EX-99.1 2 v011520_ex99-1.htm Unassociated Document
 
 
 
PRECISION OPTICS CORPORATION
22 EAST BROADWAY
GARDNER, MASSACHUSETTS 01440-3338
Telephone 978 / 630-1800
Telefax 978 / 630-1487
 
POC:25-0001
Page 1 of 4
NEWS RELEASE
   
FOR IMMEDIATE RELEASE
Thursday, January 20, 2005

PRECISION OPTICS CORPORATION ANNOUNCES
SECOND QUARTER RESULTS

GARDNER, Massachusetts - Precision Optics Corporation, Inc. (Nasdaq: POCI) today announced operating results on an unaudited basis for the second quarter of fiscal year 2005 ended December 31, 2004.

Second Quarter Operating Results
Revenues - For the quarter ended December 31, 2004, revenues were $397,522 compared to $226,884 for the same period last year, an increase of 75.2%. Revenues in the quarter increased 50.7% from the preceding quarter ended September 30, 2004.

Net Loss - For the quarter ended December 31, 2004, net loss was $820,879, or $0.12 per share, an improvement of $197,911, from the net loss of $1,018,790, or $0.58 per share, for the same period last year. The weighted average common shares outstanding for the quarters ended December 31, 2004 and 2003 were 7,008,212 and 1,752,053, respectively.

Six Months Operating Results
Revenues - For the six months ended December 31, 2004, revenues were $661,332 compared to $865,690 for the same period last year, a decrease of 23.6%.

Net Loss - For the six months ended December 31, 2004, net loss was $1,754,337, or $0.27 per share, an increase of $99,098 compared to the net loss of $1,655,239, or $0.94 per share, for the six months ended December 31, 2003. The weighted average common shares outstanding for the six months ended December 31, 2004 and 2003 were 6,494,022 and 1,752,053, respectively.

Cash Flow and Expenditures
For the quarter ended December 31, 2004, the Company’s cash used in operating activities was $753,564, approximately the same level as the previous quarter ended September 30, 2004. Cash disbursements during the quarter ended December 31, 2004 included $125,414 for certain payments occurring only during the second quarter each year, such as annual insurance premiums and costs associated with preparation of annual reports and stockholder proxy materials.

Capital equipment expenditures for the six months ended December 31, 2004 were $26,039, down 18.0% from the previous period in 2003. Future capital expenditures will depend on future sales and the success of ongoing research and development efforts.

For the quarter ended December 31, 2004, research and development expenses were $223,069, down 33.2% from $334,106 a year earlier. The decrease reflects a shift in certain resources to customer-sponsored development efforts in the quarter (the costs of which are included in cost of goods sold), resulting in initial shipments of new products to several customers, as explained below. The level of future quarterly R&D expenses will ultimately depend on the Company’s assessment of new product opportunities.


  
     
     

Precision Optics Corporation—Second Quarter Results
Page 2 of 4

Customer Relationships
During the quarter and six months ended December 31, 2004, the Company’s revenues included initial shipments to several new customers of optical lenses and instruments which utilize the Company’s patent-pending micro-precision lensTM technology for applications which encompass a variety of innovative techniques involving minimally invasive surgery. The Company also delivered prototypes to a new customer of specialized lens systems for use in advanced night vision applications and provided thin film coatings to two other new customers for use in environmental monitoring and advanced laser instrumentation applications. These new initiatives accounted for approximately 23% and 15% of total Company revenues in the quarter and six months ended December 31, 2004, respectively.

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 prototype 2.7 mm endoscope, and new instruments utilizing the Company’s new micro-precisionTM lens technology (patent pending) for endoscopes under 1 mm. The Company continues to explore potential applications of single-molecule technology and nanotechnology, as well as potential near-term applications of the Company’s existing technologies in non-medical markets.

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.
 
The Company is currently developing specialty instruments incorporating its patent-pending LENSLOCKTM technology which ensures lower cost, easier repairability and enhanced durability as well as ultra-small instruments (some with lenses less than one millimeter in diameter) utilizing patent-pending micro-precisionTM lens technology. The Company is also exploring new initiatives in single-molecule technology and nanotechnology for biomedical and other applications.
 
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 www.poci.com.
 
  
     
    

Precision Optics Corporation—Second Quarter Results
Page 3 of 4
 
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
DECEMBER 31, 2004 AND 2003
(UNAUDITED)
 
   

 Three Months
Ended December 31, 

 Six Months
Ended December 31, 

  
     
2004
    
2003
    
2004
    
2003
  
 
REVENUES
$
397,522
  
$
226,884
  
$
661,332
  
$
865,690
  
 
COST OF GOODS SOLD
    
572,940
    
461,525
    
928,955
    
1,047,788
  
 
Gross Profit (Loss)
    
(175,418
)
  
(234,641
)
  
(267,623
)
  
(182,098
)
 
RESEARCH and DEVELOPMENT
    
223,069
    
334,106
    
579,475
    
601,176
  
 
SELLING, GENERAL and
ADMINISTRATIVE EXPENSES
    
436,727
    
454,328
    
934,166
    
883,658
  
 
                Total Operating Expenses
    
659,796
    
788,434
    
1,513,641
   
1,484,834
 
 
                Operating Loss
    
(835,214
)
  
(1,023,075
)
  
(1,781,264
)
  
(1,666,932
)
 
INTEREST INCOME
    
14,335
    
4,288
    
26,927
    
11,742
  
 
INTEREST EXPENSE
    
-
    
(3
)
  
-
    
(49
)
 
               Net Loss
  
$
(820,879
)
$
(1,018,790
)
$
(1,754,337
)
$
(1,655,239
)
 
Basic and Diluted Loss Per Share
 
$
(0.12
)
$
(0.58
)
$
(0.27
)
$
(0.94
)
 
Weighted Average Common Shares
      Outstanding
    
7,008,212
   
1,752,053
   
6,494,022
   
1,752,053
 
                           
 
  
     
    

Precision Optics Corporation—Second Quarter Results
Page 4 of 4

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
 
   

December 31, 2004

  

June 30, 2004

  
CURRENT ASSETS
          
Cash and Cash Equivalents
  
$
3,897,031
  
$
343,260
  
Accounts Receivable, Net
    
148,031
    
80,195
  
Inventories
    
732,921
    
917,998
  
Prepaid Expenses
    
117,348
    
80,646
  
Deferred Financing Costs
    
-
    
171,885
  
Total Current Assets
    
4,895,331
    
1,593,984
  
 
PROPERTY AND EQUIPMENT
    
4,225,874
    
4,199,835
  
Less: Accumulated Depreciation
    
(4,005,489
)
  
(3,920,593
)
Net Property and Equipment
    
220,385
    
279,242
  
 
OTHER ASSETS
    
210,902
    
224,088
  
 
TOTAL ASSETS
  
$
5,326,618
  
$
2,097,314
  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
TOTAL CURRENT LIABILITIES
  
$
543,000
  
$
593,342
  
           
 
STOCKHOLDERS' EQUITY
          
Common Stock, $.01 par value-
          
Authorized -- 20,000,000 shares
         
Issued and Outstanding - 7,008,212 shares
          
at December 31, 2004 and 1,752,053
         
shares at June 30, 2004
    
70,082
    
17,521
  
Additional Paid-in Capital
    
32,751,597
    
27,770,175
  
Accumulated Deficit
    
(28,038,061
)
  
(26,283,724
)
Total Stockholders' Equity
    
4,783,618
    
1,503,972
  
 
TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY
  
$
5,326,618
  
$
2,097,314
  
 
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; 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, 2004.

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