GARDNER, Mass., Sept. 30, 2024 (GLOBE NEWSWIRE) — Precision Optics Corporation, Inc. (NASDAQ: POCI), a leading designer and manufacturer of advanced optical instruments for the medical and defense/aerospace industries, announced operating results on an unaudited basis for its fourth quarter and fiscal year ended June 30, 2024.
FY 2024 Financial Highlights (Year Ended June 30, 2024):
Revenue was $19.1 million compared to $21.0 million in the previous fiscal year. Revenue of $19.1 million, exceeded the high end of the expected range announced on August 14, 2024 of $18.9 million.Production revenue was $10.8 million, a decrease of 25% compared to the previous fiscal year.Engineering revenue was a record $8.3 million, an increase of 24% compared to the previous fiscal year.Gross margin was 30.3% compared to 36.8% in the previous fiscal year, which included a one-time sale of $600,000 in technology rights relating to a single-use medical device..Net loss was ($3.0) million which compared to net loss of ($0.1) million in the previous year.Adjusted EBITDA, defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation and other income, was $(1.6) million, compared to $0.5 million in the previous fiscal year.
Q4 FY2024 Financial Highlights (3 Months Ended June 30, 2024):
Revenue was $4.7 million compared to $5.0 million in the same quarter of the previous fiscal year. Revenue of $4.7 million exceeded the implied high end of the range we announced on August 14, 2024 of 4.5 million.Engineering revenue was $1.9 million compared to $1.4 million in the same quarter of the previous fiscal year.Production revenue was $2.8 million compared to $3.6 million in the same quarter of the previous fiscal year.Gross margins were 21.7% compared to 35.0% in the same quarter of the previous year.Net loss for the quarter was ($1.4) million, compared to $(0.1) million in the same quarter of the previous year.Adjusted EBITDA was $(1.1) million for the quarter compared to $(0.4) million in the same quarter of the previous year.
Recent Additional Highlights:
In May 2024, the Company announced the receipt of a $9 million production order for a high volume single-use cystoscopy surgery program. The program began production shipments of product in July, 2024.Subsequent to the end of the fiscal year, in August 2024 the Company announced a closing of a $1.4 million registered direct offering of common stock, which included participation from directors and officers.
Precision Optics’ CEO, Joseph Forkey, commented, “Upon exiting fiscal 2023, we were facing the loss of several significant programs that would not be continuing in fiscal 2024, totaling more than $7 million in annualized revenue. Due to the strength of our engineering pipeline, we backfilled a significant portion of the shortfall with record levels of product development revenue coupled with new products entering production. Currently several programs are transitioning from the development phase to production, including the program associated with the $9 million purchase order we announced in May. We have now reached a new phase for the Company, with a sizeable and growing base of production programs and product development revenue continuing at the record levels we achieved last year.”
“As we look forward to fiscal 2025, we expect our first quarter revenue will be in the range of $4.2 to $4.4 million, relatively flat compared to the previous year’s first quarter. Revenue for the first quarter was impacted by certain challenges in the start-up and ramp of key production programs. However, these issues are mostly now resolved, and with the growth of production and ongoing strong product development sales, we expect double digit revenue growth for fiscal 2025 with significant increases in revenue beginning with the second quarter of fiscal 2025,” Dr. Forkey concluded.
The following table summarizes the fourth quarter (unaudited) and fiscal year to date results for the periods ended June 30, 2024, and 2023:
Three Months Year Ended June 30 Ended June 30 20242023 20242023Revenues$4,716,226 $5,024,140 $19,104,350 $21,044,467 Gross Profit 1,024,451 1,934,945 5,797,777 7,909,956 Stock Compensation Expenses 210,393 139,686 959,784 884,066 Other 2,170,410 2,407,733 7,562,326 7,664,437 Total Operating Expenses 2,380,803 2,547,419 8,522,110 8,548,503 Operating Income (Loss) (1,356,352) (612,475) (2,724,333) (638,548) Net Income (Loss) (1,411,106) (96,125) (2,951,377) (144,613) Income (Loss) per Share Basic & Fully Diluted$(0.23)$(0.02) $(0.49)$(0.03) Weighted Average Common Shares Outstanding Basic & Fully Diluted 6,071,846 5,666,034 6,068,329 5,666,034
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: Monday, September 30, 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/0Aa98ozwG53.
Replay: A teleconference replay of the call will be available until October 3, 2024, at (877) 344-7529 or (412) 317-0088, replay access code 7367981. A webcast replay will be available at https://app.webinar.net/0Aa98ozwG53.
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, 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
Telephone: 602-889-9700
poci@lythampartners.com
PRECISION OPTICS CORPORATION, INC.
Consolidated Balance Sheets at June 30, 2024 and 2023 2024 2023 ASSETS Current Assets: Cash and cash equivalents $405,278 $2,925,852 Accounts receivable, net of allowance for credit losses of $118,872 at June 30, 2024 and $606,715 at June 30, 2023 3,545,491 3,907,407 Inventories 2,868,100 2,776,216 Prepaid expenses 299,364 249,681 Total current assets 7,118,233 9,859,156 Fixed Assets: Machinery and equipment 3,341,194 3,227,481 Leasehold improvements 810,914 825,752 Furniture and fixtures 416,425 242,865 4,568,533 4,296,098 Less—Accumulated depreciation and amortization 4,074,960 3,862,578 Net fixed assets 493,573 433,520 Operating lease right-of-use asset 189,999 358,437 Patents, net 286,559 265,111 Goodwill 8,824,210 8,824,210 TOTAL ASSETS $16,912,574 $19,740,434 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Revolving line of credit $1,000,000 $- Current portion of capital lease obligation 41,113 43,209 Current maturities of long-term debt 276,928 513,259 Accounts payable 1,397,313 2,432,264 Customer advances 1,172,350 1,174,690 Accrued compensation and other 840,662 927,521 Operating lease liability 178,450 168,677 Total current liabilities 4,906,816 5,259,620 Capital lease obligation, net of current portion 27,369 68,482 Long-term debt, net of current maturities 1,899,052 2,175,980 Operating lease liability, net of current portion 11,549 189,760 Stockholders’ Equity: Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 6,073,939 shares at June 30, 2024 and 6,066,518 shares at June 30, 2023 60,739 60,665 Additional paid-in capital 61,197,433 60,224,934 Accumulated deficit (51,190,384) (48,239,007)Total stockholders’ equity 10,067,788 12,046,592 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $16,912,574 $19,740,434 PRECISION OPTICS CORPORATION, INC.
Consolidated Statements of Operations
for the Years Ended June 30, 2024 and 2023 2024 2023 Revenues $19,104,350 $21,044,467 Cost of goods sold 13,306,573 13,310,331 Gross profit 5,797,777 7,734,136 Research and development expenses, net 981,781 992,375 Selling, general and administrative expenses 7,540,329 7,380,309 Total operating expenses 8,522,110 8,372,684 Operating loss (2,724,333) (638,548) Other income (expense) Interest expense (225,108) (218,927)Gain on revaluation of contingent earn-out liability – 714,798 Loss before provision for income taxes (2,949,441) (142,677) Provision for income taxes 1,936 1,936 Net loss $(2,951,377) $(144,613) Loss per share: Basic and fully diluted $(0.49) $(0.03) Weighted average common shares outstanding: Basic and fully diluted 6,068,329 5,666,034 PRECISION OPTICS CORPORATION, INC.
Consolidated Statements of Cash Flows
For the Years Ended June 30, 2024 and 2023 2024 2023 Cash Flows from Operating Activities: Net loss $(2,951,377) $(144,613)Adjustments to reconcile net loss to net cash (used in) provided by operating activities- Gain on revaluation of contingent earn-out liability – (705,892)Depreciation and amortization 212,382 210,735 Stock-based compensation expense 959,784 919,032 Non-cash interest expense 17,504 4,087 Changes in operating assets and liabilities: Accounts receivable, net 361,916 (1,243,535)Inventories (91,884) 245,931 Prepaid expenses (49,683) (36,233)Accounts payable (1,034,951) 193,089 Customer advances (2,340) 269,577 Accrued compensation and other (104,363) 206,732 Net cash used in operating activities (2,683,012) (81,090) Cash Flows from Investing Activities: Additional patent costs (21,448) (35,713)Purchases of property and equipment (272,435) (16,784)Net cash used in investing activities (293,883) (52,497) Cash Flows from Financing Activities: Payment of capital lease obligations (43,209) (40,705)Payments of long-term debt (513,259) (367,341)Issuance of long-term debt – 750,000 Payment of debt issuance costs – (22,275)Payment of acquisition earn-out liability – (166,667)Borrowings on revolving line of credit 1,000,000 Gross proceeds from private placements of common stock – 2,288,281 Gross proceeds from exercise of stock options 12,789 12,397 Net cash provided by financing activities 456,321 2,453,690 Net increase (decrease) in cash and cash equivalents (2,520,574) 2,320,103 Cash and cash equivalents, beginning of year 2,925,852 605,749 Cash and cash equivalents, end of year $405,278 $2,925,852 Supplemental disclosure of cash flow information: Cash paid during the year for income taxes $1,936 $1,936 PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURESADJUSTED EBITDA Three Months YearEnded June 30,Ended June 30, 2024 2023 2024 2023Net Income (loss) (GAAP) $(1,411,106) $(96,125) $(2,951,377) $(144,613) Stock based compensation 210,393 149,242 959,784 919,032 Depreciation and amortization 55,796 53,442 212,382 218,927 State Income Taxes 1,936 1,936 1,936 1,936 Revaluation of earn-out liability – (571,838) – (714,798) Interest expense 52,818 53,552 225,108 210,735 Adjusted EBITDA (non-GAAP) $(1,090,163) $(409,791) $(1,552,167) $491,219