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Precision Optics Reports First Quarter Fiscal Year 2020 Financial Results

Conference Call Scheduled for today, November 14, 2019 at 5:00pm ET

GARDNER, Mass., Nov. 14, 2019 /PRNewswire/ -- Precision Optics Corporation, Inc. (PEYE), a leading designer and manufacturer of advanced optical instruments for the medical and defense industries, announced operating results on an unaudited basis for its first quarter fiscal year ended September 30, 2019.

First quarter fiscal 2020 highlights:

  • Revenue for the quarter (ended September 30, 2019) was $2.5 million compared to $1.6 million in the same quarter of the previous fiscal year, an increase of 61% driven primarily by Ross Optical operating as a division of Precision Optics.
  • Gross margins of 39% compared to 30% in the same quarter of the prior year, and sequentially improved for the third consecutive quarter.
  • Net loss of $86,000 during the quarter included $122,000 of stock-based compensation and service fees.

Precision Optics' CEO, Joseph Forkey, commented, "The first quarter financial results highlight the positive impact of our evolving capabilities, which now include Ross Optical, resulting in a year-over-year revenue increase of 61% and positive operating cash flow. During the quarter, we continued deliveries of the three products that went into commercial level production last year and we expect our expanding pipeline of Precision Optics-enabled products to allow for ongoing growth. Our business strategy of enabling leading medical device companies around the world to meet the increasing demands of the surgical community, who are requiring more enhanced and smaller imaging systems for minimally invasive surgery, as well as the rapid proliferation of 3D endoscopes for surgical robotic systems, continues to gain traction."

Dr. Forkey continued, "As we look to the remainder of fiscal 2020, we expect growth from the production of currently commercialized products while continuing to advance our pipeline of engineering projects toward commercialization. Further, we look to build upon the improvements we achieved during the first quarter, where overall gross margins were 39% compared to 30% a year ago. We are working to improve gross margins on our base business and are benefitting from the higher margin profile of Ross Optical. Overall, we maintain a disciplined investment strategy in sales and marketing and engineering capabilities to fuel growth while generating positive cash flows."

The following table summarizes the first quarter (unaudited) results for the periods ended September 30, 2019 and 2018:



Three Months Ended

September 30,



2019



2018


Revenues


$

2,514,984



$

1,559,458











Gross Profit



974,117




462,507











Operating Expenses



1,059,999




761,287











Net Loss



(86,110)




(299,285)











Loss Per Share:









 Basic and Diluted


$

(0.01)



$

(0.03)











Weighted Average Common Shares Outstanding:









 Basic and Diluted



12,832,389




10,261,269












Conference Call Details
The Company has scheduled a conference call to discuss the first quarter 2020 financial results for Thursday, November 14, 2019 at 5:00 p.m. EDT.

Call-in Information: Interested parties can access the conference call by dialing (877) 317-6789 or (412) 317-6789.

Live Webcast Information: Interested parties can access the conference call via a live Internet webcast, which is available at https://www.webcaster4.com/Webcast/Page/2109/32176

Replay: A teleconference replay of the call will be available until November 21, 2019 at (877) 344-7529 or (412) 317-0088 confirmation #10136579. A webcast replay will be available at https://www.webcaster4.com/Webcast/Page/2109/32176

About Precision Optics Corporation
Precision Optics Corporation enables innovation in minimally invasive surgery, diagnostics and treatment through optics and photonics. Precision Optics Corporation has been a leading developer and manufacturer of advanced optical instruments since 1982. Using proprietary optical technologies, the Company designs and produces next generation medical instruments, MicroprecisionTM micro-optics with characteristic dimensions less than 1 millimeter, and other advanced optical systems for market-leading medical device companies. The Company's innovative medical instrumentation line includes state-of-the-art endoscopes and endocouplers as well as custom illumination and imaging products for use in minimally invasive surgical procedures. The Company believes that current advances in its proprietary micro-optics and 3D imaging technologies present significant opportunities for expanding applications to numerous potential medical products and procedures. The Company's website is www.poci.com. Investors can find Real-Time Quotes and market information for the Company on www.otcmarkets.com/stock/PEYE/quote.

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 performances 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 factors, including those risks discussed in the Company's annual report on Form 10-K and in other documents that we file from time to time with the SEC. 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
Phoenix | New York
Telephone: 602-889-9700
peye@lythampartners.com

Following are the Company's Consolidated Balance Sheets at September 30, 2019 and June 30, 2019, and Statements of Operations, Stockholders' Equity and Cash Flows for the three month periods ended September 30, 2019 and 2018:

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




September 30, 2019



June 30, 
2019


ASSETS









Current Assets:









Cash and cash equivalents


$

849,135



$

2,288,426


Accounts receivable (net of allowance for doubtful accounts of $246,201 and $246,953 at September 30, 2019 and June 30, 2019, respectively)



1,645,765




2,165,107


Inventories



2,071,852




1,734,604


Prepaid expenses



181,106




180,336


Total current assets



4,747,858




6,368,473











Fixed Assets:









Machinery and equipment



2,755,076




2,748,715


Leasehold improvements



683,970




668,446


Furniture and fixtures



168,450




168,450





3,607,496




3,585,611


Less—Accumulated depreciation and amortization



3,225,525




3,202,605


Net fixed assets



381,971




383,006











Operating lease right-to-use asset



158,690




-


Patents, net



60,841




54,087


Goodwill



687,664




687,664











TOTAL ASSETS


$

6,037,024



$

7,493,230











LIABILITIES AND STOCKHOLDERS' EQUITY









Current Liabilities:









Current portion of capital lease obligation


$

9,731



$

9,572


Accounts payable



1,036,188




1,174,263


Customer advances



513,623




450,192


Accrued compensation and other



370,296




533,944


Amount due for business acquisition



-




1,443,341


   Operating lease liability



54,310




-


Total current liabilities



1,984,148




3,611,312











Capital lease obligation, net of current portion



2,535




5,027


Acquisition earn out liability



500,000




500,000


Operating lease liability



104,380




-











Stockholders' Equity:









Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 12,868,639 shares at September 30, 2019 and 12,071,139 shares at June 30, 2019



128,687




120,712


Additional paid-in capital



49,040,377




48,893,172


Accumulated deficit



(45,723,103)




(45,636,993)


Total stockholders' equity



3,445,961




3,376,891











TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

6,037,024



$

7,493,230


 

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30,




Three Months
Ended September 30,




2019



2018


Revenues


$

2,514,984



$

1,559,458











Cost of Goods Sold



1,540,867




1,096,951


Gross Profit



974,117




462,507











Research and Development Expenses, net



152,154




100,798











Selling, General and Administrative Expenses



907,845




660,489


Total Operating Expenses



1,059,999




761,287











Operating Loss



(85,882)




(298,780)











Interest Expense



(228)




(505)











Net Loss


$

(86,110)



$

(299,285)











Loss Per Share:









Basic and Diluted


$

(0.01)



$

(0.03)











Weighted Average Common Shares Outstanding:









Basic and Diluted



12,832,389




10,261,269


 

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


FOR THE THREE MONTHS ENDED SEPTEMBER 30,






Three Month Period Ended September 30, 2019




Number of
Shares



Common
Stock



Additional
Paid-in
Capital



Accumulated
Deficit



Total
Stockholders'
Equity


















Balance, July 1, 2019



12,071,139



$

120,712



$

48,893,172



$

(45,636,993)



$

3,376,891


Issuance of common stock in private placement



760,000




7,600




17,400







25,000


Proceeds from exercise of stock options



12,500




125




8,550







8,675


Issuance of common stock for services



25,000




250




44,750







45,000























Stock-based compensation









76,505







76,505


Net loss












(86,110)




(86,110)


Balance, September 30, 2019



12,868,639



$

128,687



$

49,040,377



$

(45,723,103)



$

3,445,961





Three Month Period Ended September 30, 2018




Number of
Shares



Common
Stock



Additional
Paid-in
Capital



Accumulated
Deficit



Total
Stockholders'
Equity


















Balance, July 1, 2018



10,197,139



$

101,972



$

45,484,186



$

(45,022,122)



$

564,036


Issuance of common stock for services



100,000




1,000




(1,000)








Stock-based compensation









342,984







342,984


Net loss












(299,285)




(299,285)


Balance, September 30, 2018



10,297,139



$

102,972



$

45,826,170



$

(45,321,407)



$

607,735


 

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE THREE MONTHS ENDED SEPTEMBER 30,






Three Months
Ended September 30,




2019



2018


Cash Flows from Operating Activities:









Net Loss


$

(86,110)



$

(299,285)


Adjustments to reconcile net loss to net cash provided from (used in) operating activities -









Depreciation and amortization



22,920




6,956


Stock-based compensation expense



76,505




342,984


Non-cash consulting expense



45,000





Changes in operating assets and liabilities -









Accounts receivable, net



519,342




141,203


Inventories, net



(337,248)




30,450


Prepaid expenses



(770)




13,124


Accounts payable



(138,075)




260,043


Customer advances



63,431




(457,138)


Accrued liabilities



(163,648)




(44,767)


Net cash provided by (used in) operating activities



1,347




(6,430)











Cash Flows from Investing Activities:









Cash paid for business acquisition



(1,443,341)





Purchases of fixed assets



(21,885)




(42,809)


   Additional patent costs



(6,754)





Net cash used in investing activities



(1,471,980)




(42,809)











Cash Flows from Financing Activities:









Payment of capital lease obligation



(2,333)




(2,185)


Gross proceeds from exercise of stock options



8,675





Gross Proceeds from private placement of common stock



25,000





Net cash provided from (used in) financing activities



31,342




(2,185)











Net decrease in cash and cash equivalents



(1,439,291)




(51,424)


Cash and cash equivalents, beginning of period



2,288,426




402,738











Cash and cash equivalents, end of period


$

849,135



$

351,314











Supplemental disclosure of non-cash financing activities:









Offering costs included in accrued compensation and other


$

12,250



$


 

 

Cision

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