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Precision Optics Corporation, Inc. Announces Operating Results for the Second Quarter and Six Months of Fiscal Year 2016

GARDNER, Mass., Feb. 16, 2016 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. (OTCQB:PEYE) (the “Company”) today announced operating results on an unaudited basis for its second quarter and six months ended December 31, 2015, of fiscal year 2016.

Second quarter highlights include:

  • Revenues of $955 thousand, representing an 11.2% sequential increase over the first quarter of fiscal 2016, and a 2.2% decline over the second quarter of fiscal 2015;
  • Gross margin of 22.7%, an improvement compared to 15.4% in the first quarter of fiscal 2016 and compared to 16.6% in the second quarter of fiscal 2015;
  • Ongoing increase in engineering / design projects, and associated revenue, using the Company’s Microprecision™ optics for reusable and single-use medical devices.

Commenting on the results, Company CEO, Joseph Forkey, said, “This last quarter marks another step in Precision Optics’ progress towards profitable operations built upon new product technologies and an expanding customer base. While total revenue was only slightly higher during the six months ended December 2015 compared to the previous year, revenue from new product activities versus traditional products increased 13% and is now at 71% of total sales. Equally important, as an indicator of our growing pipeline, is that engineering services revenue increased 56% during the last six months compared to the prior year, to over $500,000. The number of engineering services projects increased 70% year over year. We believe that the vast majority of these projects can eventually lead to ongoing production revenues.”

Dr. Forkey continued, “We are also pleased to report that we are now generating greater gross margins on roughly the same level of revenue. This represents the result of our ongoing efforts to optimize production efficiency in existing products and to reduce time devoted to low margin projects and non-revenue generating engineering services. It is also a reflection of the increased level of know-how relating to the development and production of the new Microprecision™ and CMOS based products. We expect that as revenue increases we will continue to generate increasing gross margins.”

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the fiscal second quarter 2016 financial results for Wednesday, February 17, 2016 at 4:30 PM Eastern. To participate in the conference call, please dial 1-866-652-5200 toll free from the U.S., or 1-412-317-6060, 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 March 2, 2016. The audio replay can be accessed by dialing 1-412-317-0088 locally or 1-877-344-7529, toll free then enter conference ID number 10081171.

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 December 31, 2015 and June 30, 2015, and statements of operations for the three months and six months ended December 31, 2015 and December 31, 2014 and statements of cash flows for the six months ended December 31, 2015 and December 31, 2014 (unaudited):

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

December 31,
2015
June 30,
2015
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $410,893 $241,051
Accounts Receivable, net 425,733 588,042
Inventories, net 1,093,756 1,073,256
Prepaid Expenses 89,212 65,182
Total Current Assets 2,019,594 1,967,531
PROPERTY AND EQUIPMENT
Machinery and Equipment 2,435,499 2,431,127
Leasehold Improvements 553,596 553,596
Furniture and Fixtures 148,303 148,303
Vehicles 19,674 19,674
3,157,072 3,152,700
Less: Accumulated Depreciation and Amortization (3,107,840) (3,096,993)
Net Property and Equipment 49,232 55,707
Patents, net 21,515 18,644
TOTAL ASSETS $2,090,341 $2,041,882
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts Payable $852,781 $912,150
Customer Advances 47,970 118,800
Accrued Employee Compensation 223,132 222,222
Accrued Professional Services 37,536 60,735
Accrued Warranty Expense 25,000 25,000
Other Accrued Liabilities 74,258 36,087
Total Current Liabilities 1,260,677 1,374,994
STOCKHOLDERS’ EQUITY
Common Stock, $0.01 par value - Authorized - 50,000,000 shares; Issued and Outstanding – 7,434,582 shares at December 31, 2015 and 6,389,806 shares at June 30, 2015 74,346 63,898
Additional Paid-in Capital 44,048,028 43,232,500
Accumulated Deficit (43,292,710) (42,629,510)
Total Stockholders’ Equity 829,664 666,888
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $2,090,341 $2,041,882

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
DECEMBER 31, 2015 AND 2014
(UNAUDITED)

Three Months
Ended December 31,
Six Months
Ended December 31,
2015 2014 2015 2014
Revenues $954,772 $976,548 $1,813,199 $1,807,262
Cost of Goods Sold 737,750 814,036 1,463,839 1,532,612
Gross Profit 217,022 162,512 349,360 274,650
Research and Development Expenses, net 108,146 138,893 258,914 215,605
Selling, General and Administrative Expenses 407,088 346,770 772,114 693,917
Gain on Sale of Assets (16,902) (1,928) (18,468) (17,210)
Total Operating Expenses 498,332 483,735 1,012,560 892,312
Net Loss (281,310) (321,223) (663,200) (617,662)
Loss Per Share:
Basic $(0.04) $(0.05) $(0.10) $(0.10)
Diluted $(0.04) $(0.05) $(0.10) $(0.10)
Weighted Average Common Shares Outstanding:
Basic 7,230,169 6,262,584 6,809,988 6,195,793
Diluted 7,230,169 6,262,584 6,809,988 6,195,793

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
DECEMBER 31, 2015 AND 2014
(UNAUDITED)

Six Months
Ended December 31,
2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(663,200) $(617,662)
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities -
Depreciation and Amortization 10,847 8,888
Gain on Sale of Assets (18,468) (17,210)
Stock-based Compensation Expense 142,428 40,125
Non-cash Consulting Expense 47,850 18,000
Changes in Operating Assets and Liabilities -
Accounts Receivable, net 162,309 (156,394)
Inventories (20,500) (232,870)
Prepaid Expenses (24,030) (17,586)
Accounts Payable (59,369) 233,736
Customer Advances (70,830) 73,800
Accrued Expenses (31,968) 6,972
Net Cash Used In Operating Activities (524,931) (660,201)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additional Patent Costs (2,871) (9,270)
Purchases of Property and Equipment (4,372) (57,671)
Proceeds from Sale of Assets 18,468 17,210
Net Cash Provided By (Used In) Investing Activities 11,225 (49,731)
CASH FLOWS FROM FINANCING ACTIVITIES:
Gross Proceeds from Private Placement of Common Stock 700,000 980,291
Private Placement Expenses Incurred as of December 31 (16,452) (87,572)
Net Cash Provided by Financing Activities 683,548 892,719
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 169,842 182,787
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 241,051 202,380
CASH AND CASH EQUIVALENTS, END OF PERIOD $410,893 $385,167
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Income Taxes $912 $912
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Issuance of 90,298 Shares of Common Stock to Consultants $- $65,015


Amy Ives (978) 630-1800 info@poci.com

Source:Precision Optics Corporation