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Precision Optics Reports Fourth Quarter and Fiscal Year 2019 Financial Results

Conference Call Scheduled for today, September 26, 2019 at 5:00pm ET

GARDNER, Mass., Sept. 26, 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 fourth quarter and fiscal year ended June 30, 2019.

Fourth quarter fiscal 2019 highlights:

  • Revenue for the quarter (ended June 30, 2019) was $2.4 million compared to $1.5 million in the same quarter of the previous fiscal year, an increase of 63% driven primarily by an increase in production revenue for medical devices that incorporate the Company's Microprecision™ technology, as well as one month of contribution from Ross Optical.
  • Ross Optical contributed $656,000 to Precision Optics' revenue during the month of June 2019.
  • Production revenue was $912,000 in the quarter, an increase of 18% compared to $770,000 in the same quarter of the previous fiscal year.
  • Gross margins of 36% in the quarter continued to improve sequentially for the second consecutive quarter.
  • Net loss of $109,000 during the quarter included $128,000 of business acquisition expenses and $117,000 of stock-based compensation.

Fiscal year 2019 highlights:

  • Revenue for the fiscal year (ended June 30, 2019) was $6.8 million compared to $4.0 million in the previous fiscal year, an increase of 69%.
  • Production revenue during the fiscal year increased 140% to $3.7 million compared to $1.5 million in the previous fiscal year.
  • Excluding the one-month contribution from Ross Optical, the fiscal year revenue was $6.1 million, an increase of 52% compared to the previous fiscal year.

Pro forma (assuming a full year of Ross Optical) financial highlight:

  • For the 12 months of fiscal year 2019 (ended June 30, 2019), pro forma financial results show a combined organization (Precision Optics and Ross Optical) with $10.5 million in sales and gross margin of approximately 36%.

Precision Optics' CEO, Joseph Forkey, commented, "Our financial results from the fourth quarter and from fiscal year 2019 overall, continue to demonstrate the success of our business model.  By utilizing our proprietary optical technology to develop and manufacture state-of-the art custom medical imaging products, we enable the world's leading medical device companies to bring next generation, minimally invasive devices and 3D surgical robotic systems to market. The transition of a number of these Precision Optics enabled projects to commercialization by our customers drove a 140% increase in production revenues during fiscal 2019. Based on order visibility on currently commercialized products, as well as expected near-term commercialization of products currently in our pipeline, we believe fiscal 2020 should be another strong year for Precision Optics."

Dr. Forkey continued, "Fiscal 2019 was a milestone year for us also because of the acquisition of Ross Optical Industries.  We completed this acquisition – the first ever for Precision Optics - on July 1st.  One of the benefits of the acquisition is that it expands our readily accessible customer base, particularly in the defense industry, where we believe there are opportunities for use of our Microprecision™ micro optics and imaging systems. The acquisition also extends our product offering to include a wider range of lens and optical system sizes, drives economies of scale within our organization, and allows the combined company to leverage our technical proficiency in offering end-to-end solutions to the expansive Ross Optical customer base. We look forward to the many opportunities we believe are available to drive further growth and efficiencies in 2020 and beyond."

The following table summarizes the fourth quarter (unaudited) and year results for the periods ended June 30, 2019 and 2018:


Three Months

Ended June 30,


Year

Ended June 30,


2019


2018


2019


2018

Revenues

$

2,380,406


$

1,460,932


$

6,804,169


$

4,038,048













Gross Profit


848,313



558,801



2,122,478



1,481,918













Stock Compensation Expenses


105,990



10,339



462,093



43,672

Business Acquisition Expenses


128,111



-



128,111



-

Other


722,189



530,145



2,144,817



1,786,865

Total Operating Expenses


956,290



540,484



2,735,021



1,830,537













Operating Income (Loss)


(107,977)



18,317



(612,543)



(348,619)













Net Income (Loss)


(109,155)



16,992



(614,871)



(351,390)













Income (Loss) Per Share:












    Basic and Diluted

$

(0.01)


$

0.00


$

(0.05)


$

(0.04)













Weighted Average Common Shares Outstanding:












    Basic and Diluted


12,061,710



10,131,007



11,486,079



9,826,151


Conference Call Details 
The Company has scheduled a conference call to discuss the fiscal year end and fourth quarter 2019 financial results for Thursday, September 26, 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/2109/31676.

Replay: A teleconference replay of the call will be available until October 3, 2019 at (877) 344-7529 or (412) 317-0088, confirmation #10135010. A webcast replay will be available at https://www.webcaster4.com/Webcast/Page/2109/31676.

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, Microprecision 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 June 30, 2019 and June 30, 2018, and Statements of Operations, Stockholders' Equity and Cash Flows for the years ended June 30, 2019 and 2018:



PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AT JUNE 30,



2019


2018

ASSETS






Current Assets:






   Cash and cash equivalents

$

2,288,426


$

402,738

  Accounts receivable (net of allowance for doubtful accounts of $246,953 at June 30, 2019 and $232,500 at June 30, 2018)


2,165,107



796,923

   Inventories


1,734,604



1,144,068

   Prepaid expenses


180,336



70,991

   Total current assets


6,368,473



2,414,720







Fixed Assets:






   Machinery and equipment


2,748,715



2,511,638

   Leasehold improvements


668,446



553,596

   Furniture and fixtures


168,450



148,303



3,585,611



3,213,537

Less—Accumulated depreciation and amortization


3,202,605



3,164,051

Net fixed assets


383,006



49,486







Patents, net


54,087



47,275

Goodwill


687,664









TOTAL ASSETS

$

7,493,230


$

2,511,481







LIABILITIES AND STOCKHOLDERS' EQUITY






Current Liabilities:






   Current portion of capital lease obligation

$

9,572


$

8,962

   Accounts payable


1,174,263



703,538

   Customer advances


450,192



857,842

   Accrued compensation and other


533,944



362,502

   Amount due for business acquisition


1,443,341



Total current liabilities


3,611,312



1,932,844







Capital lease obligation, net of current portion


5,027



14,601

Acquisition earn out liability


500,000









Stockholders' Equity:






 Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 12,071,139 shares at June 30, 2019 and 10,197,139 shares at June 30, 2018


120,712



101,972

   Additional paid-in capital


48,893,172



45,484,186

   Accumulated deficit


(45,636,993)



(45,022,122)

   Total stockholders' equity


3,376,891



564,036







TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

7,493,230


$

2,511,481

 




PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED JUNE 30,



2019


2018





Revenues

$

6,804,169


$

4,038,048

Cost of goods sold


4,681,691



2,556,130







Gross profit


2,122,478



1,481,918







Research and development expenses, net


505,300



456,377

Selling, general and administrative expenses


2,101,610



1,374,160

Business acquisition expenses


128,111



Total operating expenses


2,735,021



1,830,537







   Operating loss


(612,543)



(348,619)







Interest expense


(1,416)



(1,859)







   Loss before provision for income taxes


(613,959)



(350,478)







Provision for income taxes


912



912







Net loss

$

(614,871)


$

(351,390)







Loss per share:






Basic and fully diluted

$

(0.05)


$

(0.04)







Weighted average common shares outstanding:






Basic and fully diluted


11,486,079



9,826,151

 




PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED JUNE 30,



Number of
Shares


Common
Stock


Additional
Paid-in
Capital


Accumulated
Deficit


Total
Stockholders'
Equity











Balance, July 1, 2017


8,872,916


$

88,729


$

45,140,383


$

(44,670,732)


$

558,380

Proceeds from private placement of common stock, net of issuance costs of $2,963


555,556



5,556



241,482





247,038

Proceeds from exercise of stock purchase warrants


666,667



6,667







6,667

Issuance of common stock for consulting services


102,000



1,020



49,980





51,000

Stock-based compensation






52,341





52,341

Net loss








(351,390)



(351,390)

Balance, June 30, 2018


10,197,139


$

101,972


$

45,484,186


$

(45,022,122)


$

564,036
















Proceeds from private placement of common stock, net of issuance costs of $12,250


1,600,000



16,000



1,971,750





1,987,750

Proceeds from exercise of stock options


74,000



740



53,160





53,900

Issuance of common stock for services


200,000



2,000



208,000





210,000

Proceeds from private placement of common stock subscribed, net of estimated issuance costs of $12,250






912,750





912,750

Stock-based compensation






263,326





263,326

Net loss








(614,871)



(614,871)

Balance, June 30, 2019


12,071,139


$

120,712


$

48,893,172


$

(45,636,993)


$

3,376,891

 




PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30,



2019


2018

Cash Flows from Operating Activities:






   Net loss

$

(614,871)


$

(351,390)

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






    Depreciation and amortization


38,554



27,216

    Provision for doubtful accounts receivable


8,083



227,500

    Stock-based compensation expense


473,326



52,341

    Non-cash consulting expense




2,400

    Changes in operating assets and liabilities, net of effects of business acquisition-






     Accounts receivable


(723,369)



(555,875)

     Inventories


137,510



(88,621)

     Prepaid expenses


(106,456)



(15,006)

     Accounts payable


69,365



48,580

     Customer advances


(432,000)



677,705

     Accrued compensation and other


118,165



75,807

Net cash provided by (used in) operating activities


(1,031,693)



100,657







Cash Flows from Investing Activities:






     Cash acquired in business acquisition, net of $56,659 paid at year end


106,545



     Additional patent costs


(6,812)



(17,189)

     Purchases of fixed assets


(140,038)



(4,448)

Net cash used in investing activities


(40,305)



(21,637)







Cash Flows from Financing Activities:






    Payment of capital lease obligation


(8,964)



(8,392)

    Gross proceeds from private placements of common stock


2,925,000



210,001

    Gross proceeds from exercise of stock options and warrants


53,900



6,667

    Private placement expenses paid


(12,250)



(2,963)

Net cash provided by financing activities


2,957,686



205,313







Net increase in cash and cash equivalents


1,885,688



284,333

Cash and cash equivalents, beginning of year


402,738



118,405







Cash and cash equivalents, end of year

$

2,288,426


$

402,738







Supplemental disclosure of cash flow information:






Cash paid during the year for income taxes

$

912


$

912







Supplemental disclosure of non-cash financing activities:






Issuance of common stock for services

$

210,000


$

51,000

Private placement expenses incurred but not yet paid

$

12,250


$

Issuance of common stock in settlement of accounts payable

$


$

40,000

 

Cision

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