Company Overview: Precision Optics Corporation, Inc. Announces Operating Results for the First Quarter of Fiscal Year 2018 Ended September 30, 2017

About the Company

Precision Optics Corporation, Inc. Announces Operating Results for the First Quarter of Fiscal Year 2018 Ended September 30, 2017

GARDNER, Mass., Nov. 14, 2017 (GLOBE NEWSWIRE) — Precision Optics Corporation, Inc. (PEYE) (the “Company”) today announced operating results on an unaudited basis for its first quarter ended September 30, 2017.

First quarter highlights include:

  • Revenues of $1,029,000 compared to $850,000 in the first quarter of fiscal 2017;
  • 37.6% gross margin compared to 19.7% in the first quarter of fiscal 2017;
  • Net loss of $29,000 compared to net loss of $293,000 in the first quarter of fiscal 2017; and
  • Across the board improved margins on engineering and production projects during the quarter.

Commenting on the first quarter results, Joseph Forkey, Company CEO said, “Revenues continued their up and down trend this quarter with an increase of $179,000 or 21% compared to the same quarter last year.  Strong project-by-project margins and control of other non-production expenses resulted in significant improvements in gross margin and overall operating loss for the quarter. These results demonstrate the effectiveness of our concerted efforts to increase efficiencies both in production and in overall operations.”

Dr. Forkey continued, “Demand for our unique Microprecision™ technology capabilities remains strong and we expect certain projects to transition from engineering and prototype work to production orders in the near term. Our steadily improving financial performance at the current level of sales reinforces our on-going belief that moderate increases in sales from the current levels will result in further improved financial performance. Our current pipeline of engineering service projects remains strong as existing and new customers look to Precision Optics to assist them with the design, development, and manufacture of medical-grade cameras and endoscopes based on CMOS and other micro imaging and illumination technologies.”

The following table summarizes the first quarter results for the periods ended September 30, 2017 and 2016 (unaudited):

  Three Months Ended
September 30,
  2017     2016  
Revenues $ 1,028,746 $ 849,548
Gross Profit 386,742 167,051
Operating Expenses 415,011 460,459
Net Loss (28,785 ) (293,408 )
Loss Per Share:
Basic $ (0.00 ) $ (0.04 )
Diluted $ (0.00 ) $ (0.04 )
Weighted Average Common Shares Outstanding:
Basic and Diluted 9,108,423 7,539,582

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the fiscal first quarter 2017 financial results for Tuesday, November 14, 2017 at 5:00 PM Eastern. 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 28, 2017. 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 10114363.

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, MicroprecisionTM 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, 2017 and June 30, 2016, and statements of operations for the three months ended September 30, 2017 and 2016 and statements of cash flows for the three months ended September 30, 2017 and 2016 (unaudited):

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
  September 30,
2017
    June 30,
2017
 
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 194,714 $ 118,405
Accounts Receivable, net 613,961 468,548
Inventories, net 967,285 1,055,447
Prepaid Expenses 51,394 55,985
Total Current Assets 1,827,354 1,698,385
PROPERTY AND EQUIPMENT
Machinery and Equipment 2,507,190 2,507,190
Leasehold Improvements 553,596 553,596
Furniture and Fixtures 148,303 148,303
3,209,089 3,209,089
Less: Accumulated Depreciation and Amortization (3,145,585 ) (3,136,835 )
Net Fixed Assets 63,504 72,254
Patents, net 30,086 30,086
TOTAL ASSETS $ 1,920,944 $ 1,800,725
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current Portion of Capital Lease Obligation $ 8,531 $ 8,391
Accounts Payable 663,302 694,958
Customer Advances 122,495 180,137
Accrued Employee Compensation 144,873 189,783
Accrued Professional Services 91,500 71,000
Accrued Warranty Expense 25,000 25,000
Other Accrued Liabilities 41,175 49,512
Total Current Liabilities 1,096,876 1,218,781
Capital Lease Obligation, net of current portion 21,378 23,564
STOCKHOLDERS’ EQUITY
Common Stock, $0.01 par value – Authorized – 50,000,000 shares; Issued and Outstanding – 9,428,472 shares at September 30, 2017 and 8,872,916 shares at June 30, 2017 94,285 88,729
Additional Paid-in Capital 45,407,922 45,140,383
Accumulated Deficit (44,699,517 ) (44,670,732 )
Total Stockholders’ Equity 802,690 558,380
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,920,944 $ 1,800,725
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2017 AND 2016
(UNAUDITED)
  Three Months
Ended September 30,
  2017     2016  
Revenues $ 1,028,746 $ 849,548
Cost of Goods Sold 642,004 682,497
Gross Profit 386,742 167,051
Research and Development Expenses, net 118,427 116,992
Selling, General and Administrative Expenses 296,584 343,782
Gain on Sale of Assets (315 )
Total Operating Expenses 415,011 460,459
Operating Loss (28,269 ) (293,408 )
Interest Expense (516 )
Net Loss $ (28,785 ) $ (293,408 )
Loss Per Share:
Basic $ (0.00 ) $ (0.04 )
Diluted $ (0.00 ) $ (0.04 )
Weighted Average Common Shares Outstanding:
Basic 9,108,423 7,539,582
Diluted 9,108,423 7,539,582
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2017 AND 2016
(UNAUDITED)
  Three Months
Ended September 30,
 
  2017     2016  
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (28,785 ) $ (293,408 )
Adjustments to Reconcile Net Loss to Net Cash Provided From (Used In)
Operating Activities –
Depreciation and Amortization 8,750 7,621
Gain on Sale of Assets (315 )
Stock-based Compensation Expense 26,057 60,901
Non-cash Consulting Expense (7,425 ) 8,550
Changes in Operating Assets and Liabilities –
Accounts Receivable, net (145,413 ) 184,327
Inventories, net 88,162 140,979
Prepaid Expenses 4,591 6,297
Accounts Payable 5,381 60,085
Customer Advances (57,642 ) 11,025
Accrued Liabilities (25,322 ) (28,274 )
Net Cash Provided From (Used In) Operating Activities (131,646 ) 157,788
CASH FLOWS FROM INVESTING ACTIVITIES:
Additional Patent Costs (340 )
Purchases of Property and Equipment (3,500 )
Proceeds from Sale of Assets 315
Net Cash Used In Investing Activities (3,525 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of Capital Lease Obligation (2,046 ) (1,916 )
Gross Proceeds from Private Placement of Common Stock 210,001
Net Cash Provided From (Used In) Financing Activities 207,955 (1,916 )
NET INCREASE IN CASH AND CASH EQUIVALENTS 76,309 152,347
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 118,405 50,059
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 194,714 $ 202,406
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 $

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