GARDNER, Mass., Sept. 28 /PRNewswire-FirstCall/ -- Precision Optics Corporation, Inc. (Nasdaq: POCI) today announced operating results on an unaudited basis for the fourth quarter of fiscal year 2005 ended June 30, 2005. Fourth Quarter Operating Results Revenues -- For the quarter ended June 30, 2005, revenues were $362,215 compared to $292,620 for the same period last year, an increase of 23.7%. Revenues in the quarter increased 9.1% from the preceding quarter ended March 31, 2005. Net Loss -- For the quarter ended June 30, 2005, net loss was $1,114,108, or $0.16 per share, an increase of $102,583, from the net loss of $1,011,525, or $0.58 per share, for the same period last year. The weighted average common shares outstanding for the quarter ended June 30, 2005 and 2004 were 7,008,212 and 1,752,053, respectively. Special Charges -- Net loss for the quarter ended June 30, 2005 included provisions for restructuring and obsolete and slow moving inventories totaling $303,762. Net loss for the quarter ended June 30, 2004 included provisions for obsolete and slow moving inventories of $191,200. Fiscal Year 2005 Operating Results Revenues -- For the year ended June 30, 2005, revenues were $1,349,819 compared to $1,472,008 for the same period last year, a decrease of 8.3%. Net Loss -- For the year ended June 30, 2005, net loss was $3,688,361, or $0.55 per share, an increase of $4,285 compared to the net loss of $3,684,076, or $2.10 per share, for the year ended June 30, 2004. The weighted average common shares outstanding were for the years ended June 30, 2005 and 2004 were 6,749,003 and 1,752,053, respectively. Special Charges -- Net loss for the years ended June 30, 2005 and 2004 included provisions for restructuring and obsolete and slow moving inventories totaling $491,412 and $552,208, respectively. Cash Flow and Expenditures For the quarter ended June 30, 2005, cash and cash equivalents decreased by $866,229 compared to a decrease of $859,110 for the previous quarter ended March 31, 2005. Cash disbursements during the quarter ended June 30, 2005 included $84,501 paid for employee severance costs. Capital equipment expenditures during the year ended June 30, 2005 were $32,140, down 4.4% from the same period in 2004. Future capital expenditures will depend on future sales and the success of ongoing research and development efforts. For the quarter ended June 30, 2005, research and development expenses were $233,194, down 31.1% from $338,651 for the quarter ended June 30, 2004. Quarterly research and development expenses depend on the Company's assessment of new product opportunities. Customer Relationships The Company is now manufacturing ultra-small lenses, prisms, assemblies and advanced endoscopes with sizes ranging from 0.2 mm to 1 mm, for a number of customers. The Company is also in discussions with several customers regarding manufacturing of prototypes of similar products. These optical components and instruments utilize a variety of innovative techniques including the Company's patent-pending micro-precision(TM) lens technology. Expense Reduction The Company has taken additional measures to realign its cost structure with current revenue expectations. In June 2005, the Company reduced its annual labor cost by approximately $151,000, a 6.9% reduction. As a result of this action, the Company recorded a non-recurring pretax charge to earnings of $89,512 for employee severance benefits in the quarter ended June 30, 2005. In addition, the Company is in the process of reviewing other expense areas to determine where additional reductions in discretionary spending can be achieved. Outlook The Company expects its recent pattern of quarter-to-quarter revenue fluctuations to continue, due to the uncertain timing of orders from customers and their size in relation to total revenues. The Company continues to move forward with new products and technical innovations, in particular, the development of a new generation (patent pending) of its world-class product line of 3-D endoscopes, the development of a new prototype 2.7 mm endoscope, and new instruments utilizing the Company's new micro-precision(TM) lens technology (patent pending) for endoscopes under 1 mm. The Company continues to explore potential applications of single-molecule technology and nanotechnology. About Precision Optics Precision Optics Corporation, a leading developer and manufacturer of advanced optical instruments since 1982, designs and produces high-quality optical thin film coatings, medical instruments, and other advanced optical systems. The Company's medical instrumentation line includes laparoscopes, arthroscopes and endocouplers and a world-class product line of 3-D endoscopes for use in minimally invasive surgical procedures. The Company is currently developing specialty instruments incorporating its patent-pending LENSLOCK(TM) technology which ensures lower cost, easier repairability and enhanced durability. The Company is aggressively pursuing ultra-small instruments (some with lenses less than one millimeter in diameter) utilizing patent pending micro-precision(TM) lens technology. The Company is also exploring new initiatives in single molecule technology and nanotechnology for biomedical and other applications. Precision Optics Corporation is certified to the ISO 9001 Quality Standard, and complies with the FDA Good Manufacturing Practices and the European Union Medical Device Directive for CE Marking of its medical products. The Company's Internet Website is http://www.poci.com . PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND TWELVE MONTHS ENDED June 30, 2005 AND 2004 (UNAUDITED) -- THREE MONTHS -- --TWELVE MONTHS-- 2005 2004 2005 2004 REVENUES $362,215 $292,620 $1,349,819 $1,472,008 COST OF GOODS SOLD 699,399 547,936 1,997,586 2,062,902 Gross Profit (Loss) (337,184) (255,316) (647,767) (590,894) RESEARCH and DEVELOPMENT 233,194 338,651 1,143,412 1,319,345 SELLING, GENERAL and ADMINISTRATIVE EXPENSES 463,882 418,433 1,857,332 1,738,757 PROVISION FOR IMPAIRMENT AND RESTRUCTURING 89,512 - 89,512 52,208 Total Operating Expenses 786,588 757,084 3,090,256 3,110,310 Operating Loss (1,123,772) (1,012,400) (3,738,023) (3,701,204) INTEREST INCOME 10,576 1,787 50,574 18,089 INTEREST EXPENSE - - - (49) LOSS BEFORE PROVISION FOR INCOME TAXES $(1,113,196) $(1,010,613) $(3,687,449) $(3,683,164) PROVISION FOR INCOME TAXES 912 912 912 912 NET LOSS $(1,114,108) $(1,011,525) $(3,688,361) $(3,684,076) Basic and Diluted Loss Per Share $(0.16) $(0.58) $(0.55) $(2.10) Weighted Average Common Shares Outstanding 7,008,212 1,752,053 6,749,003 1,752,053 PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS June 30, 2005 June 30, 2004 CURRENT ASSETS Cash and Cash Equivalents $2,171,693 $343,260 Accounts Receivable, Net 177,031 80,195 Inventories 599,619 917,998 Prepaid Expenses 62,422 80,646 Deferred Financing Costs - 171,885 Total Current Assets 3,010,765 1,593,984 PROPERTY AND EQUIPMENT 4,231,975 4,199,835 Less: Accumulated Depreciation (4,092,202) (3,920,593) Net Property and Equipment 139,773 279,242 OTHER ASSETS 218,067 224,088 TOTAL ASSETS $3,368,605 $2,097,314 LIABILITIES AND STOCKHOLDERS' EQUITY TOTAL CURRENT LIABILITIES $519,010 $593,342 STOCKHOLDERS' EQUITY Common Stock, $.01 par value- Authorized -- 20,000,000 shares Issued and Outstanding - 7,008,212 shares at June 30, 2005 and 1,752,053 at June 30, 2004 70,082 17,521 Additional Paid-in Capital 32,751,598 27,770,175 Accumulated Deficit (29,972,085) (26,283,724) Total Stockholders' Equity 2,849,595 1,503,972 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,368,605 $2,097,314 Forward-looking statements contained in this news release, including those related to the Company's products under development and revenue estimates, are made under "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could materially affect future results. These risks and uncertainties, many of which are not within the Company's control, include, but are not limited to, the uncertainty and timing of the successful development of the Company's new products; the risks associated with reliance on a few key customers; the Company's ability to regain and maintain compliance with requirements for continued listing on the NASDAQ SmallCap Market; the Company's ability to attract and retain personnel with the necessary scientific and technical skills, the timing and completion of significant orders; the timing and amount of the Company's research and development expenditures; the timing and level of market acceptance of customers' products for which the Company supplies components; performance of the Company's vendors; the ability of the Company to control costs associated with performance under fixed price contracts; and the continued availability to the Company of essential supplies, materials and services; and the other risk factors and cautionary statements listed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, including but not limited to, the Company's Annual Report on Form 10-KSB for the year ended June 30, 2004.
SOURCE Precision Optics Corporation, Inc.