Precision Optics Corporation Reports Decline in Revenue and Increased Net Loss for Q2 FY 2025

Precision Optics Corporation, Inc. reported a decline in financial performance for the second quarter of fiscal year 2025, with total revenues of $4.53 million, down 6.2% from $4.82 million in the same period last year. For the six months ending December 31, 2024, revenues decreased by 4.6% to $8.72 million compared to $9.15 million in the prior year. The company experienced a significant drop in revenue from its Engineering Design Services, which fell by 46.8% in the quarter and 26.7% in the six-month period, attributed to reduced demand and delays in project milestones. Conversely, revenue from Optical Components increased by 50.8% and 30.4% for the respective periods, driven by new defense and medical device programs.

The company's gross profit also declined, with a gross margin of 23.6% for the quarter, down from 30.1% a year earlier. Gross profit for the quarter was $1.07 million, compared to $1.45 million in the previous year. For the six-month period, gross profit decreased to $2.19 million from $2.91 million, reflecting changes in product sales mix and overall revenue declines. Research and Development (R&D) expenses rose significantly, increasing by 43.3% to $317,747 for the quarter and by 65.3% to $718,406 for the six months, as the company focused on product improvements and new technology development.

Operationally, Precision Optics reported a net loss of $969,681 for the quarter, compared to a loss of $758,802 in the same period last year. The loss per share for the quarter was $(0.15), compared to $(0.13) in the prior year. The company’s total liabilities increased to $8.03 million as of December 31, 2024, up from $6.84 million at the end of the previous fiscal year, primarily due to increased accounts payable and contract liabilities. The company’s cash and cash equivalents decreased to $212,441 from $405,278, reflecting ongoing operational challenges.

In terms of strategic developments, Precision Optics continues to focus on expanding its product offerings and market presence. The company has made significant investments in R&D to enhance its capabilities in micro-precision optics and single-use endoscopes, which are expected to grow at a faster rate than the overall market. The company is also actively pursuing new design and development contracts while maintaining a strong pipeline of projects with established medical device companies.

Looking ahead, management believes that the available cash, operational cash flow, and access to credit will be sufficient to meet working capital needs for at least the next 12 months. However, they acknowledge the potential need for additional financing in the short term. The company remains committed to navigating the competitive landscape and leveraging its technological advancements to capture market opportunities in the medical device sector.