Precision Optics (NasdaqCM:POCI) Q2 2026 Earnings call February 17, 2026 05:00 PM ET Company ParticipantsJoe Forkey - CEORobert Blum - Managing Partner and Managing Investor RelationsWayne Coll - CFOOperatorGood day, and welcome to the Precision Optics Reports second quarter fiscal year 2026 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, ...

Financial Data and Key Metrics Changes - Revenue for Q2 reached a record $7.4 million, up from $4.5 million in the same quarter last year and $6.7 million in the previous quarter [6][23] - Production revenue was approximately $6.4 million, compared to $3.1 million in the year-ago quarter and $6.0 million in the prior sequential quarter [23] - Gross margins were 2.8%, down from 14.2% in the prior sequential quarter and 23.6% in the year-ago quarter [24] Business Line Data and Key Metrics Changes - Aerospace program generated $2.7 million in revenue during Q2, maintaining high-volume performance [9] - Single-use cystoscope program generated $2.0 million in revenue, marking the sixth consecutive quarter with record revenue [11] - Engineering revenue was $1 million, down from $1.2 million in the year-ago quarter but up from $700,000 in the previous quarter [23] Market Data and Key Metrics Changes - The single-use endoscope market is expected to grow at mid to high teens annual growth rates over the next 10 years [18] - Strong interest in technologies from the defense aerospace market, particularly for next-generation systems, supports expectations for double-digit annual growth rates [18] Company Strategy and Development Direction - The company is focused on operational improvements and has invested in sales, leadership, and marketing efforts [8] - The production business is seen as a long-term growth trajectory that will create significant value for shareholders [30] - The company is increasing full-year revenue guidance to a range of $26 million-$28 million, up from $25 million previously estimated [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that fiscal 2026 is a transition year, building infrastructure for a larger production business [30] - Operational improvements are expected to lead to positive Adjusted EBITDA beginning in Q4 [15][21] - The company is confident in its business model and the markets it serves, anticipating substantial growth over the coming quarters and years [22] Other Important Information - The company has made leadership changes, including the appointment of a new COO to address operational challenges [7] - Cash at the end of December was approximately $900,000, with bank debt at $1.6 million [26] - The company is negotiating to increase the use of debt capital to fund business expansion and working capital needs [27] Q&A Session Summary Question: Can you clarify if the design revisions required to fix yield shortfalls are within your control? - The design change has been approved by the customer, and initial parts have been received. Production is anticipated to start in the next month [33] Question: Can you comment on facility changes and when they will be operational? - Facility updates have been completed, and a more substantial overhaul is planned over the next 6-12 months [37] Question: How certain are you that you'll reach positive EBITDA without dilution? - Loan discussions are advanced, and the company is confident in securing funding without needing to raise equity [39] Question: What long-term return is expected on investments in production infrastructure? - Investments in operations and management infrastructure are expected to support significantly higher production revenue [44] Question: Which program is receiving higher than expected order flow? - The aerospace program and the single-use cystoscope are both ramping faster than originally anticipated [45]

Precision Optics (NasdaqCM:POCI) Q2 2026 Earnings call February 17, 2026 05:00 PM ET Speaker1Good day, and welcome to the Precision Optics Reports second quarter fiscal year 2026 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touchtone phone. T ...

Core Viewpoint - Precision Optics Corporation reported record revenue of $7.4 million for Q2 FY 2026, reflecting a 63% increase year-over-year, driven by strong demand in its core production programs and significant growth in its aerospace and single-use cystoscope programs [3][6]. Financial Highlights - Q2 FY 2026 revenues reached $7,369,837, compared to $4,526,907 in Q2 FY 2025, marking a 63% increase [5][6]. - Production revenue was $6.4 million, a 105% increase from $3.1 million in the same quarter of the previous fiscal year [6]. - Engineering revenue decreased to $1.0 million from $1.4 million year-over-year, a decline of 29% [6]. - Gross profit for Q2 FY 2026 was $204,660, with gross margins at 2.8%, down from 23.6% in the same quarter of the previous fiscal year [6][7]. - The net loss for the quarter was $(1.8) million, compared to $(1.0) million in Q2 FY 2025 [6][7]. Future Guidance - The company projects FY 2026 revenue to be between $26 million and $28 million, indicating a growth of 36% to 47% over FY 2025 [6]. - Adjusted EBITDA for FY 2026 is expected to be approximately $(2.5) to $(3.0) million, an improvement from $(3.7) million in FY 2025 [6]. Operational Insights - The company is investing in infrastructure to enhance production efficiency and is seeing operational improvements under new leadership [4]. - Product Development bookings have increased for three consecutive quarters, reaching their highest level in over a year [4]. - The Ross Optical division is entering Q3 with its strongest backlog in more than three years, positioning the company for profitable growth [4].

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2025 or For the transition period from to Commission File Number: 001-10647 PRECISION OPTICS CORPORATION, INC. (Exact name of registrant as specified in its charter) (State or other juris ...

Core Viewpoint - Precision Optics Corporation is set to announce its second quarter fiscal year 2026 financial results on February 17, 2026, followed by a conference call to discuss these results [1][2]. Company Overview - Precision Optics Corporation, founded in 1982, specializes in advanced optical instruments for the medical and defense/aerospace industries, leveraging proprietary technologies in micro-optics, 3D imaging, and digital imaging [5]. - The company provides comprehensive services from product concept to mass manufacturing, utilizing in-house design, regulatory, and fabrication capabilities [5]. - In the healthcare sector, Precision Optics supports the development of enhanced imaging systems for minimally invasive surgeries and 3D endoscopy systems, catering to the growing demands of the surgical community [5]. - The company also applies its micro-optics expertise to defense/aerospace applications, focusing on high-quality standards and optimization of size, weight, and power [5]. Conference Call Details - The conference call is scheduled for February 17, 2026, at 5:00 p.m. ET, with access available via phone or live webcast [3]. - Call-in numbers include (844) 735-3662 or (412) 317-5705, and the webcast can be accessed at https://app.webinar.net/Zo5aLdzPzmg [3]. - A replay of the call will be available for seven days, with specific numbers and access codes provided for teleconference and webcast replays [4].

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $6.7 million for Q1 2026, a 46% increase compared to the same quarter a year ago [6][25] - Gross margins were 14.4%, up from 12.9% in the prior quarter but down from 26.6% in the same quarter last year [26] - The net loss for the quarter was $1.6 million, compared to a loss of $1.3 million in the year-ago quarter [27] Business Line Data and Key Metrics Changes - Production revenue was approximately $6 million, significantly up from $2.6 million in the year-ago quarter [25] - Aerospace program revenue reached $2.7 million, while the cystoscope program achieved $1.9 million [25] - Engineering revenue decreased to $656,000 from $1.6 million in the year-ago quarter [25] Market Data and Key Metrics Changes - The aerospace program revenue net of tariffs was $2.5 million, representing an 800% increase year-over-year [11] - The cystoscope program revenue was $1.5 million net of tariff reimbursements, an 180% increase year-over-year [13] - The Ross Optical Division saw a 10% revenue increase quarter-over-quarter, reaching over $1 million [16] Company Strategy and Development Direction - The company is focusing on expanding its presence in the defense and aerospace markets while maintaining its commitment to the medical device sector [33] - New product development programs are expected to ramp up, with two significant agreements recently signed [10][20] - The company anticipates fiscal year 2026 revenue to exceed $25 million, with a positive adjusted EBITDA of approximately $500,000 [10][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing higher top-line revenue and improving gross margins, indicating a transition to a new operational level [11][30] - The company expects significant increases in product development revenues in the upcoming quarters, driven by new orders and a recovering optical components market [26][19] - Management acknowledged challenges in ramping production but believes that improvements in infrastructure and processes will yield long-term benefits [9][30] Other Important Information - The company has made substantial progress in improving production efficiency and expects to see benefits from recent investments in infrastructure [15][30] - Cash at the end of September was approximately $1.4 million, with debt at $1.7 million [28] Q&A Session Summary Question: Is the company pivoting towards defense and aerospace applications? - Management clarified that while they are promoting themselves more in the defense aerospace marketplace, this is in addition to their medical device focus [33] Question: Can you discuss capacity utilization and revenue support? - Management indicated that facility updates are ongoing, and they expect to have sufficient capacity to double current production levels without significant additional costs [35] Question: Can you break out COGS in terms of labor versus materials versus overhead? - Management explained that different divisions have varying cost structures, with manufacturing having significant material costs and micro-optics being labor-intensive [39] Question: What is the cause for the delay in the legacy defense program reorder? - Management speculated that the delay might be related to government activities but confirmed they do not have definitive information [42] Question: What are the average lifespans of defense versus medical programs? - Management noted that medical devices typically last at least five years, while defense programs also tend to have long lifespans, often in the 5-10 year range [46][48]

Core Viewpoint - Precision Optics Corporation reported record quarterly revenue of $6.7 million for Q1 FY 2026, a 59% increase year-over-year, driven by multi-year agreements with aerospace and surgical robotics companies [4][5]. Financial Highlights - Revenue for Q1 FY 2026 was $6.7 million, up from $4.2 million in the same quarter of the previous fiscal year, representing a growth of approximately 59% [5]. - Production revenue reached $6.0 million, a 133% increase from $2.6 million in the same quarter of the previous fiscal year [5]. - Engineering revenue decreased to $0.7 million from $1.6 million, a decline of 59% [5]. - Gross margins were 14.2%, down from 26.6% in the same quarter of the previous fiscal year [5]. - The net loss for the quarter was $(1.6) million, compared to $(1.3) million in the same quarter of the previous fiscal year [5]. - Adjusted EBITDA was $(1.2) million for the quarter, compared to $(1.0) million in the same quarter of the previous fiscal year [5]. Recent Developments - The company accepted a $700,000 product development order for an advanced augmented reality system and a $678,000 agreement for a high-end borescope for jet engines [5]. - Increased production to meet demand from a top-tier aerospace company, generating $2.5 million in revenue from this customer [5]. - Introduced a second production line for single-use endoscope assemblies, resulting in $1.6 million in revenue from a leading surgical company [5]. Financial Guidance - The company projects FY 2026 revenue to exceed $25 million, indicating a 31% growth over FY 2025 revenue [5]. - Projected Adjusted EBITDA for FY 2026 is approximately $0.5 million, a significant improvement from $(3.7) million in FY 2025 [5].

Revenue Performance - Total revenues for the quarter ending September 30, 2025, were $6,680,823, an increase of 59.2% compared to $4,197,053 for the same period in the prior year [64]. - Revenue from Systems Manufacturing increased by 297.3% during the quarter, primarily due to significant increases in customer demand [65]. Profitability - Gross profit decreased to $946,358, with a gross margin of 14.2%, down from 26.6% in the same quarter of the previous year [67]. Expenses - R&D expenses decreased by $88,819 to $311,840, reflecting ongoing efforts in product improvements and new technology development [68]. - SG&A expenses increased by 13.6% to $2,229,773, primarily due to increased stock compensation and consulting expenses [69]. Cash Flow - Net cash provided by operating activities totaled $78,227, a significant improvement from $318,622 net cash used in the same period last year [71]. - Capital equipment expenditures during the quarter were $523,539, compared to $28,099 in the same period of the prior year [76]. Financial Commitments - Contractual cash commitments related to open purchase orders as of September 30, 2025, were approximately $7,402,000 [77]. - The company has no off-balance sheet arrangements that could materially affect its financial condition [78]. - The company may require external financing in the short term to meet working capital needs [70].

Core Insights - Precision Optics Corporation has received a product development order for a next-generation borescope system intended for inspecting jet engines from a major aerospace and defense company [1][3] - The new borescope will feature high-definition resolution exceeding 1080p and is designed to endure extreme conditions within advanced jet engines [2] - The initial development order is valued at $678,000, awarded after a thorough evaluation process against three other suppliers [3] Company Overview - Founded in 1982, Precision Optics specializes in advanced optical instruments for healthcare and defense/aerospace sectors, leveraging proprietary technologies in micro-optics and imaging [5] - The company provides comprehensive services from product concept to mass manufacturing, utilizing in-house design and fabrication capabilities [5] - Precision Optics has a history of supplying optical products to top-tier medical device companies, including complex endoscopes and endocouplers, and is expanding its offerings in defense/aerospace applications [5] Leadership Commentary - The CEO of Precision Optics expressed satisfaction with the awarded order, highlighting it as a validation of the company's capabilities in the defense and aerospace sectors [4] - The company’s success in securing the order is attributed to its proven track record and innovative solutions, which differentiate it in a competitive market [4]