - Significant material shortages have been experienced, particularly affecting periscope products, which have negatively impacted production levels and delivery dates[110]. - The company anticipates continued market-wide material shortages for critical components, which may adversely affect profit margins over the next three years[109]. - Recent supply chain disruptions have extended supplier delivery lead times, impacting the company's ability to sustain operations[109]. - The company is actively seeking alternative suppliers and increasing recruitment efforts to mitigate risks associated with labor shortages and component delays[110]. Risks and Regulatory Environment - The company is both a prime and sub-prime contractor to the Department of Defense, with contracts subject to Federal Acquisition Regulation clauses[102]. - The company is subject to risks related to defense program funding, geopolitical unrest, and changes in technology and customer order patterns[99]. - The company has noted that inflation did not significantly affect operating results for the periods presented[96]. Warranty and Contract Reserves - As of December 31, 2023, the company accrued warranty costs of $48 thousand, down from $75 thousand as of October 1, 2023, due to lower shipments and favorable changes in estimates[154]. - The company had $308 thousand in contract loss reserves as of December 31, 2023, compared to $243 thousand on October 1, 2023, primarily related to older legacy periscope IDIQ contracts[155]. - During the three months ended December 31, 2023, the company recognized $90 thousand in loss reserves on new contract awards and reduced existing loss reserves by $25 thousand[155]. - The company has a deferred tax asset valuation allowance of ($0.8) million against deferred tax assets of $1.7 million, resulting in a net deferred tax asset of $0.9 million as of December 31, 2023[156].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended October 1, 2023 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ until ___ Commission File Number 001-41644 OPTEX SYSTEMS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 90-0609531 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the transition period from ______to______. OPTEX SYSTEMS HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 001-41644 90-0609531 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1420 Presidential Drive, Richardson, TX 75081-2439 (Address of principal executive offices) (Zip Code) WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURI ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______. OPTEX SYSTEMS HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 000-54114 90-0609531 (State or other jurisdiction (Commission (IRS E ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 1, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______. OPTEX SYSTEMS HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 000-54114 90-0609531 (State or other jurisdiction of incorporation ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended October 2, 2022 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ until ___ Commission File Number 000-54114 OPTEX SYSTEMS HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 90-0609531 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 OPTEX SYSTEMS HOLDINGS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 000-54114 90-0609531 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1420 Presidential Drive, Richardson, TX 75081-2439 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972) 764-5700 Securities registered pursuant to Section 12(b) of the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 3, 2022 Delaware 000-54114 90-0609531 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1420 Presidential Drive, Richardson, TX 75081-2439 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972 ...