<PAGE>
FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
Commission file number 001-10647
---------------------
PRECISION OPTICS CORPORATION, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
MASSACHUSETTS 04-2795294
- -------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22 EAST BROADWAY, GARDNER, MASSACHUSETTS 01440-3338
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(978) 630-1800
- --------------------------------------------------------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes (X) No ( )
The number of shares outstanding of issuer's common stock, par value $.01 per
share, at March 31, 1999 was 6,677,595 shares.
Transitional Small Business Disclosure Format (check one):
Yes ( ) No (X)
<PAGE>
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION:
ITEM 1 Consolidated Financial Statements
Consolidated Balance Sheets - 1
March 31, 1999
and June 30, 1998 (unaudited)
Consolidated Statements of Operations - 2
Quarter Ended March 31, 1999
and March 31, 1998 (unaudited)
Nine Months Ended March 31, 1999
and March 31, 1998 (unaudited)
Consolidated Statements of Cash Flows - 3
Nine Months Ended March 31, 1999
and March 31, 1998 (unaudited)
Notes to Consolidated Financial Statements 4-5
ITEM 2
Management's Discussion and Analysis of 6-10
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
ITEMS 1-5 Not Applicable
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27
(b) Reports on Form 8-K - None
</TABLE>
<PAGE>
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
March 31, 1999 June 30, 1998
-------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 636,514 $ 2,060,146
Accounts Receivable, Net 569,869 486,070
Inventories 1,018,779 949,993
Deferred Tax Asset -- 145,000
Prepaid Expenses 97,253 44,870
----------- -----------
Total Current Assets 2,322,415 3,686,079
----------- -----------
PROPERTY AND EQUIPMENT 3,871,395 3,471,589
Less: Accumulated Depreciation 2,569,820 2,318,380
----------- -----------
Net Property and Equipment 1,301,575 1,153,209
----------- -----------
OTHER ASSETS 282,933 288,190
----------- -----------
TOTAL ASSETS $ 3,906,923 $ 5,127,478
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 249,593 $ 124,566
Accrued Payroll 123,167 121,262
Accrued Professional Services 65,244 80,140
Accrued Profit Sharing and Bonuses 35,250 28,798
Accrued Income Taxes 3,924 4,924
Accrued Vacation 74,642 88,514
Accrued Warranty Expense 50,000 50,000
Customer Advances -- 116,841
Current Portion of Capital Lease Obligation 103,337 105,349
Other Accrued Liabilities 19,292 91,372
----------- -----------
Total Current Liabilities 724,449 811,766
----------- -----------
CAPITAL LEASE OBLIGATION 193,621 208,684
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value-
Authorized -- 10,000,000 shares
Issued and Outstanding -- 6,677,595 and
6,618,619 shares at March 31, 1999
June 30, 1998, respectively 66,776 66,186
Additional Paid-in Capital 6,201,511 6,172,349
Accumulated Deficit (3,279,434) (2,131,507)
----------- -----------
Total Stockholders' Equity 2,988,853 4,107,028
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,906,923 $ 5,127,478
----------- -----------
----------- -----------
</TABLE>
PAGE 1 OF 12
<PAGE>
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRD QUARTER AND NINE MONTHS ENDED
MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
-- THIRD QUARTER -- -- NINE MONTHS --
1999 1998 1999 1998
------ ------ ------ ------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES $ 790,846 $1,131,310 $ 2,327,831 $ 3,196,238
COST OF GOODS SOLD 472,207 983,067 1,493,793 2,694,348
---------- ---------- ----------- -----------
GROSS PROFIT 318,639 148,243 834,038 501,890
RESEARCH and DEVELOPMENT EXPENSES 297,134 243,207 792,336 668,039
SELLING, GENERAL and
ADMINISTRATIVE EXPENSES 406,921 387,120 1,196,021 1,275,695
---------- ---------- ----------- -----------
TOTAL 704,055 630,327 1,988,357 1,943,734
---------- ---------- ----------- -----------
OPERATING LOSS (385,416) (482,084) (1,154,319) (1,441,844)
GAIN ON SALE OF MARKETABLE
SECURITIES -- 102,392 -- 102,392
INTEREST EXPENSE (6,709) (7,773) (20,893) (19,029)
INTEREST INCOME 6,361 13,823 35,940 58,840
---------- ---------- ----------- -----------
LOSS BEFORE PROVISION
FOR INCOME TAXES (385,764) (373,642) (1,139,272) (1,299,641)
PROVISION FOR INCOME TAXES -- -- 8,655 --
---------- ---------- ----------- -----------
NET LOSS $ (385,764) $ (373,642) $(1,147,927) $(1,299,641)
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
BASIC AND DILUTED LOSS PER SHARE ($0.06) ($0.06) ($0.17) ($0.21)
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
COMMON SHARES OUTSTANDING 6,677,595 6,070,541 6,666,121 6,051,214
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
</TABLE>
PAGE 2 OF 12
<PAGE>
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
MARCH 31, 1999 AND MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,147,927) $(1,299,641)
Adjustments to Reconcile Net Loss to Net Cash
Used In Operating Activities -
Depreciation and Amortization 283,894 310,595
Deferred Income Taxes 8,655 --
Gain on Sale of Marketable Securities -- (102,392)
Non-Cash Royalty Expense 2,813 --
Changes in Assets and Liabilities-
Accounts Receivable (83,799) (84,189)
Inventories (68,786) 379,768
Prepaid Expenses (47,696) (61,540)
Refundable Income Taxes 136,346 52,970
Accounts Payable 125,027 (43,347)
Customer Advances (116,841) --
Accrued Expenses (93,491) (28,496)
------------ ------------
Net Cash Used In Operating Activities (1,001,805) (876,272)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds From Sale of Marketable Securities -- 122,392
Capital Expenditures (327,008) (242,129)
Increase in Other Assets (27,198) (105,984)
------------ ------------
Net Cash Used in Investing Activities (354,206) (225,721)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Capital Lease Obligation (89,873) (75,862)
Costs Associated with Private Placement of Common Stock (54,418) --
Proceeds from Exercise of Stock Options and Warrants 76,670 45,092
------------ ------------
Net Cash Used in Financing Activities (67,621) (30,770)
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,423,632) (1,132,763)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,060,146 2,348,382
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 636,514 $ 1,215,619
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash Paid for-
Interest $ 20,893 $ 19,029
------------ ------------
------------ ------------
Income Taxes $ -- $ 39,608
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING & FINANCING ACTIVITIES:
Capital Lease Obligation $ 72,798 $ 139,567
------------ ------------
------------ ------------
Common Stock Issued for Payment of Royalties $ 7,500 $ --
------------ ------------
------------ ------------
</TABLE>
PAGE 3 OF 12
<PAGE>
PRECISION OPTICS CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Precision Optics Corporation, Inc. and its
wholly-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
These financial statements have been prepared by the Company,
without audit, and reflect normal recurring adjustments which, in
the opinion of management, are necessary for a fair statement of
the results of the third quarter and first nine months of the
Company's fiscal year 1999. These financial statements do not
include all disclosures associated with annual financial
statements and, accordingly, should be read in conjunction with
footnotes contained in the Company's financial statements for the
period ended June 30, 1998 together with the auditors' report
filed under cover of the Company's 1998 Annual Report on Form
10-KSB.
(b) (LOSS) EARNINGS PER SHARE
Basic loss per share is computed by dividing net loss by the
weighted average number of shares of common stock outstanding
during the period. For the nine months ended March 31, 1999 and
1998, the effect of stock options and warrants was antidilutive;
therefore, they were not included in the computation of diluted
loss per share. The Company has adopted SFAS No. 128, EARNINGS PER
SHARE, effective December 15, 1997. As a result, the Company's
reported loss per share for the quarter and nine months ended
March 31, 1998 was restated; however, this had no effect on
previously reported loss per share data. The number of shares that
were excluded from the computation as their effect would be
antidilutive were 1,621,500 for the quarter and nine months ended
March 31, 1999 and 1,464,500 for the quarter and nine months ended
March 31, 1998.
(c) FINANCIAL INSTRUMENTS
SFAS No. 107, DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL
INSTRUMENTS, requires disclosures about the fair value of
financial instruments. Financial instruments consist principally
of cash equivalents, accounts receivable, accounts payable, and
capital lease obligations. The estimated fair value of these
financial instruments approximates their carrying value.
PAGE 4 OF 12
<PAGE>
(d) LONG-LIVED ASSETS
In accordance with the provisions of SFAS No. 121, ACCOUNTING FOR
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE
DISPOSED OF, the Company evaluates the realizability of its
long-lived assets at each reporting period based on projected
future cash flows. As of March 31, 1999 and 1998, the Company has
determined that no material adjustment to the carrying value of
its long-lived assets was required.
(e) WARRANTY COSTS
The Company does not incur future performance obligations in the
normal course of business other than providing a standard one-year
warranty on materials and workmanship to its customers. The
Company provides for estimated warranty costs at the time product
revenue is recognized.
(f) NEW ACCOUNTING STANDARD
In July 1997, The FASB issued SFAS No. 131, DISCLOSURES ABOUT
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 131
requires certain financial and supplementary information to be
disclosed on an annual and interim basis for each reportable
segment of an enterprise. SFAS No. 131 is effective for fiscal
years beginning after December 15, 1997. Unless impracticable,
companies would be required to restate prior period information
upon adoption. The Company does not believe the adoption of this
accounting pronouncement will have a significant impact on the
Company's financial statements.
2. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or
market and consist of the following:
<TABLE>
<CAPTION>
March 31, 1999 June 30, 1998
-------------- -------------
<S> <C> <C>
Raw Materials $ 667,548 $588,727
Work-In-Process 246,171 242,764
Finished Goods and Components 105,060 118,502
---------- --------
Total Inventories $1,018,779 $949,993
---------- --------
---------- --------
</TABLE>
PAGE 5 OF 12
<PAGE>
PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS
When used in this discussion, the words "believes", "anticipates",
"intends to" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected. These
risks and uncertainties, many of which are not within the Company's control,
include, but are not limited to, the uncertainty and timing of the successful
development of the Company's new products, particularly in the optical thin
films area; the risks associated with reliance on a few key customers; the
Company's ability to attract and retain personnel with the necessary scientific
and technical skills; the timing and completion of significant orders; the
timing and amount of the Company's research and development expenditures; the
timing and level of market acceptance of customers' products for which the
Company supplies components; the level of market acceptance of competitors'
products; the ability of the Company to control costs associated with
performance under fixed price contracts; and the continued availability to the
Company of essential supplies, materials and services. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof. The Company undertakes no obligation to publicly release the
result of any revision to these forward-looking statements which may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended March 31, 1999, the Company's cash and cash
equivalents decreased by approximately $1,424,000 to $637,000. The decrease in
cash and cash equivalents was due to cash used by operating activities of
approximately $1,002,000, capital expenditures of approximately $327,000,
repayment of debt of approximately $90,000, costs of approximately $54,000
associated with a private placement of common stock in fiscal year 1998, and an
increase in other assets (primarily patents) of $27,000, partially offset by
proceeds received from exercise of stock options and warrants of approximately
$76,000.
During the nine months ending March 31, 1999, the Company entered into
two five-year lease obligations for the acquisition of manufacturing equipment
totaling approximately $73,000.
PAGE 6 OF 12
<PAGE>
The Company's working capital was approximately $4,488,000, $3,939,000
and $2,874,000 at June 30, 1996, 1997 and 1998, respectively, and decreased
further to approximately $1,599,000 at March 31, 1999. This trend is primarily
the result of losses being generated beginning in fiscal 1997, due primarily to
a reduction in night vision products revenues occurring over the last
thirty-three months ending March 1999 and significant investments in internal
research and development and capital expenditures in order to transition the
Company into more profitable business areas such as medical products and optical
thin films.
The Company intends to continue devoting significant resources to
internally-funded research and development spending on both new products and the
improvement of existing products. The Company also intends to devote resources
to the marketing and product support of its medical and optical thin films
product lines, and the development of new methods of distribution. These
investments may temporarily result in negative cash flow, but the Company
anticipates that the results of these efforts will translate into increased
revenues and profits.
Furthermore, depending upon the market acceptance of the Company's
products, the Company believes that it may need to acquire new facilities, add
additional manufacturing or research and development equipment, or acquire a
business that has complementary products or manufactures or sells to the Company
components, materials, supplies, or services used in the manufacture, marketing,
distribution, or servicing of the Company's products.
The Company continues to maintain a secured line of credit of $500,000
available with a bank at 1/4% over the prime rate. Under the terms of the line
of credit, the Company is required to maintain certain ratios under specified
financial covenants (Debt Service Coverage, Leverage, Current Ratio), and must
maintain a minimum cash liquidity of $1,000,000. The Company was not in
compliance with all such covenants as of March 31, 1999. There can be no
assurance that the Company will be able to achieve and/or maintain compliance
with all of such terms. As of March 31, 1999, there were no borrowings
outstanding under the line of credit.
The Company currently has no material unused sources of liquidity other
than its cash and cash equivalents and accounts receivable. If these liquidity
sources, along with revenues from operations, are not sufficient to fund
operations or growth, the Company will require additional financing. The timing
and amount of additional financing requirements depend on a number of factors,
including the status of development and commercialization efforts, the cost of
equipment and personnel to support manufacturing of new and existing products,
and the amount of working capital necessary to start up and maintain operations
supporting new products. The Company may seek additional funds through public or
private equity or debt financing. There can be no assurance that such funds will
be available on satisfactory terms, if at all. Lack of necessary funds may
require the Company to delay, scale back or eliminate some or all of its
development efforts and undertake other cost reduction measures.
PAGE 7 OF 12
<PAGE>
RESULTS OF OPERATIONS
Total revenues for the third quarter and nine months ended March 31,
1999 decreased by $340,464 or 30.1% and $868,407 or 27.2%, respectively, from
the same periods in the prior year.
The revenue decrease from the prior year for the third quarter was due
to lower sales of non-medical products (down 72%), and lower sales of medical
products (down 11%).
Similarly, the revenue decrease from the prior year for the nine months
ended March 31, 1999 was due to lower sales of non-medical products (down 74%),
and lower sales of medical products (down 5%).
The reduction in non-medical sales was primarily due to lower sales of
night vision products due to successful completion during the prior fiscal year
of several government contracts. The decrease in sales of medical products was
due primarily to lower sales of non-stereo endoscopes and endocouplers in the
third quarter and nine months ended March 31, 1999, partially offset by initial
shipments of stereo endoscopes and cameras beginning in the second quarter of
fiscal 1999.
Included in total revenues are sales for customer-funded research and
development projects totaling approximately $13,000 and $208,000 for the quarter
ending March 31, 1999 and 1998, respectively, and approximately $217,000 and
$416,000 for the nine months ended March 31, 1999 and 1998, respectively. Levels
of customer-funded research and development can fluctuate greatly in any given
period depending upon the level of customer demand during such period.
Revenues from the Company's two largest customers were approximately
43% and 10% of total revenues for the nine months ended March 31, 1999, and
revenues from the Company's four largest customers were approximately 23%, 10%,
10% and 10% of total revenues for the nine months ended March 31, 1998. No other
customers accounted for more than 10% of the Company's revenues during those
periods.
For the nine months ended March 31, 1999, approximately 2% of the
Company's total revenues were derived from production and development contracts
and subcontracts involving the United States government compared to
approximately 27% for the corresponding period of the prior year. The Company's
current government business is substantially complete and there can be no
assurance that the government will award future contracts or subcontracts to the
Company.
Gross profit expressed as a percentage of revenues increased from 13.1%
to 40.3% for the quarter, and from 15.7% to 35.8% for the nine months ended
March 31, 1999, compared to the corresponding periods in the prior year. The
increase in the gross profit percentage was due primarily to shipments with a
significantly more favorable product mix in the current periods which resulted
in proportionately lower manufacturing costs.
PAGE 8 OF 12
<PAGE>
Research and development expenses increased by $53,927 or 22.2% for the
quarter ending March 31, 1999, and by $124,297 or 18.6% for the nine months
ended March 31, 1999. During both years, internal research and development
expenses consisted primarily of development efforts related to Wavelength
Division Multiplexer (WDM) optical filters used in telecommunication systems,
which are discussed further below.
Selling, general and administrative expenses increased for the third
quarter by $19,801 or 5.1% and decreased for the nine months ended March 31,
1999 by $79,674 or 6.2% compared to the corresponding periods of the prior year.
The increase for the quarter was due primarily to higher professional services
expenses. The decrease for the nine months ended March 31, 1999 was due
primarily to lower sales and marketing expenses.
During the quarter ending March 31, 1998, the Company sold marketable
securities and realized a gain of $102,392. No such sales were made in the
quarter ending March 31, 1999.
Interest income decreased by $7,462 for the third quarter and by
$22,900 for the nine months ended March 31, 1999 due to the lower investment
base of cash.
No income tax provision was recorded in fiscal year 1998 because of the
loss. The income tax provision of $8,655 in the current year is attributable to
the amount of refundable taxes that could not be carried back to offset prior
years' income taxes.
YEAR 2000 READINESS
Based on a recent preliminary assessment, the Company has determined
that it is required to modify portions of its hardware and software so that its
computer systems and other date-sensitive equipment will properly utilize data
beyond December 31, 1999. The Company believes that with upgrades or
modifications to existing software and hardware, the impact of Year 2000 issues
can be mitigated. However, if such upgrades or modifications are not made, or
are not made in a timely manner, Year 2000 issues could have a material adverse
impact on the Company's operations and financial condition. The Company will
utilize primarily external resources to test and/or replace hardware and
software for Year 2000 compliance. The estimated completion date of the Year
2000 project is June 30, 1999, and the Company believes the costs of the project
will not be material to the Company's operating results or financial condition.
As the Company's ongoing assessment of its Year 2000 compliance status
progresses, the Company will establish such contingency plans as it deems
necessary to address any residual Year 2000 risks. The Company currently is not
aware of any material risks to its business and operations presented by the Year
2000 compliance status of its customers, suppliers and service providers.
PAGE 9 OF 12
<PAGE>
TRENDS AND UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS
The Company continues to aggressively pursue sales, marketing, and
technology development efforts for new optical thin films in the rapidly growing
telecommunications industry. The success of these products depends upon a number
of factors, including the Company's timely completion of development efforts,
ability to meet a set of rigorous customer specifications, and ability to
reliably manufacture such products in sufficient quantity at acceptable yields
to meet anticipated demand. The Company is currently supporting product
evaluation tests with several potential customers. While the Company believes
that these efforts should lead to significant future thin film sales, it remains
uncertain exactly when the Company's manufacturing processes for such products
will satisfy all customer requirements. The emphasis of the Company's
development efforts during the last several quarters has been on addressing
specific product requirements for various environmental properties (such as the
ability to withstand temperature and humidity changes), certain production
specifics (including cutting and packaging), and the quality control procedures
and measurement processes necessary to meet customer requirements in large scale
production. Close customer interaction is continuing regarding all of these
issues.
In March 1999, the Company announced that it had received orders
totaling over $1.9 million from several customers for 100GHz and 200GHz channel
separation Dense Wavelength Division Multiplexer (DWDM) optical filters used in
telecommunications systems. First deliveries on these contracts, which were not
material, were made in March 1999 and are scheduled through March 2000. Future
deliveries on the remainder of these new orders are contingent upon the
Company's satisfying all customer requirements.
During the quarter ending December 31, 1998, the Company commenced
deliveries of stereo endoscopes and cameras to a customer who has developed a
computer-enhanced surgery system. Revenues from this customer were approximately
43% of total revenues for the nine months ended March 31, 1999. Future
deliveries under this initial hardware order are scheduled through April 1999.
In April 1999, the Company received a follow-on order from this customer of
approximately $550,000, with deliveries beginning in July 1999. The Company
anticipates additional follow-on orders from this customer, but the magnitude of
such future business depends upon a number of factors, such as the customer's
own success in marketing its computer-enhanced surgery system and the customer's
continued acceptance of the Company's price, performance and product reliability
parameters.
PAGE 10 OF 12
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1-5 Not Applicable.
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - There were no reports on
Form 8-K filed during the period covered by this
report.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRECISION OPTICS CORPORATION, INC.
DATE: May 5, 1999 BY: /s/ Jack P. Dreimiller
-------------------------------------
Jack P. Dreimiller
Senior Vice President, Finance,
Chief Financial Officer and Clerk
PAGE 11 OF 12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
27 Financial Data Schedule
</TABLE>
PAGE 12 OF 12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 636,514
<SECURITIES> 0
<RECEIVABLES> 569,869
<ALLOWANCES> 0
<INVENTORY> 1,018,779
<CURRENT-ASSETS> 2,322,415
<PP&E> 3,871,395
<DEPRECIATION> 2,569,820
<TOTAL-ASSETS> 3,906,923
<CURRENT-LIABILITIES> 724,449
<BONDS> 193,621
0
0
<COMMON> 66,776
<OTHER-SE> 2,922,077
<TOTAL-LIABILITY-AND-EQUITY> 3,906,923
<SALES> 2,327,831
<TOTAL-REVENUES> 2,327,831
<CGS> 1,493,793
<TOTAL-COSTS> 1,493,793
<OTHER-EXPENSES> 1,988,357
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,893
<INCOME-PRETAX> (1,139,272)
<INCOME-TAX> 8,655
<INCOME-CONTINUING> (1,147,927)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,147,927)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
