GARDNER, Mass., Sept. 27, 2018 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. PEYE (the "Company") today announced operating results on an unaudited basis for its fourth quarter and fiscal year ended June 30, 2018.
Fourth quarter 2018 highlights include:
- Fourth quarter revenues of $1,460,932 compared to $720,223 in the fourth quarter of fiscal 2017;
- 38% gross margin compared to 25% in the fourth quarter of fiscal 2017;
- Net income of $16,992, or $130,742 before a non-recurring charge for an uncollectible receivable from one customer.
Fiscal year 2018 highlights include:
- Fiscal year revenues of $4,038,048, compared to $3,154,547 in fiscal 2017, representing a 28% year-over-year increase;
- 37% gross margin compared to 25% in fiscal year 2017;
- Level operating expenses in fiscal 2018 on higher revenues contributed to a significantly reduced operating loss compared to fiscal 2017;
- Efficient conversion of development projects into production.
Precision Optics' CEO, Joseph Forkey, commented, "We are very pleased to report increased revenues, strong margins, and stable operating costs resulting in a significantly reduced operating loss for fiscal year 2018, and an operating profit for the fourth quarter. This represents our strongest overall results in many years, and the realization of a successful business model that we have been pursuing for some time. During the last few years, we have balanced use of our resources on both engineering and production projects, anticipating that overall revenue increases would result from maintenance of existing, ongoing, production orders combined with new projects moving from engineering development to production. As anticipated, revenues in the fourth quarter of fiscal 2018 of $1,460,932 were bolstered by a 129% increase in production revenues as compared to production revenues in the third quarter of fiscal 2018 and a 174% increase compared to production revenues in the fourth quarter of fiscal 2017. This was due in large part to the conversion of three engineering projects into production. Despite a $113,750 expense charge in the fourth quarter for an uncollectible receivable from a single customer, we generated net income of $16,992, or $130,742 before the non-recurring expense item. Overall, we are encouraged with the financial performance in fiscal 2018, and particularly in the fourth quarter."
Dr. Forkey continued, "Looking forward, engineering projects continue to be our pipeline to long-term increases in production and overall revenues. Although engineering revenues were down by 6.7% in fiscal 2018 compared to fiscal 2017, we consider this to be a normal fluctuation due to timing of various phases of development work. More importantly, the number and quality of our engineering projects remain strong with a robust pipeline of products in development that we believe will help to fuel future revenue increases. Overall, we see an ongoing increase in demand for optical components and devices incorporating our proprietary technologies for designing and producing 3D endoscopes as well as micro-optics and micro imaging and illumination systems. In particular, demand continues to increase for devices that combine our Microprecision™ technology with advanced CMOS technology to achieve very small endoscopic devices, and for devices that use our 3D endoscope technology in combination with robotic surgery applications. We believe that our established capability to efficiently support multiple engineering and production projects simultaneously, and importantly, our ability to successfully convert engineering projects into production products, will enable us to increase revenues and further enhance financial performance in the future."
The following table summarizes the fourth quarter and year results for the periods ended June 30, 2018 and 2017 (unaudited):
| Three Months Ended June 30, | Year Ended June 30, | ||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| Revenues | $ | 1,460,932 | $ | 720,223 | $ | 4,038,048 | $ | 3,154,547 | |||||||||||||
| Gross Profit | 558,801 | 180,142 | 1,481,918 | 773,724 | |||||||||||||||||
| Operating Expenses | 540,484 | 415,530 | 1,830,537 | 1,776,125 | |||||||||||||||||
| Operating Income (Loss) | 18,317 | (235,388 | ) | (348,619 | ) | (1,002,401 | ) | ||||||||||||||
| Net Income (Loss) | 16,992 | (237,601 | ) | (351,390 | ) | (1,006,457 | ) | ||||||||||||||
| Income (Loss) Per Share: | |||||||||||||||||||||
| Basic | $ | 0.00 | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.12 | ) | ||||||||||
| Diluted | $ | 0.00 | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.12 | ) | ||||||||||
| Weighted Average Common Shares Outstanding: | |||||||||||||||||||||
| Basic and Diluted | 10,131,007 | 8,872,916 | 9,826,151 | 8,343,235 | |||||||||||||||||
Quarterly Conference Call Details
The Company has scheduled a conference call to discuss the fiscal year end and fourth quarter 2018 financial results for Thursday, September 27, 2018 at 5:00 p.m. EDT. To participate in the conference call, please dial 1-844-826-3042 toll free from the U.S., or 1-412-317-5187 from outside the U.S., and ask to be connected to the Precision Optics, Corp. 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 October 05, 2018. The audio replay can be accessed toll free by dialing 1-877-344-7529 from the U.S., or 1-412-317-0088 from outside the U.S., or 1-855-669-9658 from Canada using Access Code 10124294.
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.
Company Contact:
Precision Optics Corporation, Inc.
22 East Broadway
Gardner, Massachusetts 01440-3338
Telephone: 978-630-1800
Investor Contact:
Mr. Kirin M. Smith, Chief Operating Officer
PCG Advisory Group
Telephone: 646-863-6519
Email: Ksmith@PCGAdvisory.com
www.pcgadvisory.com
Following are the Company's Consolidated Balance Sheets at June 30, 2018 and June 30, 2017, and Statements of Operations for the years ended June 30, 2018 and 2017 and Statements of Cash Flows for the years ended June 30, 2018 and 2017:
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AT JUNE 30,
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 402,738 | $ | 118,405 | ||||
| Accounts receivable (net of allowance for doubtful accounts of $232,500 at June 30, 2018 and $5,000 at June 30, 2017) | 796,923 | 468,548 | ||||||
| Inventories | 1,144,068 | 1,055,447 | ||||||
| Prepaid expenses | 70,991 | 55,985 | ||||||
| Total current assets | 2,414,720 | 1,698,385 | ||||||
| Fixed Assets: | ||||||||
| Machinery and equipment | 2,511,638 | 2,507,190 | ||||||
| Leasehold improvements | 553,596 | 553,596 | ||||||
| Furniture and fixtures | 148,303 | 148,303 | ||||||
| 3,213,537 | 3,209,089 | |||||||
| Less—Accumulated depreciation and amortization | 3,164,051 | 3,136,835 | ||||||
| Net fixed assets | 49,486 | 72,254 | ||||||
| Patents, net | 47,275 | 30,086 | ||||||
| $ | 2,511,481 | $ | 1,800,725 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Current portion of capital lease obligation | $ | 8,962 | $ | 8,391 | ||||
| Accounts payable | 703,538 | 694,958 | ||||||
| Customer advances | 857,842 | 180,137 | ||||||
| Accrued employee compensation | 238,590 | 189,783 | ||||||
| Accrued professional services | 98,000 | 71,000 | ||||||
| Accrued warranty expense | 25,000 | 25,000 | ||||||
| Other accrued liabilities | 912 | 49,512 | ||||||
| Total current liabilities | 1,932,844 | 1,218,781 | ||||||
| Capital lease obligation, net of current portion | 14,601 | 23,564 | ||||||
| Commitments (Note 2) | – | – | ||||||
| Stockholders' Equity: | ||||||||
| Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 10,197,139 shares at June 30, 2018 and 8,872,916 shares at June 30, 2017 | 101,972 | 88,729 | ||||||
| Additional paid-in capital | 45,484,186 | 45,140,383 | ||||||
| Accumulated deficit | (45,022,122 | ) | (44,670,732 | ) | ||||
| Total stockholders' equity | 564,036 | 558,380 | ||||||
| $ | 2,511,481 | $ | 1,800,725 | |||||
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30,
| 2018 | 2017 | |||||||
| Revenues | $ | 4,038,048 | $ | 3,154,547 | ||||
| Cost of goods sold | 2,556,130 | 2,380,823 | ||||||
| Gross profit | 1,481,918 | 773,724 | ||||||
| Research and development expenses, net | 456,377 | 464,162 | ||||||
| Selling, general and administrative expenses | 1,374,160 | 1,313,478 | ||||||
| Gain on sale of assets | – | (1,515 | ) | |||||
| Total operating expenses | 1,830,537 | 1,776,125 | ||||||
| Operating loss | (348,619 | ) | (1,002,401 | ) | ||||
| Interest expense | (1,859 | ) | (3,144 | ) | ||||
| Loss before provision for income taxes | (350,478 | ) | (1,005,545 | ) | ||||
| Provision for income taxes | 912 | 912 | ||||||
| Net loss | $ | (351,390 | ) | $ | (1,006,457 | ) | ||
| Loss per share: | ||||||||
| Basic and fully diluted | $ | (0.04 | ) | $ | (0.12 | ) | ||
| Weighted average common shares outstanding: | ||||||||
| Basic and fully diluted | 9,826,151 | 8,343,235 | ||||||
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,
| 2018 | 2017 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (351,390 | ) | $ | (1,006,457 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities- | ||||||||
| Depreciation and amortization | 27,216 | 33,660 | ||||||
| Provision for doubtful accounts receivable | 227,500 | (18,377 | ) | |||||
| Gain on sale of assets | – | (1,515 | ) | |||||
| Stock-based compensation expense | 52,341 | 201,612 | ||||||
| Non-cash consulting expense | 2,400 | 33,900 | ||||||
| Changes in operating assets and liabilities- | ||||||||
| Accounts receivable | (555,875 | ) | 300,209 | |||||
| Inventories | (88,621 | ) | 78,004 | |||||
| Prepaid expenses | (15,006 | ) | 32,144 | |||||
| Accounts payable | 48,580 | (457,603 | ) | |||||
| Customer advances | 677,705 | 180,137 | ||||||
| Accrued expenses | 75,807 | (43,148 | ) | |||||
| Net cash provided by (used in) operating activities | 100,657 | (667,434 | ) | |||||
| Cash Flows from Investing Activities: | ||||||||
| Proceeds from sale of assets | – | 1,515 | ||||||
| Additional patent costs | (17,189 | ) | (7,212 | ) | ||||
| Purchases of fixed assets | (4,448 | ) | (27,719 | ) | ||||
| Net cash used in investing activities | (21,637 | ) | (33,416 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Payment of capital lease obligation | (8,392 | ) | (7,857 | ) | ||||
| Gross proceeds from private placements of common stock | 210,001 | 780,000 | ||||||
| Gross proceeds from exercise of stock purchase warrants | 6,667 | – | ||||||
| Private placement expenses paid | (2,963 | ) | (2,947 | ) | ||||
| Net cash provided by financing activities | 205,313 | 769,196 | ||||||
| Net increase in cash and cash equivalents | 284,333 | 68,346 | ||||||
| Cash and cash equivalents, beginning of year | 118,405 | 50,059 | ||||||
| Cash and cash equivalents, end of year | $ | 402,738 | $ | 118,405 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the year for income taxes | $ | 912 | $ | 912 | ||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Issuance of common stock to consultant | $ | 51,000 | $ | – | ||||
| Private placement expenses incurred but not yet paid | $ | – | $ | 21,000 | ||||
| Issuance of common stock in settlement of accounts payable | $ | 40,000 | $ | 20,000 | ||||
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