• Precision Optics Reports Third Quarter Fiscal Year 2024 Financial Results

    Source: Nasdaq GlobeNewswire / 15 May 2024 15:30:00   America/Chicago

    GARDNER, Mass., May 15, 2024 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. (NASDAQ: POCI), a leading designer and manufacturer of advanced optical instruments for the medical and defense industries, announced operating results on an unaudited basis for its third quarter fiscal year 2024 for the period ended March 31, 2024.

    Q3 2024 Financial Highlights (3 Months Ended March 31, 2024):

    • Revenue increased 4% to $5.2 million, compared to $5.0 million in the same quarter of the previous fiscal year, and up 9% compared to the most recent sequential quarter.
    • Engineering revenue increased 62% to $2.3 million compared to $1.4 million in the same quarter of the previous fiscal year, representing record engineering revenue.
    • Production revenue was $3.0 million compared to $3.6 million in the same quarter of the previous fiscal year, but up 15% compared to $2.6 million in the most recent sequential quarter.
    • Gross margins were 35.5% compared to 34.4% in the same quarter of the previous year.
    • Net loss for the quarter was ($317,055), compared to $(398,432) in the same quarter of the previous year.
    • Adjusted EBITDA was $52,012 for the quarter compared to $9,456 in the same quarter of the previous year.

    Recent Additional Highlights:

    • In April 2024, the Company announced the receipt of a $720,000 follow on production order from a top tier defense/aerospace company addressing a commercial application that leverages the Company's proprietary manufacturing technology developed for high precision micro-optics systems.
    • In April 2024, the Company announced the receipt of a follow-on production order totaling approximately $1.25 million from a major U.S. defense contractor, to meet continued demand for a highly complex optical assembly manufactured by Precision Optics.
    • In May 2024, the Company announced the receipt of a $9 million production order for a high volume single-use cystoscopy surgery program.

    Precision Optics' CEO, Joseph Forkey, commented, “The financial results of the third quarter highlight the sequential growth expectations we had for fiscal 2024, with the second half of the fiscal year outpacing the first half. The growth trends are being driven by the recent receipt of several new and follow-on production orders for a variety of applications leveraging our unique micro-optics and digital imaging capabilities for medical device and aerospace/defense applications, coupled with record levels of engineering revenue.”

    “Building on this momentum, last week we announced the receipt of a $9 million landmark production order from a leading surgical company to supply a single-use endoscope assembly for use in their cystoscopy surgery system. The order is expected to be delivered over the next several quarters and highlights the success of our strategy to serve our customers from design to fully scaled manufacturing, and the broader opportunity that high-volume, single-use applications provide to the Company. The market for medical devices is robust with the single-use device segment growing two to three times more rapidly than the traditional market. We look forward to fulfilling this initial production order and the opportunity it provides to demonstrate our single-use engineering and production capabilities.”

    “I believe Precision Optics is well positioned for future growth given the recent receipt of several new production orders, many of which extend out multiple years, and the strength of our engineering pipeline which continues to advance new programs into commercialization. With production deliveries for the $9 million single-use order set to commence in July 2024, we aim to accelerate revenue growth and drive incremental profitability as we complete fiscal 2024 and enter the new year,” Dr. Forkey concluded.

    The following table summarizes the third quarter and fiscal year to date (unaudited) results for the periods ended March 31, 2024, and 2024:

        
     Three Months
    		 Nine Months
     Ended March 31,
    		 Ended March 31,
     20242023 20242023
    Revenues$5,242,579 $5,048,065  $14,388,123 $16,020,327 
    Gross Profit1,858,737 1,736,098  4,773,324 5,975,011 
              
    Stock Compensation Expenses258,214 450,014  749,391 769,790 
    Other1,859,050 1,779,352  5,391,915 5,229,226 
    Total Operating Expenses2,117,264 2,229,366  6,141,306 5,999,016 
              
    Operating Income (Loss)(258,527)(493,268) (1,367,982)(24,005)
              
    Net Income (Loss)(317,055)(398,432) (1,540,272)(48,488)
              
    Income (Loss) per Share         
    Basic & Fully Diluted$(0.05)$(0.07) $(0.25)$(0.01)
              
              
    Weighted Average Common Shares Outstanding         
    Basic & Fully Diluted6,068,419 5,640,473  6,067,165 5,639,015 
              

    Note: The Common Shares in this table reflect shares on a post reverse split basis for all periods presented.

    Conference Call Details
    Date and Time: Wednesday, May 15, 2024, at 5:00pm ET

    Call-in Information: Interested parties can access the conference call by dialing (844) 735-3662 or
    (412) 317-5705.

    Live Webcast Information: Interested parties can access the conference call via a live webcast, which is available at https://app.webinar.net/0e6QBboJvza.

    Replay: A teleconference replay of the call will be available until May 22, 2024, at (877) 344-7529 or (412) 317-0088, replay access code 8743731. A webcast replay will be available at https://app.webinar.net/0e6QBboJvza.

    About Precision Optics Corporation
    Founded in 1982, Precision Optics is a vertically integrated optics company primarily focused on leveraging its proprietary micro-optics and 3D imaging technologies to the healthcare and defense/aerospace industries by providing services ranging from new product concept through mass manufacture. Utilizing its leading-edge in-house design, prototype, regulatory and fabrication capabilities as well as its Lighthouse Imaging division's electronic imaging expertise and its Ross Optical division's high volume world-wide sourcing, inspecting and production resources, the Company designs and manufactures next-generation product solutions for the most challenging customer requirements. Within healthcare, Precision Optics enables next generation medical device companies around the world to meet the increasing demands of the surgical community who require more enhanced and smaller imaging systems for minimally invasive surgery, including single-use medical devices, as well as 3D endoscopy systems to support the rapid proliferation of surgical robotic systems. In addition to these next generation applications, Precision Optics has supplied top tier medical device companies with a wide variety of optical products for decades, including complex endocouplers and specialized endoscopes. The Company is also leveraging its technical proficiency in micro-optics to enable leading edge defense/aerospace applications which require the highest quality standards and the optimization of size, weight and power. For more information, please visit www.poci.com.

    Non-GAAP Financial Measures

    Precision Optics has provided in this press release financial information that has not been prepared in accordance with accounting principles generally accepted in the Unites States of America (“non-GAAP”). The non-GAAP financial measure is Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). Adjusted EBITDA also excludes from Net Income (Loss) the effect of stock-based compensation, restructuring and other acquisition-related items.

    This non-GAAP financial measure assists Precision Optics management in comparing its operating performance over time because certain items may obscure the underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete acquisition or restructuring plans that are fundamentally different from the ongoing productivity of the Company. Precision Optics management also believes that presenting this measure allows investors to view its performance using the same measures that the Company uses in evaluating its financial and business performance and trends.

    Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measure presented above to GAAP results has been provided in the financial tables included with this press release.

    About Forward-Looking Statements
    This press release contains forward-looking statements. Forward-looking statements include, but are not limited to, statements that express the Company's intentions, beliefs, expectations, strategies, predictions or any other statements related to the Company's future activities or future events or conditions. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by the Company's management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous risk factors. Any forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement, except as required by law.

    Company Contact:
    PRECISION OPTICS CORPORATION
    22 East Broadway
    Gardner, Massachusetts 01440-3338
    Telephone: 978-630-1800

    Investor Contact:
    LYTHAM PARTNERS, LLC
    Robert Blum
    Telephone: 602-889-9700
    poci@lythampartners.com

     
    PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (UNAUDITED)
            
     March 31,  June 30, 
     2024  2023 
    ASSETS       
    Current Assets:       
    Cash and cash equivalents$925,067  $2,925,852 
    Accounts receivable, net of allowance for doubtful accounts of $826,434 at March 31, 2024 and $606,715 at June 30, 2023 4,223,769   3,907,407 
    Inventories 3,032,221   2,776,216 
    Prepaid expenses 209,505   249,681 
    Total current assets 8,390,562   9,859,156 
            
    Fixed Assets:       
    Machinery and equipment 3,255,789   3,227,481 
    Leasehold improvements 810,913   788,194 
    Furniture and fixtures 256,681   248,917 
    Construction in progress 233,519   31,506 
      4,556,902   4,296,098 
    Less—Accumulated depreciation and amortization 4,019,164   3,862,578 
    Net fixed assets 537,738   433,520 
            
    Operating lease right-to-use asset 232,930   358,437 
    Patents, net 286,385   265,111 
    Goodwill 8,824,210   8,824,210 
            
    TOTAL ASSETS$18,271,825  $19,740,434 
            
    LIABILITIES AND STOCKHOLDERS’ EQUITY       
    Current Liabilities:       
    Revolving line of credit$400,000  $- 
    Current portion of capital lease obligation 43,301   43,209 
    Current maturities of long-term debt 513,259   513,259 
    Accounts payable 1,695,178   2,432,264 
    Customer advances 1,464,925   1,174,690 
    Accrued compensation and other 833,860   927,521 
    Operating lease liability 175,961   168,677 
    Total current liabilities 5,126,484   5,259,620 
            
    Capital lease obligation, net of current portion 36,226   68,482 
    Long-term debt, net of current maturities and debt issuance costs 1,791,035   2,175,980 
    Operating lease liability, net of current portion 56,969   189,760 
            
    Stockholders’ Equity:       
    Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 6,068,518 shares at March 31, 2024 and 6,066,518 at June 30, 2023 60,685   60,665 
    Additional paid-in capital 60,979,705   60,224,934 
    Accumulated deficit (49,779,279)  (48,239,007)
    Total stockholders’ equity 11,261,111   12,046,592 
            
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$18,271,825  $19,740,434 
            


    PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS
    FOR THE THREE AND NINE MONTHS ENDED
    MARCH 31, 2024 AND 2023
    (UNAUDITED)
                
     Three Months
    Ended March 31,
    		 Nine Months
    Ended March 31,
     2024  2023 2024 2023
    Revenues$5,242,579  $5,048,065  $14,388,123  $16,020,327 
                
    Cost of Goods Sold3,383,842  3,311,967  9,614,799  10,045,316 
    Gross Profit1,858,737  1,736,098  4,773,324  5,975,011 
                
    Research and Development Expenses192,773  206,375  627,259  660,518 
                
    Selling, General and Administrative Expenses1,924,491  2,022,991  5,514,047  5,338,498 
              – 
    Total Operating Expenses2,117,264  2,229,366  6,141,306  5,999,016 
                
    Operating Loss(258,527) (493,268) (1,367,982) (24,005)
                
    Interest Expense(58,528) (48,124) (172,290) (167,443)
    Gain on Revaluation of Contingent Liability   142,960     142,960 
                
    Net Loss$(317,055) $(398,432) $(1,540,272) $(48,488)
                
    Loss Per Share:           
    Basic & Fully Diluted(0.05) $(0.07) (0.25) $(0.01)
                
    Weighted Average Common Shares Outstanding:           
    Basic & Fully Diluted6,068,419  5,640,473  6,067,165  5,639,015 
                


    PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR THE NINE MONTHS ENDED
    MARCH 31, 2024 AND 2023
    (UNAUDITED)
          
     Nine Months
    Ended March 31,
     2024 2023
    Cash Flows from Operating Activities:     
    Net Loss$(1,540,272) $(48,488)
    Adjustments to reconcile net loss to net cash used in by operating activities -     
    Gain on reevaluation of contingent earn-out liability–  (142,960)
    Depreciation and amortization156,586  157,460 
    Stock-based compensation expense749,391  769,790 
    Non-cash interest expense13,128  8,906 
    Changes in operating assets and liabilities -     
    Accounts receivable, net(316,362) (1,726,035)
    Inventories, net(256,005) 120,206 
    Prepaid expenses40,176  (94,215)
    Accounts payable(737,086) 410,073 
    Customer advances290,235  482,693 
    Accrued compensation and other(106,789) 588,976 
    Net cash (used in) provided by operating activities(1,706,998) 526,406 
          
    Cash Flows from Investing Activities:     
    Purchases of fixed assets(260,804) (20,010)
    Additional patent costs(21,274) (32,401)
    Net cash used in investing activities(282,078) (52,411)
          
    Cash Flows from Financing Activities:     
    Payments of capital lease obligations(32,164) (30,298)
    Payments of long-term debt(384,945) (275,784)
    Payment of acquisition earn-out liability   (166,667)
    Borrowings on revolving line of credit400,000    
    Gross proceeds from the exercise of stock options5,400  5,100 
    Net cash used in financing activities(11,709) (467,649)
        – 
    Net (decrease) increase in cash and cash equivalents(2,000,785) 6,346 
    Cash and cash equivalents, beginning of period2,925,852  605,749 
          
    Cash and cash equivalents, end of period$925,067  $612,095 
            


    PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    ADJUSTED EBITDA
                 
      Three Months
    		 Nine Months
      Ended March 31,
    		 Ended March 31,
      2024 2023 2024 2023
    Net Income (loss) (GAAP) $(317,055) $(398,432) $(1,540,272.00) $(48,488)
                 
    Stock based compensation 258,214  450,014  749,391.00  769,790 
                 
    Depreciation and amortization 52,325  52,710  156,586.00  157,460 
                 
    Revaluation of earn-out liability    (142,960)    (142,960)
                 
    Interest expense 58,528  48,124  172,290.00  167,443 
                 
    Adjusted EBITDA (non-GAAP) $52,012  $9,456  $(462,005) $903,245 
                 

     


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