Shareholders and Customers,

We are now six weeks into our new Board structure, and we are reaping the impressive internal and external benefits.  Both Karen and Bill bring an increased and more rounded voice to the internal operations of Optex while Owen and David continue to keep us informed of the external trends in small cap governance.  Given the Board change, stock repurchase, the investment by management, and the dividend announcement, Optex stock has appreciated approximately 25% (early June to late July).

Recent contract wins have strengthened our backlog, and business remains strong.  Our management team and employees continue to work hard to increase shareholder value through the goals of increased revenue, gross margins and earnings.  Our most recent announcement ($12.4 million contract) is a great example of these efforts.  This five year contract enables consistent hours through the AOC factory and allows for greater factory efficiency through level loading the deliveries while leveraging our supply base for economies of scale.

Finally, I would like to share that we received an excellent product review on our new patented Red Tail Digital Spotting Scope and the 10X Stabilized Monocular (both sold through Cabela’s).  This review was published in Trigger Magazine, Volume 2-2017, which is owned by Guns and Ammo.  In his conclusion, the author wrote, “The Red Tail Digital Spotting Scope and the Stabilized Monocular are two exciting new optical systems that solve real world problems for shooters and hunters at prices that are financially viable for most.”  This is exactly our goal – to bring unique products which provide military performance at commercial pricing.  We’re excited about the future of these two commercial offerings.

Regards,

Danny Schoening

Optex CEO/Chairman