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Precision Optics Corporation, Inc. Announces Operating Results for the First Quarter of Fiscal Year 2019 Ended September 30, 2018

GARDNER, Ma., Nov. 14, 2018 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. (OTCQB: PEYE) (the “Company”) today announced operating results on an unaudited basis for its first quarter ended September 30, 2018.

First quarter highlights include:

  • Revenues of $1,559,000 compared to $1,029,000 in the first quarter of fiscal 2018, representing 52% growth;

  • Quarter-over-quarter revenue increase of 7% compared to fourth quarter fiscal 2018 revenue of $1,461,000;

  • Non-cash stock-based compensation expense of $343,000 contributing to net loss of $299,000;

  • Non-GAAP net income of $44,000 before non-cash stock based compensation expense;

  • 30% gross margin compared to 38% in the first quarter of fiscal 2018;

  • $2 million capital funding completed in October 2018.

Precision Optics’ CEO, Joseph Forkey, commented, “We are pleased with our first quarter revenue performance.  In our fourth quarter earnings release, we anticipated a similar revenue level in the first quarter.  We comfortably passed that expectation.  Our margins were impacted by start-up costs relating to two key customer programs.  This is not unusual as programs ramp to higher volumes, and we expect margins to return to recent higher levels in the near-term.  We also had an unusually high level of non-cash stock-based compensation expense in the quarter due to the improvement in our stock price and recent compensation changes.  Without the effects of these non-recurring stock-based compensation charges, we had a profitable quarter.  As we work through the program start-up cost issues, we believe we are on track to substantially improve profitability, even before considering the impact of additional growth.”

Dr. Forkey continued, “The market for our technologies and products is strong.  Demand for engineering services is robust, and we continue to add new programs to our engineering project pipeline.  This is a very positive indicator of the long-term prospects for the business.  Ongoing expansion of medical procedures in specialties that benefit from small size instruments, such as urology, cardiology, ophthalmology, neurology and others, are supporting an increasing market for our Microprecision™ products.  The substantial increase in number and size of companies in the robotic surgery space is increasing interest in our 3D endoscope technology.  In order to capitalize on these market opportunities, we raised $2 million of capital in October.  With these added resources, we will prudently invest in our business to increase our ability to capture more opportunities from these expanding markets, and to build engineering and production capacity to continue technology development and to efficiently handle greater production volumes from existing and new products.  We believe that the recent transition of development projects into production, that has driven our recent increase in revenues, combined with these new initiatives, puts us in a strong position for long-term growth.”

The following table summarizes the first quarter results for the periods ended September 30, 2018 and 2017 (unaudited):

 
  Three Months Ended
September 30,
  
  2018  2017  
Revenues $1,559,458  $1,028,746  
          
Gross Profit  462,507   386,742  
          
Operating Expenses  761,287   415,011  
          
Net Loss  (299,285)  (28,785) 
          
Loss Per Share:         
 Basic $(0.03) $0.00  
 Diluted $(0.00) $0.00  
          
Weighted Average Common Shares Outstanding:         
 Basic and Diluted  10,261,269   9,108,423  
 

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the fiscal first quarter 2019 financial results for Thursday, November 15, 2018 at 5:00 PM Eastern Time. To participate in the conference call, please dial 1-844-826-3042 toll free from the U.S., or 1-412-317-5187 for international callers, and ask to be connected to the Precision Optics conference call.

An audio replay of the conference call will be available approximately one hour after the conclusion of the call and will be made available until November 21, 2018. The audio replay can be accessed by dialing 1-877-344-7529 toll free from the U.S., or 1-412-317-0088 for international callers, and enter conference ID number 10126184.

About Precision Optics Corporation
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 a broad range of customers including some of the largest global 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 to reflect events or circumstances after the date of this report, except as required by law.   


Following are the Company’s consolidated balance sheets as of September 30, 2018 and June 30, 2018, and statements of operations for the three months ended September 30, 2018 and 2017 and statements of cash flows for the three months ended September 30, 2018 and 2017 (unaudited):

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

  September 30,
2018
  June 30,
2018
 
ASSETS        
CURRENT ASSETS        
Cash and Cash Equivalents $351,314  $402,738 
Accounts Receivable, net  655,720   796,923 
Inventories, net  1,113,618   1,144,068 
Prepaid Expenses  57,867   70,991 
Total Current Assets  2,178,519   2,414,720 
PROPERTY AND EQUIPMENT        
Machinery and Equipment  2,553,207   2,511,638 
Leasehold Improvements  554,836   553,596 
Furniture and Fixtures  148,303   148,303 
   3,256,346   3,213,537 
         
Less: Accumulated Depreciation and Amortization  (3,171,007)  (3,164,051)
Net Fixed Assets  85,339   49,486 
         
Patents, net  47,275   47,275 
         
TOTAL ASSETS $2,311,133  $2,511,481 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
CURRENT LIABILITIES        
Current Portion of Capital Lease Obligation $9,111  $8,962 
Accounts Payable  963,581   703,538 
Customer Advances  400,704   857,842 
Accrued Employee Compensation  197,765   238,590 
Accrued Professional Services  94,970   98,000 
Accrued Warranty Expense  25,000   25,000 
Other Accrued Liabilities  -   912 
Total Current Liabilities  1,691,131   1,932,844 
         
Capital Lease Obligation, net of current portion  12,267   14,601 
         
STOCKHOLDERS’ EQUITY        
Common Stock, $0.01 par value - Authorized - 50,000,000 shares; Issued
   and Outstanding – 10,297,139 shares at September 30, 2018 and
   10,197,139 shares at June 30, 2018
  102,972   101,972 
Additional Paid-in Capital  45,826,170   45,484,186 
Accumulated Deficit  (45,321,407)  (45,022,122)
Total Stockholders’ Equity  607,735   564,036 
         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $2,311,133  $2,511,481 


PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2018 AND 2017
(UNAUDITED)

  Three Months
Ended September 30,
 
  2018  2017 
Revenues $1,559,458  $1,028,746 
         
Cost of Goods Sold  1,096,951   642,004 
Gross Profit  462,507   386,742 
         
Research and Development Expenses, net  100,798   118,427 
         
Selling, General and Administrative Expenses  660,489   296,584 
Total Operating Expenses  761,287   415,011 
         
Operating Loss  (298,780)  (28,269)
         
Interest Expense  (505)  (516)
         
Net Loss $(299,285) $(28,785)
         
Loss Per Share:        
Basic $(0.03) $(0.00)
Diluted $(0.03) $(0.00)
         
Weighted Average Common Shares Outstanding:        
Basic  10,261,269   9,108,423 
Diluted  10,261,269   9,108,423 
         


PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2018 AND 2017
(UNAUDITED)

  Three Months
Ended September 30,
 
  2018  2017 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net Loss $(299,285) $(28,785)
Adjustments to Reconcile Net Loss to Net Cash Provided From (Used In)
   Operating Activities -
        
Depreciation and Amortization  6,956   8,750 
Stock-based Compensation Expense  342,984   26,057 
Non-cash Consulting Expense     (7,425)
Changes in Operating Assets and Liabilities -        
Accounts Receivable, net  141,203   (145,413)
Inventories, net  30,450   88,162 
Prepaid Expenses  13,124   4,591 
Accounts Payable  260,043   5,381 
Customer Advances  (457,138)  (57,642)
Accrued Liabilities  (44,767)  (25,322)
Net Cash Used In Operating Activities  (6,430)  (131,646)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of Property and Equipment  (42,809   
Net Cash Used In Investing Activities  (42,809   
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Payment of Capital Lease Obligation  (2,185)  (2,046)
Gross Proceeds from Private Placement of Common Stock     210,001 
Net Cash Provided From (Used In) Financing Activities  (2,185  207,955 
         
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  (51,424  76,309 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  402,738   118,405 
         
CASH AND CASH EQUIVALENTS, END OF PERIOD $351,314  $194,714 
         
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND
   INVESTING ACTIVITIES:
        
Issuance of Common Stock in Settlement of Accounts Payable $  $40,000 
Offering Costs Included in Accounts Payable $  $2,963 
 

Wednesday, November 14, 2018 - 16:45