Precision Optics (US:POCI)2022-05-17 01:41Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $4.7 million, an increase of 89% year-over-year, and organic revenue was up 37% year-over-year excluding the Lighthouse acquisition [11][44] - Consolidated gross margins were 37%, the highest since September 2019, with historical business gross margins over 40% excluding Lighthouse [12][45] - Adjusted EBITDA was positive at $218,000, marking a new record for the company [13][53] Business Line Data and Key Metrics Changes - Production revenue was $3.1 million, up 38% from the previous quarter and $1.2 million higher than the same quarter last year [16][44] - Engineering revenue was $1.5 million, compared to $550,000 in Q3 of the previous year [35][44] - Lighthouse contributed approximately $250,000 to production revenue, with organic production revenue increasing by 50% year-over-year [17][44] Market Data and Key Metrics Changes - The company reported a significant rebound in orders for spinal surgery products, totaling approximately $2.5 million from a major customer [22] - A new defense aerospace production contract contributed to Q3 production revenue, with initial deliveries of about $100,000 [18] - The company expects ongoing orders from the defense aerospace sector to reach a run rate of approximately $3 million per year [19] Company Strategy and Development Direction - The company aims to uplift its stock onto the NASDAQ Capital Market Exchange and has received shareholder approval for a reverse split if needed [14] - The strategic plan includes growing sales capabilities, investing in technical resources, and updating production capabilities [56][58] - The acquisition of Lighthouse is seen as a significant event that enhances the company's capabilities in both medical optics and digital imaging [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing revenue growth, driven by strong demand in both medical device and defense aerospace markets [43][60] - The company is actively recruiting additional engineers to increase the size of the engineering pipeline and improve project execution speed [36] - Management acknowledged supply chain challenges but emphasized proactive measures to mitigate risks [70][75] Other Important Information - The cash balance as of March 31, 2022, was $832,000, with accounts receivable increasing due to higher revenue [55] - Operating expenses for the quarter were $1.8 million, reflecting investments in sales and marketing initiatives [51][52] Q&A Session Summary Question: What is the company's capacity to meet growing demands? - Management indicated that there is still room for growth in manufacturing capacity and is actively hiring new personnel [65][66] Question: Are there any supply chain issues impacting production? - Management confirmed supply chain concerns, particularly with electronic components and glass supply, but noted effective management strategies are in place [71][74] Question: Is there an increased focus on aerospace and defense projects? - Management acknowledged a growing interest in aerospace and defense opportunities, particularly following the Lighthouse acquisition, which enhances capabilities in this sector [76][78]