Optex Systems Holdings, Inc. · NASDAQ:OPXS
Optex Systems — IPO Roadshow (August 2016)
29 slides from Optex Systems's IPO roadshow presentation, Aug 2, 2016
Slide 1: Corporate Overview
CORPORATE OVERVIEW
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation includes forward - looking statements that are subject to many risks and uncertainties . These forward - looking statements, such as statements about Optex’s short - term and long - term growth strategies, can sometimes be identified by use of terms such a
Slide 3: Free Writing Prospectus Statement
Symbol: OPXS 3 FREE WRITING PROSPECTUS STATEMENT This presentation highlights basic information about us and the offering. Because it is a summary, it does not contain all o f the information that you should consider before investing in our company. This free writing prospectus relates only to, and
Slide 4: Transaction Summary
Symbol: OPXS 4 TRANSACTION SUMMARY Issuer Optex Systems Holdings, Inc. Expected Offering Size Approximately $5,000,000 of Common Stock and Warrants (100% Primary) Listing Common Stock is quoted on the OTCQB under the symbol “OPXS” Applied to quote the warrants on the OTCQB under the symbol “OPXSW” O
Slide 5: Recent Developments
Recent Developments ⦿ Optex Systems Wins Award for 5 - Year Contract with DLA for $5.99 Million RICHARDSON, Texas, July 22, 2016 Optex Systems, Inc……..announced it has won a 5 - year Indefinite Delivery, Indefinite Quantity (IDIQ) contract worth $5.99 Million to supply its laser protected periscopes
Slide 6: Market Opportunity
MARKET OPPORTUNITY ⦿ Periscopes & Vision Block and Sighting Systems combine for an estimated $1 billion worldwide • Optex has a great foothold in the Periscopes & Vision Block market with an estimated 75% market share in the U.S. ($8 - $10M) and 20 - 30% worldwide ($40 - $50M) • The Company has a 5%
Slide 7: Highlights
HIGHLIGHTS Symbol: OPXS 7 ⦿ High asset utilization ⦿ New capacity creation Operating Performance Potential ⦿ Create internal linkages through vertical integration and technology advancement ⦿ Capitalize on overseas market expansion Market Share Expansion ⦿ Identify targets’ critical capabilities ⦿ S
Slide 8: Optex Overview
OPTEX OVERVIEW ⦿ A 28 - year old, Texas - based company provides the most reliable optical sighting systems to the US Department of Defense, foreign governments, and commercial consumers of optical products ⦿ 89 employees; 93,000 square foot facility ⦿ Patents – Three Issued by USPTO, One in process
Slide 9: Business Divisions Overview
BUSINESS DIVISIONS OVERVIEW Symbol: OPXS OPTEX HOLDING SYSTEMS ⦿ Military Optical Sighting Systems ⦿ Weapon Systems, Optical Subassemblies ⦿ High Definition Imaging Systems ⦿ Thermal and Night Vision Systems ⦿ Video Display Systems ⦿ Premier Thin Film Coatings ⦿ Precision Optical Assembly Processes
Slide 10: Optex Business Strategy
OPTEX BUSINESS STRATEGY Symbol: OPXS 10 Optex has established core competencies by proving its product reliability and product quality and by maintaining deep product and sector knowledge in an overall supply chain control environment ⦿ Optical engineering ⦿ Mechanical sighting systems ⦿ Assembly Pr
Slide 11: Company Products
COMPANY PRODUCTS Symbol: OPXS 11 M Series ICWS Laser & Non - Laser Protected Acrylic & Glass Periscopes 43% 2016YTD Rev % Periscopes CSS, MRS Big Eye, etc. Digital Day and Night (DDAN) Muzzle Reference Systems (MRS) Ships Binoculars, Collimators, etc. 15% 2016YTD Rev % Sighting Systems Optical cell
Slide 12: Sample Products
SAMPLE PRODUCTS Symbol: OPXS 12 DDAN / M36 Sights M17 Day/Thermal Periscope Back Up Sight Howitzer Products Laser Protected Periscopes Red Tail – Digital Spotting Scope Commercial Optical Assembly Naval Binoculars
Slide 13: Optex Margin Drivers
⦿ Gross margin increases as Optex and Applied Optics Center (AOC) manufacturing capacity is currently under - utilized ⦿ Economy of scale - material costs from suppliers also trend lower OPTEX MARGIN DRIVERS Symbol: OPXS 13 Patented / IP Protected Products Commercial Market Expansion Preferred Suppl
Slide 14: Market Share & Major Players
MARKET SHARE & MAJOR PLAYERS Symbol: OPXS Periscopes & Vision Blocks Markets UK Germany South Korea Israel 75% US 20 - 30% Worldwide Worldwide $40 - 50MM UK Norway Belgium 5% US 0.5 - 1% Worldwide US $8 - 10MM Worldwide $500MM - $1B Sighting Systems Markets UK US $100MM 14
Slide 15: Major Competition
MAJOR COMPETITION Symbol: OPXS 15 Company Business Description Competition Latest Status Miller - Holzwarth Inc. Once larger acrylic periscopes producer Went into a bidding war and drove the price down from 2007 to 2013 Bankrupt Optex purchased the assets at public auction in 2013 and began price re
Slide 16: Select Major Customers
SELECT MAJOR CUSTOMERS Symbol: OPXS 16 DEFENSE CUSTOMERS COMMERCIAL CUSTOMERS
Slide 17: Sales Mix Shifts – Growing Commercial & Foreign Military Sales
2% 24% 74% Commercial Foreign Other 14% 20% 66% Commercial Foreign Other 17% 18% 66% Commercial Foreign Other SALES MIX SHIFTS – GROWING COMMERCIAL & FOREIGN MILITARY SALES Symbol: OPXS 17 Company has been able to diversify its sales channels over the past few years. Commercial and foreign military
Slide 18: Acquisition Strategy – Applied Optics Center (AOC) Case Study
ACQUISITION STRATEGY – APPLIED OPTICS CENTER (AOC) CASE STUDY ⦿ AOC was Optex’s preferred supplier of laser coatings and laser coated filters in support of Optex’s periscope shipments ⦿ Previously Optex has ordered $500K - $1.5 MM per year of products from AOC. AOC will continue to support L3/Insigh
Slide 19: US Government Markets & M&A Outlook
US GOVERNMENT MARKETS & M&A OUTLOOK Symbol: OPXS 19 ⦿ The industry’s M&A activity is poised for a steady growth since DoD’s budget sequestration ⦿ Analysis revealed a significant improvement in transaction activity in 2014 with a notable pickup in defense related transactions planned for 2015 Domest
Slide 20: Foreign Defense Markets Outlook
FOREIGN DEFENSE MARKETS OUTLOOK Symbol: OPXS 20 ⦿ Optex has increased efforts to promote its proven military products as well as newly improved product solutions directly to foreign military representatives • M17 Day/Thermal Periscopes to South America ⦿ Optex will continue pursuing international op
Slide 21: Market Development - Foreign Military Order Expansion
Australia Israel South America Saudi Arabia $4.0 MM Potential • Supplier of periscopes and commander’s sighting system to Australian Land 400 Program through GDLS - CA $8.3 MM Potential • $2.5 MM from General Dynamics Land Systems Canada (DGLS - CA) • $4.8 MM from CMI Defence $3.0 - 6.0 MM Potential
Slide 22: Keys to Product Development
OPTICAL DESIGN TOOLS THIN FILM DESIGN TOOLS MECHANICAL DESIGN TOOLS VERTICAL INTEGRATION OF KEY EQUIPMENT & PROCESSES • 2D/3D Capability • Thermal / Strength Analysis • Glass Properties • Glass Shape • Color / Distortion Control • Wavelength notching • Transmissivity Analysis • Absorption Analysis •
Slide 23: Market Development - New Commercial Opportunities
On 5/26/2015, Optex entered into an exclusive supply agreement with Nightforce Optics for supply of critical optical assemblies • $3.0 MM in 2016 • $4 - 5 MM in 2017 • Extendable for an additional year 4 assemblies in production now 18 new assemblies in roadmap 8 assemblies in quotation phase MARKET
Slide 24: Diversification - New Commercial Opportunities
• Released to Cabela’s for the consumer market • Released to the general service administration (GSA) schedule • $800 - $1,000/unit final sales price DIVERSIFICATION N EW C OMMERCIAL O PPORTUNITIES Symbol: OPXS 24 Nighthawk (in Development) Stabilized Monocular Digital Spotting Scopes: Red Tail Comm
Slide 25: Leadership Team
LEADERSHIP TEAM Symbol: OPXS 25 Danny Schoening – CEO 28 years in Engineering, Manufacturing, Optics, and Business Leadership; holds 3 US Patents. Previously with Honeywell International (HON) and Finisar Corporation (FNSR). Karen Hawkins – CFO 25 years in Defense and Transportation. Previously with
Slide 26: Capitalization Table
CAPITALIZATION TABLE Shares Total Current Shares Outstanding 1,730,436 Options 52,850 Warrants - Stock Awards - Fully Diluted Shares (as reported) 4,442,065 * Symbol: OPXS 26 Pro Forma Excluding the Securities in this Offering * Includes the conversion of all of our Series A and Series B Preferred S
Slide 27: Summary
SUMMARY ⦿ Market Opportunity • $1 Billion worldwide • Increasing market share (commercial and foreign) ⦿ Product Portfolio • Highest quality • Innovative product development • New product launches ⦿ Proven Acquisition Strategy • Identify targets’ critical capabilities • Seek vertical integration • B
Slide 28: Backlog & Historical Quarterly Revenue
BACKLOG & HISTORICAL QUARTERLY REVENUE Symbol: OPXS 28 ⦿ Historically, the company’s growth and financial performance have been affected with the Department of Defense budget sequestration ⦿ It is now situated at an inflection point of the defense industry as sequestration is predicted to bottom out
Slide 29: Corporate Profile
CORPORATE PROFILE Optex Systems Holdings, Inc. 1420 Presidential Drive Richardson, TX 75081 972 - 764 - 5700 www.optexsys.com IRTH Communications Robert Haag, Managing Director 866 - 976 - 4784 OPXS@irthcommunications.com Symbol: OPXS Media and Investor Relations: