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Optex Systems' (OPXS) Earnings Surge Y/Y in June Quarter

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Optex Systems Holdings, Inc. (OPXS - Free Report) reported a notable improvement in earnings for the quarter ended Jun 30, 2024. The company achieved an earnings per share (EPS) of 18 cents, a significant increase from 9 cents recorded in the same period last year. 

Revenues for the quarter came in at $9.1 million, marking a 26.3% increase from the $7.2 million reported in the comparable quarter of the previous year. 

The quarterly performance of Optex Systems was robust, driven by increased deliveries across its two primary segments: the Optex Richardson segment and the Applied Optics Center segment. The Richardson segment, which includes optical sighting systems for military applications, saw a substantial revenue increase of $1.6 million, while the Applied Optics Center contributed an additional $0.3 million. This growth reflects a strong recovery in military product demand, which offset a decline in commercial optical assemblies.

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Key Business Metrics

Gross Profit and Margins

Gross profit for the quarter surged by 68.3% to $2.9 million from $1.7 million in the previous year. The gross margin expanded to 31.8%, up from 23.9%. The expansion in gross margin was supported by higher production volumes spread across a fixed manufacturing cost base. Additionally, product mix improvements and better pricing strategies contributed to the margin growth.

Operating Income and Net Income

Operating income for the quarter more than doubled, increasing by 114.8% to $1.6 million from $0.8 million in the prior-year quarter. Net income for the quarter was $1.3 million, up 118.9% from $0.6 million in the previous year.

Adjusted EBITDA

Optex Systems' adjusted EBITDA nearly doubled to $1.8 million for the quarter, compared to $0.9 million in the same period last year.

Backlog

The company's backlog as of Jun 30, 2024, was $45.6 million, representing a 9.6% increase from the backlog of $41.6 million as of Jul 2, 2023. This growing backlog suggests a positive outlook for continued revenue growth in the coming quarters.

Financial Update (As of Jun 30, 2024)

Optex Systems reported cash and cash equivalents of $0.5 million, a notable decrease from the $1.2 million recorded as of Oct 1, 2023. 

Total assets increased to $24.9 million, up from $22.2 million as of Oct 1, 2023. 

Operating lease liabilities increased from $0.62 million to $0.63 million as of Jun 30, 2024. 

Working capital of $14.2 million denotes an increase from the $13.5 million recorded as of Oct 1, 2023.

Stockholders' equity improved substantially, rising to $17.7 million, from $14.9 million as of Oct 1, 2023. 

Operating cash flows for the nine months ended Jun 30, 2024, came in at $1 million.

Other Developments

During the nine months ended Jun 30, 2024, Optex Systems invested $1 million in the acquisition of intellectual property. This investment is likely aimed at strengthening its product offerings and maintaining its competitive edge in the defense sector.


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