 |
21 Feb 2024
US firm sees fast-growing opportunities emerging in drones, laser weapons, and satellite communications.
Precision Optics Corporation (POC), the developer of high-specification micro-optics largely used in endoscopy applications, has outlined plans to expand its efforts in the defense and aerospace sector.
The Massachusetts company, which listed on the Nasdaq in late 2022, sees growing opportunities in three specific application areas.
In an investor conference call detailing the firm’s latest financial results, CEO Joe Forkey said:
“We have already identified three segments that require micro-optics and/or high-precision alignment, some of which are represented by our current production programs.
“They are unmanned aerial vehicles or drones; directed energy weapons or laser weapons; and satellite communications, especially among satellite constellations.
“Each of these segments is expanding at double-digit annual growth rates, making them ideal targets for future POC sales and marketing efforts.”
Those efforts come as POC also works to bring a number of endoscope-related engineering programs to volume production over the next few months - including a single-use cystoscope that would typically be used to investigate the urinary tract and bladder.
Production shift
Reporting quarterly sales revenues of $4.8 million for the December quarter - down nearly 20 per cent on the same period a year earlier - Forkey highlighted that the company’s engineering revenue had jumped 33 per cent, indicating that stronger sales growth from a ramp in production should be in the pipeline.
“We have begun to see the rebound we expected with two new programs moving to production in the quarter and another restarting after a pandemic-related hold,” he said.
“The growth we expect in the second half of fiscal 2024 [which ends in June] is supported by the strength of our engineering pipeline, a leading indicator of future production volumes.”
The anticipated ramp in demand also means that POC may need to expand its manufacturing footprint, and the CEO told the investor call:
“With a large number of programs anticipated to move to production in the next few quarters, we have begun to critically evaluate our manufacturing infrastructure.
“We are considering various approaches to satisfy our requirements for manufacturing space, including a search for a potential new facility that will allow us to further expand and optimize manufacturing capacity to support both our near-term and longer-term growth objectives.
“Our technological capabilities are highly sought after. We are one of only a few companies in the world that can deliver the type of micro-optics and digital imaging that are supporting the next generation of medical devices.”
Core competencies
Despite that future potential, the lower sales in the December quarter hit POC’s profit margins, with the company posting an operating loss of $0.7 million for the period.
According to its latest balance sheet, the firm held just under $1 million in cash and equivalent liquid assets as of December 31 - down from close to $3 million six months earlier.
However, the latest quarterly sales figure did represent an increase of 12 per cent on the September 2023 total, and POC’s executive team is expecting a similar increase in the current quarter, along with better profitability.
“We anticipate volumes from production orders coming online to lift our overall revenue to new quarterly record run-rates in this fiscal year,” said Forkey.
“Precision Optics' core competencies – micro-optics, digital imaging, 3D endoscopy, and single-use medical devices – uniquely position us at the center of market segments that are significantly outpacing the growth of the broader medical device and defense/aerospace industries.
“I look forward to an exciting second half of fiscal 2024.”
 |  |  |  |  |  |  |
| © 2024 SPIE Europe |
|
