Precision Optics Reports Fourth Quarter and Fiscal Year 2020 Financial Results

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(TM) 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