GARDNER, Mass., Feb. 10 /PRNewswire-FirstCall/ -- Precision Optics Corporation, Inc. today announced operating results on an unaudited basis for the second quarter of fiscal year 2004 ended December 31, 2003.
Second Quarter Operating Results
Revenues - For the quarter ended December 31, 2003, revenues were $226,884 compared to $589,759 for the same period last year, a decrease of 61.5%.
Net Loss - For the quarter ended December 31, 2003, net loss was $1,018,790, or $0.58 per share, up $307,804, or 43% from the net loss of $710,986, or $0.41 per share, for the same period last year. The weighted average common shares outstanding were 1,752,052 during both periods.
Special Charges - Net loss for the quarter ended December 31, 2002 included a provision for restructuring of $53,131.
Six Months Operating Results
Revenues - For the six months ended December 31, 2003, revenues were $865,690 compared to $1,132,202 for the same period last year, a decrease of 23.5%.
Net Loss - For the six months ended December 31, 2003, net loss was $1,655,239, or $0.94 per share compared to the net loss of $1,502,877, or $0.86 per share, for the six months ended December 31, 2002. The weighted average common shares outstanding were 1,752,052 during both periods.
Special Charges - Net loss for the six months ended December 31, 2002 included a provision for restructuring of $53,131.
Cash Flow and Expenditures
For the quarter ended December 31, 2003, cash and cash equivalents decreased by approximately $1,024,000 compared to a decrease of approximately $754,000 for the previous quarter ended September 30, 2003. Cash disbursements during the quarter ended December 31, 2003, included approximately $330,000 for certain annual payments occurring only during the second quarter each year, such as annual insurance premiums and costs associated with preparation of annual reports and shareholder proxy materials.
Capital equipment expenditures during the six months ended December 31, 2003 were approximately $32,000, up 95% from the same period in 2002. Future capital expenditures will depend on future sales and the success of ongoing research and development efforts.
For the quarter ended December 31, 2003, research and development expenses were approximately $334,000, down 1% from $339,000 for the quarter ended December 31, 2002. Quarterly research and development expenses are expected to remain at this level for the foreseeable future but will ultimately depend on the Company’s assessment of new product opportunities.
The Company is currently reviewing alternatives for raising additional funds through public or private equity or debt financing. There can be no assurance that such funds will be available on satisfactory terms, if at all. Lack of necessary funds may require the Company to delay, scale back or eliminate some or all of its development efforts.
Expense Reduction
As previously announced, the Company has taken additional measures to realign its cost structure with current revenue expectations. In January 2004, the Company reduced its workforce by five full-time employees, a 15% reduction. As a result of this action, the Company expects to record a non- recurring pretax charge to earnings of approximately $51,900 for employee severance benefits in the quarter ending March 31, 2004. In addition, the Company is in the process of reviewing other expense areas to determine where additional reductions in discretionary spending can be achieved.
Outlook
The Company expects its recent pattern of quarter-to-quarter revenue fluctuations to continue, due to the uncertain timing of orders from customers and their size in relation to total revenues. The Company continues to move forward with new products and technical innovations, in particular, the development of a new generation (patent pending) of its world-class product line of 3-D endoscopes, the development of a new prototype 2.7 mm endoscope, and new instruments utilizing the Company’s new micro-precision(TM) lens technology (patent pending) for endoscopes under 1 mm.
About Precision Optics
Precision Optics Corporation, a leading developer and manufacturer of advanced optical instruments since 1982, designs and produces high-quality optical thin film coatings, medical instruments, and other advanced optical systems. The Company’s medical instrumentation line includes laparoscopes, arthroscopes and endocouplers and a world-class product line of 3-D endoscopes for use in minimally invasive surgical procedures. Precision Optics Corporation is certified to the ISO 9001 Quality Standard, and complies with the FDA Good Manufacturing Practices and the European Union Medical Device Directive for CE Marking of its medical products. The Company’s Internet Website is http://www.poci.com/ .
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED December 31, 2003 AND 2002 (UNAUDITED) -- THREE MONTHS -- -- SIX MONTHS -- 2003 2002 2003 2002 REVENUES $226,884 $589,759 $865,690 $1,132,202 COST OF GOODS SOLD 461,525 480,199 1,047,788 1,011,937 Gross Profit (Loss) (234,641) 109,560 (182,098) 120,265 RESEARCH and DEVELOPMENT 334,106 339,137 601,176 649,193 SELLING, GENERAL and ADMINISTRATIVE EXPENSES 454,328 431,091 883,658 933,320 PROVISION FOR ASSET IMPAIRMENT and RESTRUCTURING - 53,131 - 53,131 LOSS ON SALE OF ASSETS HELD FOR SALE - 14,602 - 20,041 Total Operating Expenses 788,434 837,961 1,484,834 1,655,685 Operating Loss (1,023,075) (728,401) (1,666,932) (1,535,420) INTEREST INCOME 4,288 17,739 11,742 39,105 INTEREST EXPENSE (3) (324) (49) (6,562) Net Loss $(1,018,790) $(710,986) $(1,655,239) $(1,502,877) Basic and Diluted Loss Per Share $(0.58) $(0.41) $(0.94) $(.86) Weighted Average Common Shares Outstanding 1,752,052 1,752,052 1,752,052 1,752,052 PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS December 31, 2003 June 30, 2003 CURRENT ASSETS Cash and Cash Equivalents $1,726,172 $3,504,414 Accounts Receivable, Net 113,190 191,669 Inventories 1,254,138 1,257,288 Prepaid Expenses 215,669 91,213 Assets Held for Sale - 152,550 Total Current Assets 3,309,169 5,197,134 PROPERTY AND EQUIPMENT 4,197,982 4,013,680 Less: Accumulated Depreciation (3,806,067) (3,723,350) Net Property and Equipment 391,915 290,330 OTHER ASSETS 238,890 236,156 TOTAL ASSETS $3,939,974 $5,723,620 LIABILITIES AND STOCKHOLDERS’ EQUITY TOTAL CURRENT LIABILITIES $407,165 $534,017 OTHER $- $1,555 STOCKHOLDERS’ EQUITY Common Stock, $.01 par value- Authorized -- 20,000,000 shares Issued and Outstanding - 1,752,052 shares at December 31, 2003 and June 30, 2003 17,521 17,521 Additional Paid-in Capital 27,770,175 27,770,175 Accumulated Deficit (24,254,887) (22,599,648) Total Stockholders’ Equity 3,532,809 5,188,048 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $3,939,974 $5,723,620
Forward-looking statements contained in this news release, including those related to the Company’s products under development and revenue estimates, are made under “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could materially affect future results. These risks and uncertainties, many of which are not within the Company’s control, include, but are not limited to, the uncertainty and timing of the successful development of the Company’s new products; the risks associated with reliance on a few key customers; the Company’s ability to maintain compliance with requirements for continued listing on the NASDAQ SmallCap Market; the Company’s ability to attract and retain personnel with the necessary scientific and technical skills, the timing and completion of significant orders; the timing and amount of the Company’s research and development expenditures; the timing and level of market acceptance of customers’ products for which the Company supplies components; performance of the Company’s vendors; the ability of the Company to control costs associated with performance under fixed price contracts; and the continued availability to the Company of essential supplies, materials and services; and the other risk factors and cautionary statements listed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission, including but not limited to, the Company’s Annual Report on Form 10-KSB for the year ended June 30, 2003.
Precision Optics Corporation, Inc.
CONTACT: Jack Dreimiller of Precision Optics Corporation, Inc.,+1-978-630-1800, ext. 117
Web site: http://www.poci.com/
