Optex Systems Announces $3.8 Million Order for Laser Protected Periscopes

Rhea-AI Summary

Optex Systems Holdings, a manufacturer of optical sighting systems, secured a $3.8 million contract from a U.S. Government Prime Contractor for laser protected periscopes. The contract supports the Armored Multi-Purpose Vehicle (AMPV) with deliveries over the next 14 months. Optex is the exclusive supplier for laser protected periscopes for armored vehicles produced for the U.S. Government. The AMPV project is important for the U.S. Army's Armored Brigade Combat Team (ABCT) strategy. With this contract, Optex's backlog exceeds $47 million.

Positive

• Securing a $3.8 million contract demonstrates Optex Systems' strong position as a sole source supplier for laser protected periscopes used in armored vehicles for the U.S. Government.

• The contract to support the Armored Multi-Purpose Vehicle (AMPV) project indicates Optex's contribution to critical improvements in troop transportation for the U.S. Army's Armored Brigade Combat Team (ABCT).

• The current Optex backlog exceeding $47 million signifies a healthy pipeline of future orders and revenue for the company.

Negative

• None.

Insights

Defense Industry Analyst

The recent order for laser protected periscopes, valued at $3.8 million, granted to Optex Systems by a U.S. Government Prime Contractor is a testament to the company's niche specialization in precision optical sighting systems. As the sole source supplier, Optex benefits from limited competition; however, this also creates a dependency on government spending for defense, which can be subject to changes in policy and budgetary constraints. For stakeholders, the addition to the backlog, now exceeding $47 million, enhances the company's revenue visibility and can be seen as a stabilizing factor for future earnings. Considering the described integration of the AMPV with the ABCT and the emphasis on protection and interoperability, the order may signal ongoing and potentially increased investment in modernization efforts by the U.S. Army. One should monitor the defense budget allocations and geopolitical tensions, as these can significantly affect the company's order inflow.

Financial Analyst

This contract for Optex Systems represents a substantial increment to the company's backlog and might indicate a robust demand for its products. The $3.8 million contract over the next 14 months could lead to a predictable and even revenue stream, potentially improving the company's financial health. Nevertheless, as with all defense contractors, investors should consider the cyclicality and political nature of defense contracts. It is also important to understand the long-term sustainability of such orders and whether the company can maintain or diversify its customer base to mitigate risks associated with being a sole-source supplier. The current backlog figure provides a cushion for operational planning but scrutinizing the company's ability to fulfill these orders efficiently while maintaining margins will be key for long-term profitability.

RICHARDSON, TX / ACCESSWIRE / May 6, 2024 / Optex Systems Holdings, Inc. (NASDAQ:OPXS), a leading manufacturer of precision optical sighting systems for domestic and worldwide military and commercial applications, announced today it has been awarded a new contract from a U.S. Government Prime Contractor, in support of the Armored Multi-Purpose Vehicle (AMPV). The order value is $3.8 million with deliveries over the next 14 months.

Danny Schoening, CEO, Optex Systems stated "Optex is the sole source supplier to Prime Contractors for laser protected periscopes used on many of the armored vehicles currently being produced for the U.S. Government. The AMPV has been identified as a critical improvement for the US Army in the area of troop transportation. Our customer has described it as, ‘The program is essential to the future of the Armored Brigade Combat Team (ABCT) and will fulfill the Army's strategy of protection, mobility, reliability, and interoperability. The AMPV will be integrated with the ABCT and is required to operate alongside the M1 Abrams tank and the M2 Bradley'."

With this order, the current Optex backlog is in excess of $47 million.

ABOUT OPTEX SYSTEMS

Optex, which was founded in 1987, is a Richardson, Texas based ISO 9001:2015 certified concern, which manufactures optical sighting systems and assemblies, primarily for Department of Defense (DOD) applications. Its products are installed on various types of U.S. military land vehicles, such as the Abrams and Bradley fighting vehicles, Light Armored and Armored Security Vehicles, and have been selected for installation on the Stryker family of vehicles. Optex also manufactures and delivers numerous periscope configurations, rifle and surveillance sights, and night vision optical assemblies. Optex delivers its products both directly to the military services and to prime contractors. For additional information, please visit the Company's website at www.optexsys.com.

Safe Harbor Statement

This press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the products and services described herein. You can identify these statements by the use of the words "may," "will," "could," "should," "would," "plans," "expects," "anticipates," "continue," "estimate," "project," "intend," "likely," "forecast," "probable," and similar expressions.

These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding growth strategy; product and development programs; financial performance and financial condition (including revenue, net income, profit margins and working capital); orders and backlog; the estimated value of IDIQ contracts; expected timing of contract deliveries to customers and corresponding revenue recognition; increases in the cost of materials and labor; costs remaining to fulfill contracts; contract loss reserves; labor shortages; follow-on orders; supply chain challenges; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; and the economy in general or the future of the defense industry.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs and military spending, the timing of such funding, general economic and business conditions, including unforeseen weakness in the Company's markets, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in the U.S. Government's interpretation of federal procurement rules and regulations, changes in spending due to policy changes in any new federal presidential administration, market acceptance of the Company's products, shortages in components, production delays due to performance quality issues with outsourced components, inability to fully realize the expected benefits from acquisitions and restructurings or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, changes to export regulations, increases in tax rates, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, unanticipated costs under fixed-price service and system integration engagements, changes in the market for microcap stocks regardless of growth and value and various other factors beyond our control.

You must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. The Company does not assume the obligation to update any forward-looking statement. You should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.

Contact:
IR@optexsys.com
(972) 764-5718

SOURCE: Optex Systems Holdings, Inc.

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