Optex Systems Announces a $2.8 Million Award for Laser Protected Periscopes and Vision Blocks
- Optex Systems Holdings, Inc. has been awarded a significant five year IDIQ contract from the United States Defense Logistics Agency Land and Maritime for Sighting Systems.
- The maximum value of the contract is estimated at $2.8 Million, contributing to the current Optex backlog in excess of $45 million.
- None.
Insights
Optex Systems Holdings' new IDIQ contract with the U.S. Defense Logistics Agency Land and Maritime signifies a stable revenue stream over the next five years. The contract's estimated maximum value of $2.8 million, while not substantial in the context of larger defense contracts, provides a predictable inflow of funds and bolsters the company's backlog, which now exceeds $45 million. This backlog is a critical indicator of Optex's financial health and future performance, as it reflects the company's ability to secure and maintain long-term contracts.
It's important to note that the defense industry often operates through such long-term contracts, which can lead to stable earnings over time. This contract also demonstrates Optex's entrenched position as a key supplier in the defense supply chain, specifically in the niche market of optical sighting systems for armored vehicles. However, investors should be aware that the defense sector is subject to political and budgetary uncertainties, which can impact future contract awards and renewals.
The announcement by Optex Systems Holdings is a testament to the company's competitive edge in the precision optical sighting systems market. The award of a five-year IDIQ contract not only ensures a steady workload but also potentially strengthens the company's bargaining position in future negotiations with both commercial and military clients. The Laser Protected Periscopes and Vision Blocks, being essential for mission capability, indicate a sustained demand for Optex's products, which can be leveraged to explore new markets and innovate further within the field.
Investors should consider the implications of this contract on Optex's market share and the potential for expansion into international markets. The reliance on military contracts, however, does pose a risk of volatility in the event of defense spending cuts or shifts in military priorities. Diversification into commercial applications could mitigate this risk and provide additional growth avenues for the company.
The financial implications of the IDIQ contract for Optex Systems Holdings are multifaceted. On one hand, the contract contributes to a solid order backlog, which is a positive sign for investors looking for stability and growth potential. On the other hand, the contract value, at an estimated maximum of $2.8 million over five years, represents a relatively modest increase in annual revenue, given the size of the company and the defense sector as a whole.
Investors should examine the company's past performance in fulfilling such contracts and the efficiency with which it can convert the backlog into recognized revenue. The ability to maintain margins while scaling up production to meet the demands of the IDIQ contract will be crucial for Optex's profitability. In addition, the contract may have a multiplier effect, enhancing the company's reputation and leading to further contracts, which can have a compounding positive effect on the stock's valuation over time.
RICHARDSON, TX / ACCESSWIRE / February 5, 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 five year Indefinite Delivery Indefinite Quantity (IDIQ) contract from the United States Defense Logistics Agency Land and Maritime for Sighting Systems. The maximum value for the five year IDIQ is estimated at
Danny Schoening, CEO, stated "Optex continues to be the supplier of choice in supporting the overall supply chain for domestic armored vehicle manufacturing. We look forward to continuing the production of these units for DLA over the next five years."
With this order, the current Optex backlog is in excess of
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 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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FAQ
What is the new contract awarded to Optex Systems Holdings, Inc. for?
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Who stated that Optex continues to be the supplier of choice in supporting the overall supply chain for domestic armored vehicle manufacturing?
What is the current backlog for Optex Systems Holdings, Inc.?
