Precision Optics (US:POCI)2020-11-14 07:24Financial Data and Key Metrics Changes - The company reported revenue of $2.8 million for Q1 fiscal 2021, representing a 23% sequential increase and a 10% year-over-year increase [27] - Gross margin improved to 35% from 29% in the previous quarter, although it decreased from 39% in the same quarter a year ago [30] - The company achieved a slight net profit with adjusted EBITDA exceeding $100,000, compared to a loss of $208,000 in the previous quarter [32] Business Line Data and Key Metrics Changes - Production revenue was $2.2 million in Q1 fiscal 2021, up 12% sequentially and 3% year-over-year, primarily driven by the otoscopy product [28] - Engineering Services revenue reached $589,000, a 102% increase from the previous quarter and a 44% increase year-over-year, indicating higher demand for engineering services [29] Market Data and Key Metrics Changes - The company noted a recovery in business activity compared to the early part of the year when inquiries had significantly decreased due to COVID-19 [20] - The market for small CMOS-based endoscopes is expanding rapidly, with increased demand for custom lenses and new endoscope designs [21][22] Company Strategy and Development Direction - The company is focusing on vertical integration of capabilities to enhance customization and meet customer needs, which is seen as a key differentiator in the industry [26] - There is an ongoing effort to expand sales and marketing in the defense and aerospace market, leveraging existing relationships and product offerings [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from COVID-19 impacts, noting that customers believe they will work through excess inventory and return to pre-pandemic levels [42] - The company anticipates that commercialized programs will rebound, and new projects in the pipeline will contribute to growth in the coming quarters [44] Other Important Information - The company has approximately $900,000 in cash and an improved net working capital position, positioning it well for future operations [11][33] - The company continues to manage operating expenses carefully, with a reported $974,000 in operating expenses for the quarter, down from $1.1 million year-over-year [31] Q&A Session Summary Question: Can you summarize the current and anticipated impacts of COVID-19 on the business? - Management indicated that while the acute impacts of COVID-19 have lessened, there are still long-term effects as customers work through excess inventory, but they remain optimistic about future growth [41][43]