Optex Systems (OPXS) investor relations material

Executive summary

• Revenue for the quarter ended March 29, 2026, was $9.6 million, down 10.3% year-over-year, mainly due to delayed government contract awards from a federal shutdown and appropriations delay; six-month revenue was nearly flat at $18.8 million.

• Net income for the quarter was $1.3 million ($0.19 per diluted share), down from $1.8 million or $1.6 million last year, primarily due to higher general and administrative expenses, including labor, stock-based compensation, and professional fees.

• Operating income for the quarter was $1.7 million, down from $2.2 million in the prior year, reflecting increased overhead from executive transition and organizational changes.

• Backlog as of March 29, 2026, was $36.6 million, a 10.9% decrease from the prior year, with Optex Richardson backlog declining and Applied Optics Center backlog increasing.

• New orders rose 3.8% year-over-year to $16.3 million for the first six months.

Financial highlights

• Gross margin for the quarter improved to 35.2% from 31.3% year-over-year, driven by completion of loss-making contracts, operational efficiencies, and favorable warranty adjustments.

• Adjusted EBITDA for the quarter was $2.0 million, down from $2.4 million year-over-year, a 16.4% decrease; for the six months, Adjusted EBITDA was $2.8 million, down from $3.6 million.

• Cash and cash equivalents at quarter-end were $4.2 million, with no outstanding balance on the $3 million revolving credit facility.

• Working capital stood at $22.6 million, up from $21.1 million at the prior fiscal year-end.

• Operating expenses rose due to leadership transition, higher R&D, stock compensation, and compliance investments.

Outlook and guidance

• Management expects a strong revenue rebound in the second half of fiscal 2026, led by growth in laser filters, optical assemblies, and related products.

• Full-year fiscal 2026 revenue expected between $43 million and $45 million, up from $41.3 million in fiscal 2025.

• Full-year Adjusted EBITDA projected between $7.5 million and $8.5 million, compared to $8.0 million in fiscal 2025.

• General and administrative expenses are expected to remain elevated due to ongoing organizational realignment, R&D investment, and compliance initiatives.

• The company anticipates generating net income and positive operating cash flow over the next twelve months.