GARDNER, Mass., Feb. 15 /PRNewswire-FirstCall/ -- Precision Optics Corporation, Inc. (the “Company”) today announced operating results on an unaudited basis for the second quarter of fiscal year 2007 ended December 31, 2006.
Second Quarter Operating Results
Revenues -- For the quarter ended December 31, 2006, revenues were $470,811 compared to $519,950 for the quarter ended December 31, 2005, a decrease of 9%.
Net Loss -- For the quarter ended December 31, 2006, net loss was $763,183, or $0.05 per share, an increase of $126,791 from the net loss of $636,392 or $0.09 per share, for the quarter ended December 31, 2005. The increase is primarily a result of a non-cash charge of $50,906 related to stock-based compensation expense following the adoption of Statement of Financial Accounting Standards No. 123 revised (SFAS No. 123(R)) on July 1, 2006, along with increased sales and marketing activities and higher professional fees. The weighted average common shares outstanding for the quarters ended December 31, 2006 and 2005 were 15,458,212 and 7,008,212, respectively.
Cash Flow and Expenditures -- For the quarter ended December 31, 2006, cash and cash equivalents decreased by $722,689 compared to a decrease of $722,866 for the same period last year.
For the quarter ended December 31, 2006, research and development expenses were $378,954, increasing $32,786 from the quarter ended December 31, 2005. These expenses include a shift from previous activities aimed at the development of new technologies to applications of these technologies for customer-driven product development. The level of future quarterly R&D expenses will ultimately depend on the Company’s assessment of new product opportunities and available cash resources.
Selling, general and administrative expenses increased by $132,655, or 32%, for the quarter ended December 31, 2006 compared to the quarter ended December 31, 2005. This increase was primarily a result of a non-cash charge of $50,906 related to stock-based compensation expense following the adoption of SFAS No. 123(R) on July 1, 2006, along with enhanced sales and marketing activities focused on increasing sales of recently developed products and higher professional fees.
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. The Company believes that the recent introduction of several new products, along with new and ongoing customer relationships, will generate additional revenues, which are required in order for the Company to achieve profitability. In the coming months the Company will continue to focus its efforts on marketing products recently introduced or redesigned. The Company believes that these marketing activities, if successful, may result in the overall growth of sales.
About Precision Optics
Precision Optics Corporation, a leading developer and manufacturer of advanced optical instruments since 1982, designs and produces high-quality medical instruments, optical thin film coatings, 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. The Company continues to advance products through technical innovation, including development of: the next generation (patent pending) of 3-D endoscopes; the extension of Lenslock(TM) technology (patent pending) to its entire line of endoscopes; instrumentation utilizing the Company’s micro-precision(TM) lens technology (patent pending) for optical components; assemblies and endoscopes under 1 mm. Precision Optics Corporation is registered to ISO 9001:2000, ISO 13485:2003, and CMDCAS Quality Standards, 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, 2006 AND 2005 (UNAUDITED) Three Months Six Months Ended December 31, Ended December 31, 2006 2005 2006 2005 REVENUES $470,811 $519,950 $898,436 $930,382 COST OF GOODS SOLD 316,437 403,101 699,897 837,027 Gross Profit / (Loss) 154,374 116,849 198,539 93,355 RESEARCH and DEVELOPMENT EXPENSES 378,954 346,168 643,477 633,998 SELLING, GENERAL and ADMINISTRATIVE EXPENSES 545,994 413,339 1,029,020 836,732 GAIN ON SALE OF FIXED ASSETS - - - (165,700) Total Operating Expenses 924,948 759,507 1,672,497 1,305,030 Operating Loss (770,574) (642,658) (1,473,958) (1,211,675) INTEREST INCOME 7,391 6,266 22,595 15,412 Net Loss $(763,183) $(636,392) $(1,451,363) $(1,196,263) Basic and Diluted Loss Per Share $(0.05) $(0.09) $(0.09) $ (0.17) Weighted Average Common Shares Outstanding - Basic and Diluted 15,458,212 7,008,212 15,458,212 7,008,212 PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS December 31, 2006 June 30, 2006 CURRENT ASSETS Cash and Cash Equivalents $552,290 $2,030,428 Accounts Receivable, net 319,803 381,097 Inventories, net 511,559 445,802 Prepaid Expenses 105,734 45,912 Total Current Assets 1,489,386 2,903,239 PROPERTY AND EQUIPMENT Machinery and Equipment 3,516,860 3,513,736 Leasehold Improvements 553,596 553,596 Furniture and Fixtures 136,762 93,545 Vehicles 42,343 42,343 4,249,561 4,203,220 Less: Accumulated Depreciation (4,119,768) (4,127,287) Net Property and Equipment 129,793 75,933 OTHER ASSETS Cash surrender value of life insurance policies 13,246 13,246 Patents, net 277,903 236,115 Total Other Assets 291,149 249,361 TOTAL ASSETS $1,910,328 $3,228,533 LIABILITIES AND STOCKHOLDERS’ EQUITY TOTAL CURRENT LIABILITIES 627,995 588,636 STOCKHOLDERS’ EQUITY Common Stock, $.01 par value- Authorized -- 20,000,000 shares Issued and Outstanding -15,458,212 shares at December 31, 2006 and at June 30, 2006 154,582 154,582 Additional Paid-in Capital 34,823,671 34,729,873 Accumulated Deficit (33,695,920) (32,244,558) Total Stockholders’ Equity 1,282,333 2,639,897 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $1,910,328 $3,228,533
Forward-looking statements contained in this news release, including those related to the future success of Company’s newly released products and products under development 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; decisions by customers to place orders for the Company’s products; the risks associated with reliance on a few key customers; 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; 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, 2006.
Precision Optics Corporation, Inc.
CONTACT: Pamela Galaid of Precision Optics Corporation, Inc.,+1-978-630-1800
Web site: http://www.poci.com/
