EX-99.1 2 v066572_ex99-1.htm
 

 
PRECISION OPTICS CORPORATION
22 EAST BROADWAY
GARDNER, MASSACHUSETTS 01440-3338
Telephone 978 / 630-1800
Telefax 978 / 630-1487
 
       POC: 27-0060
Page 1 of 4
 
NEWS RELEASE  
FOR IMMEDIATE RELEASE 
Thursday, February 15, 2007 
  
PRECISION OPTICS CORPORATION ANNOUNCES
SECOND QUARTER RESULTS
 
GARDNER, Massachusetts - Precision Optics Corporation, Inc. (OTC Bulletin Board: POCI.OB), (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.

Precision Optics Corporation—Second Quarter Results  Page 2 of 4

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™ technology (patent pending) to its entire line of endoscopes; instrumentation utilizing the Company’s micro-precision™ 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 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, 2006 AND 2005
(UNAUDITED)
 
   
Three Months
Ended December 31, 
  
Six Months
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—Second Quarter Results  Page 4 of 4
 
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIESCONSOLIDATED  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.
 
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