Precision Optics (US:POCI)2023-11-10 05:00Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $4.3 million, a decrease of 15% compared to $5.1 million in Q1 2023 [38] - Production revenue decreased by $1 million to $2.4 million, while engineering revenue increased by $300,000 to $1.9 million [38] - Adjusted EBITDA was negative $245,000 for Q1 2024, compared to positive $26,000 in the same quarter last year [43] Business Line Data and Key Metrics Changes - Ross Optical operations saw a decrease in order volumes, contributing approximately $500,000 to the decline in production revenue [39] - Engineering revenue was up 16% compared to the same quarter a year ago, indicating strong demand and utilization [24] Market Data and Key Metrics Changes - The medical device market continues to show strong growth, driven by advancements in technology such as robotics and digital imaging [19] - Single-use devices are gaining market share, with growth rates of 2x to 3x that of the overall medical device market [19][32] Company Strategy and Development Direction - The company is focused on transitioning new customer programs into production while managing existing mature programs [17] - There is a strong emphasis on expanding the engineering pipeline to ensure sustainable growth in fiscal 2024 and beyond [36] - The company is optimistic about new production orders in defense/aerospace and robotic systems, which are expected to contribute significantly to revenue [22][34] Management's Comments on Operating Environment and Future Outlook - Management believes Q1 revenue levels represent the low point of the fiscal year, with expectations for recovery in Q2 and beyond [18][45] - The company is confident in the robustness of its engineering pipeline and anticipates a return to quarterly revenue levels above $5 million [45] Other Important Information - The company has implemented new tools to manage project costs and is progressing with a new ERP system expected to be completed in early 2024 [27] - A new Chief Operating Officer and CFO have been added to the team, enhancing management capabilities [26] Q&A Session Summary Question: Can you elaborate on the nuances of the Ross Optical operations this quarter? - Management explained that the decrease in orders was due to customers rebalancing inventories after previous increases driven by supply chain concerns [49][50] Question: What is the outlook for EBITDA recovery in Q2? - Management confirmed expectations for EBITDA recovery in Q2, with stable working capital needs and ongoing debt repayments [54][55]