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Precision Optics Reports Third Quarter Fiscal Year 2024 Financial Results

Precision Optics Corporation
Precision Optics Corporation

Conference Call Scheduled for today, May 15, 2024, at 5:00pm ET

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.

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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,

 

2024

2023

 

2024

2023

Revenues

$

5,242,579

 

$

5,048,065

 

 

$

14,388,123

 

$

16,020,327

 

Gross Profit

1,858,737

 

1,736,098

 

 

4,773,324

 

5,975,011

 

 

 

 

 

 

 

 

 

 

 

Stock Compensation Expenses

258,214

 

450,014

 

 

749,391

 

769,790

 

Other

1,859,050

 

1,779,352

 

 

5,391,915

 

5,229,226

 

Total Operating Expenses

2,117,264

 

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 Diluted

6,068,419

 

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 Sold

3,383,842

 

 

3,311,967

 

 

9,614,799

 

 

10,045,316

 

Gross Profit

1,858,737

 

 

1,736,098

 

 

4,773,324

 

 

5,975,011

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and Development Expenses

192,773

 

 

206,375

 

 

627,259

 

 

660,518

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses

1,924,491

 

 

2,022,991

 

 

5,514,047

 

 

5,338,498

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

2,117,264

 

 

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 Diluted

6,068,419

 

 

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 amortization

156,586

 

 

157,460

 

Stock-based compensation expense

749,391

 

 

769,790

 

Non-cash interest expense

13,128

 

 

8,906

 

Changes in operating assets and liabilities -

 

 

 

 

 

Accounts receivable, net

(316,362

)

 

(1,726,035

)

Inventories, net

(256,005

)

 

120,206

 

Prepaid expenses

40,176

 

 

(94,215

)

Accounts payable

(737,086

)

 

410,073

 

Customer advances

290,235

 

 

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 credit

400,000

 

 

 

 

Gross proceeds from the exercise of stock options

5,400

 

 

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 period

2,925,852

 

 

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