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Precision Optics Reports Fourth Quarter and Fiscal Year 2022 Financial Results

September 27, 2022 4:30 PM EDT

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Conference Call Scheduled for today, September 27, 2022 at 5:00pm ET

GARDNER, Mass., Sept. 27, 2022 /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, 2022.

Fourth quarter fiscal 2022 highlights:

  • Revenue for the quarter ended June 30, 2022 increased 79% to $4.79 million compared to $2.67 million in the same quarter of the previous fiscal year. Lighthouse Imaging, which was acquired on October 4, 2021, contributed $1.41 million in fourth quarter revenue.
  • Excluding contributions from Lighthouse, revenue for the fourth quarter increased 27% compared to the same quarter of the previous year.
  • Gross margins for the quarter ended June 30, 2022 were 30% compared to 29% in the same quarter of the prior year. Excluding Lighthouse, gross margins were 35%.
  • Net income for the quarter was $269,293 compared to net loss of $442,443 in the same quarter a year ago.
  • Adjusted EBITDA, defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation and other income, was a loss of $190,614.

Fiscal year 2022 highlights:

  • Revenue for the year ended June 30, 2022 was a record $15.68 million compared to $10.67 million in the previous fiscal year. Lighthouse contributed $3.88 million to revenue in the year.
  • Excluding contributions from Lighthouse, revenue for fiscal year 2022 increased 11% compared to the previous year.
  • Gross margins for the year ended June 30, 2022 were 31% compared to 32% in the previous fiscal year. Excluding Lighthouse, gross margins were 35%.
  • Net loss for the year was $928,418 compared to a loss of $102,826 during the previous year.
  • Adjusted EBITDA, defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation and other income, was a loss of $242,293.

Precision Optics' CEO, Joseph Forkey, commented, "Fiscal year 2022 was a transformational year for Precision Optics. We reported record fourth quarter and fiscal year revenues driven by advancement in a number of programs from our pipeline to production, and completed the acquisition of Lighthouse Imaging to combine two of the industry's leaders in micro-optics and digital imaging. We finished out the year with strong quarterly organic revenue growth of 27% year-over-year as we began to see the impact of production increases from new and ongoing programs. As we have long anticipated, gross margins associated with organic revenue have begun to rise as a result of improving production efficiencies along with higher utilization of production and engineering resources."

"In fiscal 2023 we anticipate ongoing revenue and margin growth driven by growth in existing customer programs, new customer programs and Lighthouse programs poised to transfer from product development into production. We continue to invest in our business to build sales and marketing, shift all three business sites to a common and updated operating and financial platform, and supplement our technical team in order to be positioned to take advantage of market trends and opportunities.  In this coming year in addition to continuing our revenue growth we will be focused on demonstrating increasing operating profitability."

"The strategic plan and vision to work with customers at the very early stages of the product development cycle to bring cutting edge technological capabilities in micro-optics, 3D optics and digital imaging to their products is in full effect. This has created a burgeoning production portfolio, which when coupled with a large pipeline of development projects and improved industry trends following the post-pandemic return of elective surgeries, puts us in a tremendous position to continue the progress we have made in fiscal 2022 into the future."

Update on Intent to List Shares on Nasdaq Capital Market

The Company successfully received approval from shareholders at its annual meeting in April 2022 to affect a reverse split if needed to satisfy the Nasdaq minimum share price requirement. The Company believes it has now satisfied all other requirements and is awaiting confirmation, or further comment, from Nasdaq.  With a positive response from Nasdaq, the Company anticipates the process of listing its shares on Nasdaq to be completed in the coming weeks."

The following table summarizes the fourth quarter and fiscal year (unaudited) results for the periods ended June 30, 2022 and 2021:

Three Months

Twelve Months

Ended June 30,

Ended June 30,

2022

2021

2022

2021

Revenues

$  4,793,511

$  2,673,266

$  15,678,248

$  10,674,907

Gross Profit

1,441,363

785,943

4,928,187

3,433,585

Stock Compensation Expenses

150,377

339,718

800,473

620,271

Business Acquisition Expenses

0

162,125

Other

1,711,456

884,657

5,479,480

3,718,887

Total Operating Expenses

1,861,833

1,224,375

6,442,078

4,339,158

Operating Income (Loss)

(420,470)

(438,432)

(1,513,891)

(905,573)

Net Income (Loss)

269,293

(442,443)

(928,418)

(102,826)

Income (Loss) per Share

Basic

$            0.02

$          (0.03)

$            (0.06)

$            (0.01)

Fully Diluted

$            0.02

$          (0.03)

$            (0.06)

$            (0.01)

Weighted Average Common Shares Outstanding

Basic

15,887,161

13,281,351

15,887,161

13,243,595

Fully Diluted

15,887,161

13,281,351

15,887,161

14,068,459

 

Conference Call Details

Date and Time: Tuesday, September 27, 2022, at 5:00pm ET

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 webcast, which is available at https://app.webinar.net/94M6mGLlvKa.

Replay: A teleconference replay of the call will be available until October 4, 2022 at (877) 344-7529 or (412) 317-0088, replay access code 4182019. A webcast replay will be available at https://app.webinar.net/94M6mGLlvKa.

About Precision Optics Corporation

Founded in 1982, Precision Optics is a vertically integrated optics company primarily focused on leveraging its proprietary micro-optics and 3D imaging technologies to the healthcare and defense/aerospace industries by providing services ranging from new product concept through mass manufacture.  Utilizing its leading-edge in-house design, prototype, regulatory and fabrication capabilities as well as its Lighthouse Imaging division's electronic imaging expertise and its Ross Optical division's high volume world-wide sourcing, inspecting and production resources, the Company is able to design and manufacture next-generation product solutions to the most challenging customer requirements. Within healthcare, Precision Optics enables next generation medical device companies around the world to meet the increasing demands of the surgical community who require more enhanced and smaller imaging systems for minimally invasive surgery as well as 3D endoscopy systems to support the rapid proliferation of surgical robotic systems. In addition to these next generation applications, Precision Optics has supplied top tier medical device companies a wide variety of optical products for decades, including complex endocouplers and specialized endoscopes. The Company is also leveraging its technical proficiency in micro-optics to enable leading edge defense/aerospace applications which require the highest quality standards and the optimization of size, weight and power. For more information, please visit www.poci.com.

Non-GAAP Financial Measures

Precision Optics has provided in this press release financial information that has not been prepared in accordance with accounting principles generally accepted in the Unites States of America ("non-GAAP"). The non-GAAP financial measure is adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). Adjusted EBITDA also excludes from Net income from continuing operations the effect of Stock-based compensation, Restructuring and other acquisition related expenses and Proceeds from extinguished debt relating to the SBA Payroll Protection Plan loan.

This non-GAAP financial measure assists Precision Optics management in comparing its operating performance over time because certain items may obscure the underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete acquisition or restructuring plans that are fundamentally different from the ongoing productivity of the Company. Precision Optics management also believes that presenting this measure allows investors to view its performance using the same measures that the Company uses in evaluating its financial and business performance and trends.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measure presented above to GAAP results has been provided in the financial tables included with this press release.

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 CORPORATION22 East BroadwayGardner, Massachusetts 01440-3338Telephone: 978-630-1800

Investor Contact:LYTHAM PARTNERS, LLCRobert BlumPhoenix | New YorkTelephone: 602-889-9700[email protected]

Following are the Company's Consolidated Balance Sheets at June 30, 2022 and June 30, 2021, and Statements of Operations, for the year ended June 30, 2022 and 2021:

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets at June 30, 2022 and 2021

2022

2021

ASSETS

Current Assets:

Cash and cash equivalents

$

605,749

$

861,650

Accounts receivable, net of allowance for doubtful accounts of $44,135 at June 30, 2022    and $251,383 at June 30, 2021

2,663,872

1,878,755

Inventories

3,022,147

1,885,395

Prepaid expenses

213,448

150,635

Total current assets

6,505,216

4,776,435

Fixed Assets:

Machinery and equipment

3,215,412

3,084,511

Leasehold improvements

843,903

792,723

Furniture and fixtures

219,999

178,640

4,279,314

4,055,874

Less—Accumulated depreciation and amortization

3,651,843

3,461,622

Net fixed assets

627,471

594,252

Operating lease right-to-use asset

517,725

61,247

Patents, net

229,398

141,702

Goodwill

8,824,210

687,664

TOTAL ASSETS

$

16,704,020

$

6,261,300

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Current portion of capital lease obligation

$

40,705

$

38,347

Current maturities of long-term debt

367,714

Current portion of acquisition earn out liability

166,667

166,667

Accounts payable

2,239,175

1,205,149

Customer advances

905,113

450,084

Accrued compensation and other

716,702

589,616

Operating lease liability

150,565

61,247

Total current liabilities

4,586,641

2,511,110

Capital lease obligation, net of current portion

111,691

152,397

Long-term debt, net of current maturities

1,961,141

Acquisition earn out liability, net of current portion

705,892

166,666

Operating lease liability, net of current portion

367,160

Stockholders' Equity:

Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 16,915,089 shares at June 30, 2022 and 13,282,476 shares at June 30, 2021

169,150

132,825

Additional paid-in capital

56,896,739

50,464,280

Accumulated deficit

(48,094,394)

(47,165,978)

Total stockholders' equity

8,971,495

3,431,127

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

16,704,020

$

6,261,300

 

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

for the Years Ended June 30, 2022 and 2021

2022

2021

Revenues

$

15,678,248

$

10,674,907

Cost of goods sold

10,750,061

7,241,322

Gross profit

4,928,187

3,433,585

Research and development expenses, net

666,479

624,253

Selling, general and administrative expenses

5,613,473

3,714,915

Business acquisition expenses

162,125

Total operating expenses

6,442,077

4,339,168

Operating loss

(1,513,890)

(905,583)

Other income (expense)

Interest expense

(155,658)

(5,302)

Gain on forgiveness of bank note

808,962

Gain on revaluation of contingent earn-out liability

742,084

Loss before provision for income taxes

(927,464)

(101,923)

Provision for income taxes

952

912

Net loss

$

(928,416)

$

(102,835)

Loss per share:

Basic and fully diluted

$

(0.06)

$

(0.01)

Weighted average common shares outstanding:

Basic and fully diluted

15,887,161

13,281,351

 

PRECISION OPTICS CORPORATION, INC AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA

Year Ended June 30

2022

2021

Net income from Continuing operations (GAAP)

$ (928,418)

$ (102,826)

Stock Based Compensation

915,494

733,930

Depreciation & Amortization

190,068

146,926

Interest Expense

159,538

5,302

Income Tax

952

912

Acquisition Expense

162,125

--

Other Income

(742,052)

Proceeds from Extinguished Debt

(808,962)

Adjusted EBITDA (non-GAAP)

$ (242,293)

$   (24,718)

 

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SOURCE Precision Optics Corporation



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