Precision Optics (US:POCI)2022-02-15 02:07Financial Data and Key Metrics Changes - Overall revenue for Q2 was $3.9 million, up 40% year-over-year and 67% quarter-over-quarter [15][42] - Production revenue was $2.3 million, while engineering revenue was $1.6 million, marking the highest production revenue in the last five quarters [42] - Gross margin was 29% for Q2 compared to 27% in the previous quarter and 31% a year ago [42] - The company reported a GAAP net loss of $507,000 during Q2 with an adjusted EBITDA loss of $73,000 [45] Business Line Data and Key Metrics Changes - Organic growth was up 16% sequentially, with approximately $1.2 million recognized from the newly acquired Lighthouse Imaging division [15] - Overall production revenue increased by 22% quarter-over-quarter and 17% year-over-year, excluding Lighthouse contributions, production revenue was up 4% and 9% respectively [30] - Engineering revenue levels were up 93% year-over-year and 233% quarter-over-quarter, reflecting a strong pipeline of new opportunities [32] Market Data and Key Metrics Changes - The company received a $1.5 million production order from a major defense aerospace customer, expected to lead to a $3 million annual run rate [19][58] - The FDA granted 510(k) clearance for a five-camera colonoscope, with production orders anticipated shortly [21][55] Company Strategy and Development Direction - The company plans to uplist to the NASDAQ Capital Market, which is expected to improve liquidity and broaden the investor base [10][11] - Integration of Lighthouse Imaging is progressing well, with combined capabilities expected to enhance project opportunities in medical devices and defense aerospace [25][29] - The strategic plan includes growing sales capacity, investing in technical resources, updating production capabilities, and pursuing external partnerships or acquisitions [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for significant growth in the second half of fiscal 2022, driven by new contracts and recovering production levels [23][49] - The company is confident in its ability to navigate labor shortages and production capacity challenges, having successfully recruited new talent [63][65] Other Important Information - The company filed a preliminary proxy for its annual meeting scheduled for April 8, which includes a motion for a potential reverse stock split to meet NASDAQ listing requirements [12][13] - The company will participate in the Lytham Spring 2022 Investor Conference from April 4 to 7 [50] Q&A Session Summary Question: Follow-up on single-use projects - Management confirmed two projects moving forward, one from POC and one from Lighthouse, with additional single-use projects in discussion [54] Question: Anticipated production order from FDA-approved product - Management expects to receive a production order shortly after discussing detailed requirements with the customer [55] Question: Concerns regarding labor shortages and production capacity - Management acknowledged concerns but reported successful recruitment efforts despite a tight labor market [63][64] Question: Status of uplisting to NASDAQ - Management indicated no significant roadblocks to uplisting, with ongoing communication with NASDAQ and completion of necessary requirements [67]