GARDNER, Mass., May 15, 2024 — 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, | ||||||||||||
| 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 |
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| ADJUSTED EBITDA |
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| 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 | |||||||
