Segment Reporting

12 Months Ended

Sep. 28, 2025

Segment Reporting [Abstract]

Segment Reporting

Note 4 — Segment Reporting

The Company’s two reportable segments, Applied Optics Center (“Applied Optics Center” or “AOC”) and Optex Systems – Richardson (“Optex Richardson”), are strategic businesses offering similar products to similar markets and customers; however, they are operated and managed separately due to differences in manufacturing technology, equipment, geographic location, and specific product mix. Applied Optics Center was acquired as a unit, and management at the time of the acquisition was retained.

The Applied Optics Center segment also serves as the key supplier of laser coated filters used in the production of periscope assemblies for the Optex Richardson segment. Intersegment sales and transfers are accounted for at annually agreed to pricing rates based on estimated segment product cost, which include segment direct manufacturing and general and administrative costs but exclude profits that would apply to third party external customers.

The Chief Operating Decision Maker (CODM), which is our CEO, uses the segment revenue, cost of sales and net operating income to assess the Company’s performance and allocation of resources. A summary of segment performance for the twelve months ended September 28, 2025 and September 29, 2024 is included in the table below:

	(Thousands) Twelve months ended
	September 28, 2025												September 29, 2024
	Optex Systems Richardson			Applied Optics Center Dallas			Other (non- allocated costs and eliminations)			Consolidated			Optex Systems Richardson			Applied Optics Center Dallas			Other (non- allocated costs and eliminations)			Consolidated
Revenue from External Customers	$	23,761		$	17,576		$	-		$	41,337		$	18,171		$	15,824		$	-		$	33,995
Intersegment Revenues		-			1,157			(1,157	)		-			-			1,042			(1,042	)		-
Total Segment Revenue		23,761			18,733			(1,157	)		41,337			18,171			16,866			(1,042	)		33,995
Total Cost of Sales		17,699			12,738			(1,157	)		29,280			14,401			11,107			(1,042	)		24,466
Gross Profit		6,062			5,995			-			12,057			3,770			5,759			-			9,529
Gross Margin %		25.5	%		32.0	%		-			29.2	%		20.7	%		34.1	%		-			28.0	%
General and Administrative Expense		3,771			771			383			4,925			3,630			653			425			4,708
Segment Allocated G&A Expense		(1,356	)		1,356			-			-			(1,486	)		1,486			-			-
Net General & Administrative Expense		2,415			2,127			383			4,925			2,144			2,139			425			4,708
Operating Income (Loss)		3,647			3,868			(383	)		7,132			1,626			3,620			(425	)		4,821
Operating Income (Loss) %		15.3	%		20.6	%		-			17.3	%		8.9	%		21.5	%		-			14.2	%
Asset Impairment		(804	)		-			-			(804	)		-			-			-			-
Interest Income (Expense)		-			-			23			23			-			-			(47	)		(47	)
Income (Loss) before taxes	$	2,843			3,868			(360	)		6,351		$	1,626			3,620			(472	)		4,774
Income (loss) before taxes %		12.0	%		20.6	%		-			15.4	%		8.9	%		21.5	%		-			14.0	%

Optex Systems (OPX) – Richardson, Texas

Optex Richardson revenues are primarily in support of prime and subcontracted military customers. Approximately 90% of the Optex Richardson segment revenue is comprised of domestic military customers, and 10% is comprised of foreign military customers. For the twelve months ended September 28, 2025, Optex Richardson represented 58% of the Company’s total consolidated revenue and consisted of the U.S. government, 22%, and two major U.S. defense contractors representing 15% and 10%, of the Company’s consolidated revenue, respectively.

Optex Richardson is located in Richardson Texas, with leased premises consisting of approximately 49,100 square feet. As of September 28, 2025, the Richardson facility operated with 87 full-time equivalent employees in a single shift operation. The facilities at Optex Richardson serve as the home office for both the Optex Richardson and Applied Optics Center segments.

Applied Optics Center (AOC) – Dallas, Texas

The Applied Optics Center serves primarily domestic U.S. customers. Sales to commercial customers represent 10% and military sales to prime and subcontracted customers represent 90% of the total segment revenue. Approximately 94% of the AOC revenue is derived from external customers and approximately 6% is related to intersegment sales to Optex Richardson in support of military contracts. For the twelve months ended September 28, 2025, AOC represented 42% of the Company’s total consolidated revenue and consisted of revenue from the U.S. government, 5%, and two major defense contractors representing 6% and 6% of the Company’s consolidated revenue, respectively.

The Applied Optics Center is located in Dallas, Texas with leased premises consisting of approximately 44,867 square feet of space. As of September 28, 2025, AOC operated with 45 full-time equivalent employees in a single shift operation.

The financial table below presents the information for each of the reportable segments profit or loss as well as segment assets for each year. The Company does not allocate interest expense, income taxes or unusual items to segments.

	Reportable Segment Financial Information (thousands)
	Twelve months ended September 28, 2025
	Optex Systems Richardson			Applied Optics Center Dallas		Other (non-allocated costs and intersegment eliminations)			Consolidated Total
Revenues from external customers	$	23,761		$	17,576	$	-		$	41,337
Intersegment revenues		-			1,157		(1,157	)		-
Total Revenue		23,761			18,733		(1,157	)		41,337
Interest income		-			-		(23	)		(23	)
Depreciation and Amortization		276			239		-			515
Income (loss) before taxes		2,843			3,868		(360	)		6,351
Other significant noncash items:
Allocated home office expense		(1,356	)		1,356		-			-
Stock compensation expense		-			-		383			383
Warranty expense		-			110		-			110
Segment Assets		22,126			7,930		-			30,056
Expenditures for segment assets		259			245		-			504

	Reportable Segment Financial Information (thousands)
	Twelve months ended September 29, 2024
	Optex Systems Richardson			Applied Optics Center Dallas		Other (non-allocated costs and intersegment eliminations)			Consolidated Total
Revenues from external customers	$	18,171		$	15,824	$	-		$	33,995
Intersegment revenues		-			1,042		(1,042	)		-
Total Revenue		18,171			16,866		(1,042	)		33,995
Interest expense		-			-		47			47
Depreciation and Amortization		167			320		-			487
Income (loss) before taxes		1,626			3,620		(472	)		4,774
Other significant noncash items:
Allocated home office expense		(1,486	)		1,486		-			-
Stock compensation expense		-			-		425			425
Warranty expense		17			12		-			29
Segment Assets		17,038			8,480		-			25,518
Expenditures for segment assets		1,382			349		-			1,731