Precision Optics Corporation Reports Decline in Revenue and Increased Losses in Q3 2024

Precision Optics Corporation, Inc. reported its financial results for the three months ended September 30, 2024, revealing a decline in revenue and increased losses compared to the same period in the previous year. Total revenues for the quarter were $4,197,053, a decrease of $124,202 (2.9%) from $4,321,255 in the prior year. The revenue breakdown showed a 9.3% increase in Optical Components revenue to $2,080,188, while Engineering Design Services revenue fell by 2.6% due to reduced capacity from heightened R&D activities. Notably, revenue from Finished Products and Assemblies plummeted by 48.6%, primarily due to a manufacturing pause for a defense/aerospace customer.

Gross profit for the quarter was $1,117,330, down from $1,463,611 in the prior year, resulting in a gross margin decrease to 26.6% from 33.9%. The company reported an operating loss of $(1,246,941), significantly higher than the $(405,293) loss recorded in the same quarter of 2023. The net loss for the period was $(1,311,247), compared to $(464,415) in the prior year, leading to a basic and fully diluted loss per share of $(0.21), up from $(0.08).

Cash and cash equivalents increased to $635,572 as of September 30, 2024, from $405,278 at the end of June 2024. Total current assets rose to $7,508,263, while total liabilities increased to $7,101,214, resulting in total stockholders’ equity of $10,137,447. The company issued 265,868 shares of common stock during the quarter, generating net proceeds of $1,204,542.

Research and Development (R&D) expenses surged to $400,659, reflecting the company's commitment to product improvements and new technologies. Selling, General and Administrative (SG&A) expenses also rose by 18.6% to $1,963,612, driven by increased recruitment costs and bad debt expenses.

The company continues to navigate a competitive landscape, focusing on advanced endoscopy visualization systems for various medical applications. It has made strategic acquisitions in recent years, including Ross Optical and Lighthouse Imaging, to enhance its capabilities in optical components and medical visualization devices. However, it faces challenges, including a failure to meet the minimum annual debt service coverage ratio, which led to a waiver from its lender. Amendments to loan agreements have allowed for a six-month period of interest-only payments starting October 15, 2024.

Overall, Precision Optics Corporation is actively investing in R&D and expanding its product offerings while managing financial pressures and operational challenges.