SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
April 30, 2002 (April 26, 2002)
PRECISION OPTICS CORPORATION, INC.
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(Exact name of registrant as specified in its charter)
Massachusetts 001-10647 04-2795294
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(State or other jurisdiction of (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
22 East Broadway, Gardner, Massachusetts 01440
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 630-1800
Item 5. Other Events.
On April 26, 2002, the Registrant issued the following press release announcing
operating results on an unaudited basis for the third quarter and nine months of
fiscal year 2002 ended March 31, 2002:
FOR IMMEDIATE RELEASE Friday, April 26, 2002
PRECISION OPTICS CORPORATION ANNOUNCES
THIRD QUARTER RESULTS
GARDNER, Massachusetts - Precision Optics Corporation, Inc. (Nasdaq: POCI) today
announced operating results on an unaudited basis for the third quarter and nine
months of fiscal year 2002 ended March 31, 2002.
OPERATING RESULTS
Revenues for the quarter were $358,896, compared to $1,133,984 for the same
period in fiscal year 2001, a decrease of 68.4%. Revenues increased 11%
sequentially from the quarter ended December 31, 2001. Net loss was $1,140,950,
or $0.11 per share, compared to $1,110,948 or $0.11 per share, for the same
period last year. The weighted average common shares outstanding were 10,503,908
compared to 10,498,908 for the same period last year.
For the nine months ended March 31, 2002, revenues were $1,173,306 compared to
$2,800,817 for the same period last year, a decrease of 58.1%. Net loss,
including charges for asset impairment, restructuring and inventory write-down
totaling $4,652,628 as previously announced in earlier press releases dated
November 8, 2001 and January 29, 2002, was $8,642,180, or $0.82 per share,
compared to $2,402,833 or $0.23 per share, for the same period last year. The
weighted average common shares outstanding were 10,503,908 compared to
10,464,586 for the same period last year.
The revenue decrease from the prior year for the third quarter was due primarily
to lower sales of medical products (down 59%) and lower sales of non-medical
products (down 89%). For the quarter ended March 31, 2002, medical sales were
lower due primarily to significantly lower shipments of stereo endoscopes and
related products, and non-medical sales were lower due primarily to lower sales
of Dense Wavelength Division Multiplexing (DWDM) filters and filter test
equipment.
The revenue decrease from the prior year for the nine months ended March 31,
2002 was due to lower sales of medical products (down 59%), and lower sales of
non-medical products (down 54%). For the nine months ended March 31, 2002,
medical sales were lower due primarily to lower sales of stereo endoscopes and
related products. Non-medical sales were lower due primarily to lower sales of
DWDM filters. DWDM filter sales represented 9% of total revenues during the nine
months ended March 31, 2002 compared to 15.5% for the corresponding period of
the prior year (representing a reduction in filter sales of approximately 75%).
OUTLOOK
The asset impairment, restructuring and workforce reduction measures implemented
earlier in the fiscal year, and other cost saving measures, are expected to
result in a reduction in future annual expenses. During the quarter ended March
31, 2002, total recurring operating expenses (excluding
inventory purchases) were approximately $1.2 million (or 46%) lower than the
$2.6 million for the quarter ended June 30, 2001, which was prior to
implementation of these cost reduction initiatives. Going forward, these cost
reduction measures are expected to result in expense savings of at least $4
million per year, of which approximately $3.2 million per year represent actual
cash savings.
For the quarter ended March 31, 2002, cash and cash equivalents decreased by
approximately $1,009,000, a 23% sequential decrease in cash usage from the
previous quarter ended December 31, 2001. A further reduction in the rate of
cash usage is anticipated during the quarter ending June 30, 2002.
Capital equipment expenditures during the nine months ended March 31, 2002 were
approximately $73,000, down 98% from the $3.3 million for the same period last
year. It is anticipated that the level of capital spending for the balance of
fiscal year 2002 and for the foreseeable future will continue to be
substantially lower than last year.
For the quarter ended March 31, 2002, research and development expenses were
approximately $503,000, down 42.7% from the $879,000 for the quarter ended March
31, 2001. It is anticipated that the quarterly level of R&D expenses for the
balance of fiscal year 2002 and for the foreseeable future will be substantially
lower than last year.
The Company is pursuing advances on several fronts in the medical area and
certain non-medical applications. Among these initiatives are improvements in
medical instrument lens coatings, a new 30 degree line of sight version of the
successful 5 mm Laparoscope, and other new products. The Company also recently
announced several major successes related to its medical instrument business:
- The first production shipment of autoclavable endoscopes in March
2002.
- Receipt of new orders for stereo endoscopes and related products.
- Receipt of new orders for the development and production of a relay
lens system for use in medical digital photo microscopy.
As a result of these new orders for medical products, the Company anticipates
that its sales in the quarter ending June 30, 2002, will be significantly higher
than the quarter ended March 31, 2002.
RECENT ACHIEVEMENTS OF ISO 9001 AND CE MARK CERTIFICATION, AS RECENTLY
ANNOUNCED, ARE ALSO EXPECTED TO SUPPORT INCREASED FUTURE SALES OPPORTUNITIES,
BOTH FOREIGN AND DOMESTIC, FOR THE COMPANY'S MEDICAL PRODUCTS.
ABOUT PRECISION OPTICS
Precision Optics Corporation, a leading manufacturer of optical thin films and
optical instruments since 1984, designs and manufactures high-quality optical
thin film coatings, medical instruments, and other advanced optical systems.
Major applications for the Company's thin film coatings have included DWDM
filters used to increase the bandwidth capacity of fiber-optic
telecommunications networks. The Company's medical instrumentation line includes
laparoscopes, arthroscopes and endocouplers and a world-class 3-D endoscope for
use in minimally invasive surgical procedures. 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.info@poci.com.
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PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRD QUARTER AND NINE MONTHS ENDED
MARCH 31, 2002 AND 2001
-- THIRD QUARTER -- -- NINE MONTHS --
2002 2001 2002 2001
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(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
REVENUES $ 358,896 $ 1,133,984 $ 1,173,306 $ 2,800,817
COST OF GOODS SOLD 466,033 920,578 2,438,945 2,099,185
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GROSS PROFIT (LOSS) (107,137) 213,406 (1,265,639) 701,632
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RESEARCH and DEVELOPMENT 503,401 878,715 1,916,298 2,216,164
SELLING, GENERAL and
ADMINISTRATIVE EXPENSES 553,045 629,456 1,501,214 1,528,006
PROVISION FOR ASSET IMPAIRMENT and
RESTRUCTURING -- -- 4,112,628 --
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TOTAL OPERATING EXPENSES 1,056,446 1,508,171 7,530,140 3,744,170
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OPERATING LOSS (1,163,583) (1,294,765) (8,795,779) (3,042,538)
INTEREST EXPENSE (7,384) (2,544) (13,051) (9,640)
INTEREST INCOME 30,017 186,361 166,650 649,345
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NET LOSS $(1,140,950) $(1,110,948) $(8,642,180) $(2,402,833)
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BASIC and DILUTED LOSS PER SHARE ($0.11) ($0.11) ($0.82) ($0.23)
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WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 10,503,908 10,498,908 10,503,908 10,464,586
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PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
March 31, 2002 June 30, 2001
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CURRENT ASSETS
Cash and Cash Equivalents $ 6,730,662 $10,530,298
Accounts Receivable, Net 190,902 1,003,496
Inventories 1,115,036 1,524,119
Refundable Income Taxes 13,849 -
Prepaid Expenses 143,226 109,760
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Total Current Assets 8,193,675 13,167,673
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PROPERTY AND EQUIPMENT 5,997,710 9,386,047
Less: Accumulated Depreciation (3,985,999) (3,600,380)
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Net Property and Equipment 2,011,711 5,785,667
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OTHER ASSETS 278,304 266,671
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TOTAL ASSETS $10,483,690 $19,220,011
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LIABILITIES AND STOCKHOLDERS' EQUITY
TOTAL CURRENT LIABILITIES $ 656,259 $ 1,062,056
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ACCRUED RESTRUCTURING EXPENSE - NONCURRENT 353,250 ---
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CAPITAL LEASE OBLIGATION AND OTHER 27,109 68,703
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STOCKHOLDERS' EQUITY
Common Stock, $.01 par value-
Authorized -- 20,000,000 shares
Issued and Outstanding - 10,503,908 shares
at March 31, 2002 and
June 30, 2001 105,039 105,039
Additional Paid-in Capital 27,682,657 27,682,657
Accumulated Deficit (18,340,624) (9,698,444)
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Total Stockholders' Equity 9,447,072 18,089,252
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,483,690 $19,220,011
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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. Among these risk factors are general economic
and business conditions and growth in the optical communications and medical
product markets, market acceptance of the Company's products, the timing and
level of market acceptance of customers' products for which the Company supplies
components, the impact of competitive products and pricing, performance by the
Company's vendors, availability of third-party components, cost and yields
associated with production of the Company's optical communications and other
products, the ability of the Company to successfully and in a timely manner
complete product and process development efforts, and the other risk factors and
cautionary
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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, 2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRECISION OPTICS CORPORATION, INC.
Date: April 30, 2002 By: /s/ Jack P. Dreimiller
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Name: Jack P. Dreimiller
Title: Senior Vice President, Finance and
Chief Financial Officer