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Precision Optics Reports Fourth Quarter and Fiscal Year 2020 Financial Results

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Precision Optics Corporation (OTCQB: PEYE) announced its fourth quarter and fiscal year 2020 results, reporting a quarterly revenue of $2.24 million, down 6% from $2.38 million year-over-year, primarily due to COVID-19 impacts. For the fiscal year, revenue rose by 46% to $9.9 million, attributed to the full-year contribution from Ross Optical. The company experienced a net loss of $323,085 for Q4 and $1,426,150 for the fiscal year. Gross margins were 29% for Q4 and 34% for the fiscal year. The company remains optimistic about future revenue improvements following COVID-related disruptions.

Positive
  • Fiscal year 2020 revenue increased by 46% to $9.9 million.
  • Gross margins improved to 34% for the fiscal year.
Negative
  • Q4 revenue decreased by 6% year-over-year due to COVID-19.
  • Q4 net loss increased to $323,085 from $109,155 in the same quarter last year.

GARDNER, Mass., Sept. 24, 2020 /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 fourth quarter and fiscal year ended June 30, 2020.

The Company previously announced preliminary fourth quarter and fiscal year 2020 revenue on August 13, 2020.

Fourth quarter fiscal 2020 highlights:

  • Revenue for the quarter ended June 30, 2020 was $2.24 million compared to $2.38 million in the same quarter of the previous fiscal year, a decrease of 6%. Revenue for the quarter was down year over year on an actual and pro forma basis due to impacts of the COVID-19 pandemic.
  • Gross margins for the quarter were 29% compared with 31% in the same quarter of the previous fiscal year. This decline in margin was primarily driven by lower revenue and impacts of COVID-19.
  • Operating expenses decreased more than $300,000 during the fourth quarter of fiscal 2020 compared to the third quarter of fiscal 2020.
  • Net loss of $323,085 during the quarter included $75,567 of stock-based compensation.
  • The Company's cash balance at June 30, 2020 was $1.1 million reflecting the Company's aggressive cash management initiatives, coupled with proceeds from an equity financing in April 2020 and receipt of funding under the PPP.

Fiscal year 2020 highlights:

  • Revenue for the fiscal year ended June 30, 2020 was $9.9 million compared to $6.8 million in the previous fiscal year, an increase of 46% driven primarily by Ross Optical operating as a division of Precision Optics for the entire year. Revenue for the year was down year over year on a pro forma basis due to impacts of the COVID-19 pandemic.
  • Gross margins for the fiscal year ended June 30, 2020 were 34% compared to 31% for the previous fiscal year.
  • Net loss of $1,426,150 during the fiscal year included $547,345 of stock-based compensation.
  • On April 14, 2020 the Company raised $250,000 from existing accredited investors with the sale of 200,000 shares at a purchase price of $1.25 per share. On May 7, 2020 the Company received an $809,000 loan from the Small Business Administration (SBA) Paycheck Protection Program.

Precision Optics' CEO, Joseph Forkey, commented, "Our financial results for the fourth quarter and fiscal year were consistent with our preliminary results announced in mid-August, reflecting the positive contributions from our Ross Optical acquisition offset by impacts to certain aspects of our operations due to COVID-19. We believe the near-term disruptions that we experienced in the third and fourth quarters of fiscal 2020 due to COVID-19 have begun to subside with an expectation that we will see improvements in first quarter fiscal 2021 revenue and gross margins, as compared to the fourth quarter of fiscal 2020."

Dr. Forkey continued, "Our three recently commercialized production programs all continue at levels similar to recent months and we are advancing other programs in development toward production. There are also a number of new opportunities we are pursuing with combined significant revenue potential. One program including prototype deliveries for a new defense / aerospace customer is a great example of the successful integration of Ross Optical. There are clearly macro challenges in the economy but we believe continued execution in our core business plus investment in high opportunity products and markets will lead to strong growth in our business going forward."

The following table summarizes the fourth quarter and fiscal year (unaudited) results for the periods ended June 30, 2020 and 2019:



Three Months


Year



Ended June 30,


Ended June 30,



2020

2019


2020

2019

Revenues

$      2,237,025

$      2,380,406


$      9,923,355

$      6,804,169








Gross Profit

653,501

848,313


3,362,576

2,122,478








Stock Compensation Expenses

64,334

105,990


457,413

462,093

Business Acquisition Expenses

0

128,111


0

128,111

Other

909,223

722,189


4,328,146

2,144,817

Total Operating Expenses

973,557

956,290


4,785,559

2,735,021








Operating Income (Loss)

-320,056

-107,977


-1,422,983

-612,543








Net Income (Loss)

-323,085

-109,155


-1,426,150

-614,871








Income (Loss) per Share

$              (0.02)

$              (0.01)


$              (0.11)

$              (0.05)


Basic and Diluted













Weighted Verage Common Shares Outstanding







Basic and Diluted

13,161,020

12,061,710


12,998,915

11,486,079








Conference Call Detailsp0o
The Company has scheduled a conference call to discuss the fourth quarter and fiscal year 2020 financial results for Thursday, September 24, 2020 at 5:00 p.m. EDT.

Call-in Information: Interested parties can access the conference call by dialing (844) 735-3662 or (412) 317-5705.

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/2109/37652.

Replay: A teleconference replay of the call will be available until October 1, 2020 at (877) 344-7529 or (412) 317-0088 confirmation # 10147933. A webcast replay will be available at https://www.webcaster4.com/Webcast/Page/2109/37652.

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, Microprecision™ 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, 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
peye@lythampartners.com

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets at June 30, 2020 and 2019




2020



2019


ASSETS









Current Assets:









  Cash and cash equivalents


$

1,134,697



$

2,288,426


Accounts receivable (net of allowance for doubtful accounts of $248,450 at June 30, 2020 and $246,953 at June 30, 2019)



1,481,437




2,165,107


  Inventories



2,197,244




1,734,604


  Prepaid expenses



133,707




180,336


  Total current assets



4,947,085




6,368,473











Fixed Assets:









  Machinery and equipment



2,907,533




2,748,715


  Leasehold improvements



731,801




668,446


  Furniture and fixtures



178,640




168,450





3,817,974




3,585,611


Less—Accumulated depreciation and amortization



3,314,824




3,202,605


Net fixed assets



503,150




383,006











Operating lease right-to-use asset



118,403





Patents, net



95,229




54,087


Goodwill



687,664




687,664











TOTAL ASSETS


$

6,351,531



$

7,493,230











LIABILITIES AND STOCKHOLDERS' EQUITY









Current Liabilities:









  Current portion of capital lease obligation


$

51,761



$

9,572


  Current portion of acquisition earn out liability



166,667





  Note payable to bank



808,962





  Accounts payable



1,066,005




1,174,263


  Customer advances



417,059




450,192


  Accrued compensation and other



581,770




533,944


  Operating lease liability



57,156





  Amount due for business acquisition






1,443,341


Total current liabilities



3,149,380




3,611,312











Capital lease obligation, net of current portion



35,810




5,027


Acquisition earn out liability



333,333




500,000


Operating lease liability



61,247














Stockholders' Equity:









Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 13,191,789 shares at June 30, 2020 and 12,071,139 shares at June 30, 2019



131,918




120,712


  Additional paid-in capital



49,702,986




48,893,172


  Accumulated deficit



(47,063,143)




(45,636,993)


  Total stockholders' equity



2,771,761




3,376,891











TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

6,351,531



$

7,493,230


 

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

for the Years Ended June 30, 2020 and 2019




2020



2019









Revenues


$

9,923,355



$

6,804,169


Cost of goods sold



6,560,779




4,681,691











Gross profit



3,362,576




2,122,478











Research and development expenses, net



886,129




505,300


Selling, general and administrative expenses



3,899,430




2,101,610


Business acquisition expenses






128,111


Total operating expenses



4,785,559




2,735,021











  Operating loss



(1,422,983)




(612,543)











Interest expense



(1,002)




(1,416)











  Loss before provision for income taxes



(1,423,985)




(613,959)











Provision for income taxes



2,165




912











Net loss


$

(1,426,150)



$

(614,871)











Loss per share:









Basic and fully diluted/


$

(0.11)



$

(0.05)











Weighted average common shares outstanding:









Basic and fully diluted



12,998,915




11,486,079


 

 

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SOURCE Precision Optics Corporation

FAQ

What were the fourth quarter results for Precision Optics (PEYE)?

Precision Optics reported fourth quarter revenue of $2.24 million, a 6% decrease from $2.38 million year-over-year.

How did COVID-19 impact Precision Optics (PEYE) in fiscal year 2020?

COVID-19 impacted revenue performance, resulting in a decrease in fourth quarter revenue and a downtrend in certain operational aspects.

What was Precision Optics' (PEYE) net loss for the fiscal year 2020?

Precision Optics reported a net loss of $1,426,150 for the fiscal year 2020.

What are the expectations for Precision Optics (PEYE) in fiscal year 2021?

The company anticipates improvements in revenue and gross margins as COVID-related disruptions begin to subside.

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