PRECISION OPTICS CORPORATION, INC. SEC 10-Q Report

Precision Optics Corporation, Inc., a leader in the design and manufacture of advanced optical instruments, has released its Form 10-Q report for the second quarter of fiscal year 2024. The report highlights the company's financial performance and operational activities, providing insights into the challenges and opportunities faced during the period.

Financial Highlights

Revenues: The company reported revenues of $8.72 million, a decrease of 4.6% compared to the same period last year. This decline was primarily due to reduced demand for Engineering Design Services and Finished Products and Assemblies.

Gross Profit: Gross profit for the quarter was $2.19 million, down from $2.91 million in the prior year. The decrease was mainly driven by changes in the product sales mix and lower overall revenue.

Operating Income (Loss): The company reported an operating loss of $(2.16) million, reflecting increased research and development expenses and a decrease in gross profit.

Net Income (Loss): Net loss for the quarter was $(2.28) million, compared to $(1.22) million in the prior year. The increased loss was impacted by lower revenues and higher operating expenses.

Income (Loss) Per Share - Basic and Fully Diluted: The loss per share was $(0.36), compared to $(0.20) in the prior year, due to the increased net loss.

Business Highlights

Revenue Segments: The company experienced a significant shift in its revenue composition. Engineering Design Services saw a decrease of 46.8% in the three months and 26.7% in the six months ending December 31, 2024, due to reduced demand and delays in milestone completion. Conversely, Optical Components revenue increased by 50.8% in the three months and 30.4% in the six months, driven by new defense/aerospace and medical device programs. Finished Products and Assemblies revenue decreased by 41.7% and 45.0% in the three and six months, respectively, due to lower demand and timing of order fulfillment.

Research & Development: R&D expenses increased significantly, reflecting the company's focus on product improvements and the development of new technologies, particularly in the evolving single-use medical device environment.

Selling, General and Administrative Expenses: SG&A expenses decreased by 14.0% in the three months ending December 31, 2024, primarily due to lower bad debt expense and stock-based compensation. However, there was a slight increase of 1.0% in the six months period.

Future Outlook: The company anticipates continued expansion of its customer pipeline as development projects transition to production orders. It plans to invest in research and development, focusing on Microprecision optics, micro medical cameras, illumination, single-use endoscopes, and 3D endoscopes. The company is also targeting the growing single-use endoscope market, which is expanding at a rate two to three times faster than the overall minimally invasive surgical market.

SEC Filing: PRECISION OPTICS CORPORATION, INC. [ POCI ] - 10-Q - Feb. 13, 2025