Precision Optics Reports First Quarter Fiscal Year 2020 Financial Results
Conference Call Scheduled for today, November 14, 2019 at 5:00pm ET
GARDNER, Mass., Nov. 14, 2019 /PRNewswire/ -- Precision Optics Corporation, Inc. (OTCQB: 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 first quarter fiscal year ended September 30, 2019.
First quarter fiscal 2020 highlights:
- Revenue for the quarter (ended September 30, 2019) was $2.5 million compared to $1.6 million in the same quarter of the previous fiscal year, an increase of 61% driven primarily by Ross Optical operating as a division of Precision Optics.
- Gross margins of 39% compared to 30% in the same quarter of the prior year, and sequentially improved for the third consecutive quarter.
- Net loss of $86,000 during the quarter included $122,000 of stock-based compensation and service fees.
Precision Optics' CEO, Joseph Forkey, commented, "The first quarter financial results highlight the positive impact of our evolving capabilities, which now include Ross Optical, resulting in a year-over-year revenue increase of 61% and positive operating cash flow. During the quarter, we continued deliveries of the three products that went into commercial level production last year and we expect our expanding pipeline of Precision Optics-enabled products to allow for ongoing growth. Our business strategy of enabling leading medical device companies around the world to meet the increasing demands of the surgical community, who are requiring more enhanced and smaller imaging systems for minimally invasive surgery, as well as the rapid proliferation of 3D endoscopes for surgical robotic systems, continues to gain traction."
Dr. Forkey continued, "As we look to the remainder of fiscal 2020, we expect growth from the production of currently commercialized products while continuing to advance our pipeline of engineering projects toward commercialization. Further, we look to build upon the improvements we achieved during the first quarter, where overall gross margins were 39% compared to 30% a year ago. We are working to improve gross margins on our base business and are benefitting from the higher margin profile of Ross Optical. Overall, we maintain a disciplined investment strategy in sales and marketing and engineering capabilities to fuel growth while generating positive cash flows."
The following table summarizes the first quarter (unaudited) results for the periods ended September 30, 2019 and 2018:
Three Months Ended September 30, |
|||||||||
2019 |
2018 |
||||||||
Revenues |
$ |
2,514,984 |
$ |
1,559,458 |
|||||
Gross Profit |
974,117 |
462,507 |
|||||||
Operating Expenses |
1,059,999 |
761,287 |
|||||||
Net Loss |
(86,110) |
(299,285) |
|||||||
Loss Per Share: |
|||||||||
Basic and Diluted |
$ |
(0.01) |
$ |
(0.03) |
|||||
Weighted Average Common Shares Outstanding: |
|||||||||
Basic and Diluted |
12,832,389 |
10,261,269 |
|||||||
Conference Call Details
The Company has scheduled a conference call to discuss the first quarter 2020 financial results for Thursday, November 14, 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/2109/32176.
Replay: A teleconference replay of the call will be available until November 21, 2019 at (877) 344-7529 or (412) 317-0088 confirmation #10136579. A webcast replay will be available at https://www.webcaster4.com/Webcast/Page/2109/32176.
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, MicroprecisionTM 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
[email protected]
Following are the Company's Consolidated Balance Sheets at September 30, 2019 and June 30, 2019, and Statements of Operations, Stockholders' Equity and Cash Flows for the three month periods ended September 30, 2019 and 2018:
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
September 30, 2019 |
June 30, |
|||||||
ASSETS |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ |
849,135 |
$ |
2,288,426 |
||||
Accounts receivable (net of allowance for doubtful accounts of $246,201 and $246,953 at September 30, 2019 and June 30, 2019, respectively) |
1,645,765 |
2,165,107 |
||||||
Inventories |
2,071,852 |
1,734,604 |
||||||
Prepaid expenses |
181,106 |
180,336 |
||||||
Total current assets |
4,747,858 |
6,368,473 |
||||||
Fixed Assets: |
||||||||
Machinery and equipment |
2,755,076 |
2,748,715 |
||||||
Leasehold improvements |
683,970 |
668,446 |
||||||
Furniture and fixtures |
168,450 |
168,450 |
||||||
3,607,496 |
3,585,611 |
|||||||
Less—Accumulated depreciation and amortization |
3,225,525 |
3,202,605 |
||||||
Net fixed assets |
381,971 |
383,006 |
||||||
Operating lease right-to-use asset |
158,690 |
- |
||||||
Patents, net |
60,841 |
54,087 |
||||||
Goodwill |
687,664 |
687,664 |
||||||
TOTAL ASSETS |
$ |
6,037,024 |
$ |
7,493,230 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current Liabilities: |
||||||||
Current portion of capital lease obligation |
$ |
9,731 |
$ |
9,572 |
||||
Accounts payable |
1,036,188 |
1,174,263 |
||||||
Customer advances |
513,623 |
450,192 |
||||||
Accrued compensation and other |
370,296 |
533,944 |
||||||
Amount due for business acquisition |
- |
1,443,341 |
||||||
Operating lease liability |
54,310 |
- |
||||||
Total current liabilities |
1,984,148 |
3,611,312 |
||||||
Capital lease obligation, net of current portion |
2,535 |
5,027 |
||||||
Acquisition earn out liability |
500,000 |
500,000 |
||||||
Operating lease liability |
104,380 |
- |
||||||
Stockholders' Equity: |
||||||||
Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 12,868,639 shares at September 30, 2019 and 12,071,139 shares at June 30, 2019 |
128,687 |
120,712 |
||||||
Additional paid-in capital |
49,040,377 |
48,893,172 |
||||||
Accumulated deficit |
(45,723,103) |
(45,636,993) |
||||||
Total stockholders' equity |
3,445,961 |
3,376,891 |
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
6,037,024 |
$ |
7,493,230 |
||||
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, |
||||||||
Three Months |
||||||||
2019 |
2018 |
|||||||
Revenues |
$ |
2,514,984 |
$ |
1,559,458 |
||||
Cost of Goods Sold |
1,540,867 |
1,096,951 |
||||||
Gross Profit |
974,117 |
462,507 |
||||||
Research and Development Expenses, net |
152,154 |
100,798 |
||||||
Selling, General and Administrative Expenses |
907,845 |
660,489 |
||||||
Total Operating Expenses |
1,059,999 |
761,287 |
||||||
Operating Loss |
(85,882) |
(298,780) |
||||||
Interest Expense |
(228) |
(505) |
||||||
Net Loss |
$ |
(86,110) |
$ |
(299,285) |
||||
Loss Per Share: |
||||||||
Basic and Diluted |
$ |
(0.01) |
$ |
(0.03) |
||||
Weighted Average Common Shares Outstanding: |
||||||||
Basic and Diluted |
12,832,389 |
10,261,269 |
||||||
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, |
||||||||||||||||||||
Three Month Period Ended September 30, 2019 |
||||||||||||||||||||
Number of |
Common |
Additional |
Accumulated |
Total |
||||||||||||||||
Balance, July 1, 2019 |
12,071,139 |
$ |
120,712 |
$ |
48,893,172 |
$ |
(45,636,993) |
$ |
3,376,891 |
|||||||||||
Issuance of common stock in private placement |
760,000 |
7,600 |
17,400 |
– |
25,000 |
|||||||||||||||
Proceeds from exercise of stock options |
12,500 |
125 |
8,550 |
– |
8,675 |
|||||||||||||||
Issuance of common stock for services |
25,000 |
250 |
44,750 |
– |
45,000 |
|||||||||||||||
Stock-based compensation |
– |
– |
76,505 |
– |
76,505 |
|||||||||||||||
Net loss |
– |
– |
– |
(86,110) |
(86,110) |
|||||||||||||||
Balance, September 30, 2019 |
12,868,639 |
$ |
128,687 |
$ |
49,040,377 |
$ |
(45,723,103) |
$ |
3,445,961 |
|||||||||||
Three Month Period Ended September 30, 2018 |
||||||||||||||||||||
Number of |
Common |
Additional |
Accumulated |
Total |
||||||||||||||||
Balance, July 1, 2018 |
10,197,139 |
$ |
101,972 |
$ |
45,484,186 |
$ |
(45,022,122) |
$ |
564,036 |
|||||||||||
Issuance of common stock for services |
100,000 |
1,000 |
(1,000) |
– |
– |
|||||||||||||||
Stock-based compensation |
– |
– |
342,984 |
– |
342,984 |
|||||||||||||||
Net loss |
– |
– |
– |
(299,285) |
(299,285) |
|||||||||||||||
Balance, September 30, 2018 |
10,297,139 |
$ |
102,972 |
$ |
45,826,170 |
$ |
(45,321,407) |
$ |
607,735 |
|||||||||||
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, |
||||||||
Three Months |
||||||||
2019 |
2018 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net Loss |
$ |
(86,110) |
$ |
(299,285) |
||||
Adjustments to reconcile net loss to net cash provided from (used in) operating activities - |
||||||||
Depreciation and amortization |
22,920 |
6,956 |
||||||
Stock-based compensation expense |
76,505 |
342,984 |
||||||
Non-cash consulting expense |
45,000 |
– |
||||||
Changes in operating assets and liabilities - |
||||||||
Accounts receivable, net |
519,342 |
141,203 |
||||||
Inventories, net |
(337,248) |
30,450 |
||||||
Prepaid expenses |
(770) |
13,124 |
||||||
Accounts payable |
(138,075) |
260,043 |
||||||
Customer advances |
63,431 |
(457,138) |
||||||
Accrued liabilities |
(163,648) |
(44,767) |
||||||
Net cash provided by (used in) operating activities |
1,347 |
(6,430) |
||||||
Cash Flows from Investing Activities: |
||||||||
Cash paid for business acquisition |
(1,443,341) |
– |
||||||
Purchases of fixed assets |
(21,885) |
(42,809) |
||||||
Additional patent costs |
(6,754) |
– |
||||||
Net cash used in investing activities |
(1,471,980) |
(42,809) |
||||||
Cash Flows from Financing Activities: |
||||||||
Payment of capital lease obligation |
(2,333) |
(2,185) |
||||||
Gross proceeds from exercise of stock options |
8,675 |
– |
||||||
Gross Proceeds from private placement of common stock |
25,000 |
– |
||||||
Net cash provided from (used in) financing activities |
31,342 |
(2,185) |
||||||
Net decrease in cash and cash equivalents |
(1,439,291) |
(51,424) |
||||||
Cash and cash equivalents, beginning of period |
2,288,426 |
402,738 |
||||||
Cash and cash equivalents, end of period |
$ |
849,135 |
$ |
351,314 |
||||
Supplemental disclosure of non-cash financing activities: |
||||||||
Offering costs included in accrued compensation and other |
$ |
12,250 |
$ |
– |
||||
SOURCE Precision Optics Corporation
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