Core Insights - Optex Systems Holdings, Inc. reported a decline in shares by 1.4% following its fiscal year earnings announcement, contrasting with a 0.5% growth in the S&P 500 index during the same period [1] - The company achieved earnings per share of 74 cents, an increase from 55 cents in the previous fiscal year [1] Financial Performance - Revenues increased to $41.3 million from $34 million, marking a 21.6% year-over-year growth [2] - Gross profit rose by 26.5% to $12.1 million from $9.5 million, with gross margin expanding from 28% to 29.2% [2] - Operating income surged 47.9% to $7.1 million compared to $4.8 million a year earlier [3] - Net income applicable to common shareholders grew 36.6% year-over-year, reaching $5.1 million, up from $3.8 million in fiscal 2024 [3] - Adjusted EBITDA increased 40.1% to $8 million from $5.7 million in the prior year [4] - Operating cash flow was strong at $6.9 million, driven by higher net income and non-cash adjustments [4] Order Intake and Challenges - Order intake slightly declined to $36.2 million, a 0.5% decrease compared to $36.4 million in the previous fiscal period, attributed to delays in key defense contracts and the U.S. federal government shutdown [5] Working Capital and Liquidity - Working capital improved significantly to $21.1 million as of the fiscal year-end, up from $15.1 million the previous year [6] - Cash and cash equivalents grew to $6.4 million, and the company cleared its outstanding balance on a $3 million revolving credit line, indicating a stronger liquidity position [6] Management Commentary - CEO Danny Schoening described fiscal 2025 as an "exciting year," highlighting the 21.6% revenue growth and operational gains [7] - Increased production throughput, particularly a 56% boost in periscope line production, and elevated demand for military products were noted as key drivers [7] Segment Performance - The Richardson segment experienced a 30.8% jump in sales, while the Applied Optics Center (AOC) saw an 11.1% increase [8] - Production gains at Richardson were attributed to higher throughput, while AOC's growth was tempered by weaker demand for optical assemblies [8] Gross Margin and Income Factors - Gross margin expansion was supported by better absorption of fixed overheads due to higher revenues and a favorable product mix [9] - Net income gains were partially offset by a $0.8 million impairment on the Speedtracker product line and a $0.2 million increase in federal income tax expense [9] Future Outlook - Management cautioned that ongoing funding delays and uncertainty regarding U.S. government appropriations may impact revenue performance from the second quarter onward [10] - Plans to invest $2.4 million in capital expenditures over the next 12 months were announced to upgrade equipment and develop new capabilities [11] Leadership Changes - CEO Danny Schoening will resign effective Dec. 20, 2025, with President Chad George set to take over as CEO [12] - This leadership transition is seen as a strategic move as the company continues its expansion efforts [13]