Precision Optics Corporation Inc (POCI) 2025 Q3 法說會逐字稿

Welcome to the Precision first quarter 2025 shareholder update conference call. (Operator Instructions) Please note that the conference is being recorded. Statements made during this call contain forward-looking statements about our business. You should not place undue reliance on forward-looking statements as based upon our current expectations, forecasts, and assumptions.

歡迎參加 Precision 2025 年第一季股東更新電話會議。（操作員指示）請注意，會議正在錄音。本次電話會議所作的聲明包含有關我們業務的前瞻性陳述。您不應過度依賴基於我們當前預期、預測和假設的前瞻性陳述。

Please note this event is being recorded. I would now like to turn the conference over to Mr. Robert Blum with Lytham Partners. Please go ahead, sir.

請注意，此事件正在被記錄。現在我想將會議交給 Lytham Partners 的 Robert Blum 先生。先生，請繼續。

Thank you, operator, and to everyone joining the call today. As the operator mentioned, on today's call, we will discuss Precision Optics' third quarter fiscal year 2025 financial results, and this is for the period ended March 31, 2025. With us on the call representing the company today are Dr. Joe Forkey, Precision Optics' Chief Executive Officer; and Wayne Coll, the company's Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question-and-answer session.

謝謝接線員以及今天參加電話會議的所有人。正如接線員所提到的，在今天的電話會議上，我們將討論 Precision Optics 2025 財年第三季的財務業績，這是截至 2025 年 3 月 31 日的財務業績。今天代表公司參加電話會議的有 Precision Optics 執行長 Joe Forkey 博士和公司財務長 Wayne Coll。在今天的準備好的演講結束後，我們將開始問答環節。

(Operator Instructions). Before we begin with prepared remarks, we submit for the record the following statement. Statements made by the management team of Precision Optics during the course of this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

（操作員指令）。在我們開始準備好的發言之前，我們先提交以下聲明以供記錄。Precision Optics 管理團隊在本次電話會議中所作的陳述可能包含經修訂的 1933 年證券法第 27A 節和經修訂的 1934 年證券交易法第 21E 節所定義義的前瞻性陳述，並且此類前瞻性陳述是根據 1995 年私人證券訴訟改革法的安全港條款作出的。

Forward-looking statements describe future expectations, plans, results, or strategies and are generally preceded by words such as may, future, plan or planned, will or should, expected, anticipates, draft, eventually, or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors and other risks identified in the company's filings with the Securities and Exchange Commission.

前瞻性陳述描述了未來的預期、計劃、結果或策略，通常以“可能”、“未來”、“計劃”或“計劃中”、“將要”或“應該”、“預期”、“預期”、“草案”、“最終”或“預期”等詞語開頭。請聽眾注意，此類聲明受到多種風險和不確定性的影響，可能導致未來的情況、事件或結果與前瞻性聲明中預測的結果存在重大差異，包括由於公司向美國證券交易委員會提交的文件中確定的各種因素和其他風險，實際結果可能與前瞻性聲明中預測的結果存在重大差異。

All forward-looking statements contained during this conference call speak only as of the date on which they are made and are based on management's assumptions and estimates as of such date. The company does not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events, or otherwise. With that said, let me turn the call over to Dr. Joe Forkey, Chief Executive Officer, Precision Optics. Joe, please proceed.

本次電話會議中包含的所有前瞻性陳述僅代表陳述作出之日的觀點，並基於管理層截至該日的假設和估計。本公司不承擔公開更新任何前瞻性聲明的義務，無論是由於收到新資訊、發生未來事件或其他原因。話雖如此，請允許我將電話轉給 Precision Optics 執行長 Joe Forkey 博士。喬，請繼續。

Thank you, Robert, and thank you all for joining our call today. Let's start right at the top with the challenges we encountered during the quarter in some of our production programs that led to significantly lower revenue and margins than we expected.

謝謝你，羅伯特，也謝謝大家今天參加我們的電話會議。讓我們先談談本季我們在某些​​生產項目中遇到的挑戰，這些挑戰導致收入和利潤率遠低於我們的預期。

Having rolled out a number of programs from product development into rapidly ramping production over the last 12 months, we sometimes discover process fixture or personnel limitations that can result in low yields, delivery delays, and reduced efficiency. These types of issues resulted in lower shipments than planned this quarter, underutilization of resources, greater scrap, and substantial negative adjusted EBITDA. There were also the indirect impacts of management's time and attention, and direction of engineering resources to support the production line in addressing these issues.

在過去的 12 個月中，我們推出了一系列項目，從產品開發到快速提高產量，有時我們會發現製程裝置或人員的限制會導致產量低、交貨延遲和效率降低。這些問題導致本季出貨量低於計畫、資源利用不足、廢品率增加以及調整後 EBITDA 大幅為負。管理階層的時間和注意力以及工程資源的方向也產生了間接影響，以支持生產線解決這些問題。

While we are disappointed by these results for the quarter, our confidence and excitement for the future remain undiminished. We have made significant progress on resolving the third quarter issues, and we have the largest production backlog in over 20 years. With a positive response to the launch of our Unity platform in Q3, we believe the underlying fundamentals of our strategy for business growth remains strong, and we look forward to recovering that growth in Q4 and beyond.

儘管我們對本季的業績感到失望，但我們對未來的信心和興奮絲毫未減。我們在解決第三季問題上取得了重大進展，並且我們的生產積壓訂單量達到了 20 多年來的最高水準。由於我們在第三季推出的 Unity 平台獲得了積極的反響，我們相信我們的業務成長策略的基本面依然強勁，我們期待在第四季度及以後恢復成長。

Today, I'll focus my remarks on the following items: First, the operational challenges we faced in Q3; second, how we resolved these challenges; third, the exciting sales pipeline we see as we look forward; fourth, the Unity program rollout; and finally, our 2 new Board members. One of the major programs driving our production growth is the single-use cystoscope.

今天，我將重點介紹以下幾點：首先，我們在第三季度面臨的營運挑戰；其次，我們如何解決這些挑戰；第三，我們期待的令人興奮的銷售管道；第四，Unity 計劃的推出；最後，我們的兩位新董事會成員。推動我們生產成長的主要項目之一是一次性膀胱鏡。

In mid-January, daily yields on this product line dropped precipitously to less than 50%. This is well below our historical and expected yields of around 90%. As a result, we stopped manufacturing while we performed a root cause investigation. By mid-February, we had identified the source of the low yields, made corrections, and restarted production. The restart was successful, but the ramp back to previous unit production levels took longer than we anticipated, mainly due to challenges we experienced in recruiting, retaining, and training adequate numbers of assembly technicians, particularly for a second shift.

1月中旬，該產品線的日收益率急劇下降至少於50%。這遠低於我們約 90% 的歷史和預期收益率。因此，我們停止了生產，並進行了根本原因調查。到了 2 月中旬，我們找到產量低的原因，進行了修正，並重新開始生產。重啟是成功的，但恢復到以前的單位生產水平所花的時間比我們預期的要長，主要是因為我們在招募、留住和培訓足夠數量的裝配技術人員方面遇到了挑戰，特別是對於第二班次的裝配技術人員。

While POC has manufactured products for many years, the particular requirements associated with running higher volume lines with multiple shifts led to some challenges that we had to overcome. The good news is that we have made significant progress, both in improving production yield and in staffing both the first and second shifts. And while we continue to improve in both of these areas, the endoscope line throughput is currently double what it was before the shutdown, and we expect this line to contribute significantly more revenue in Q4 than it did in Q3.

儘管 POC 已生產產品多年，但運行多班次大批量生產線的特殊要求給我們帶來了一些必須克服的挑戰。好消息是，我們在提高生產產量以及第一班和第二班的人員配備方面都取得了重大進展。雖然我們在這兩個領域都在不斷改進，但目前內視鏡生產線的吞吐量是停產前的兩倍，我們預計該生產線在第四季度的收入貢獻將比第三季度大幅增加。

Moreover, the customer for this product was supportive of the yield analysis we performed and solutions we implemented and has now asked us to expand our output further by adding a second production line, which we expect to begin producing product in the first half of fiscal 2026. The result of production challenges like this and the distraction of engineering resources away from product development work to resolve these issues resulted in a shortfall of approximately $600,000 in Q3.

此外，該產品的客戶支援我們進行的產量分析和實施的解決方案，現在要求我們透過增加第二條生產線來進一步擴大產量，我們預計該生產線將於 2026 財年上半年開始生產產品。此類生產挑戰以及解決這些問題所需的工程資源從產品開發工作中轉移，導致第三季資金短缺約 60 萬美元。

Separately and incrementally, about $300,000 of product development revenue was pushed out of Q3 due to a customer-imposed delay in one program and a single delayed milestone, which will be delivered in Q4 in one other project. Despite these issues, overall systems production revenue, which includes products launched in the last year as well as some legacy products, continued its upward growth, increasing over 20% quarter-over-quarter and more than doubling year-over-year.

另外，由於客戶在一個專案中強行推遲以及一個里程碑的延遲，約有 30 萬美元的產品開發收入被推遲到第三季度，而另一個專案將在第四季度交付。儘管存在這些問題，包括去年推出的產品以及一些傳統產品在內的整體系統生產收入仍然保持增長，環比增長超過 20%，同比增長超過一倍。

We had expected greater growth in the quarter, but our confidence and excitement for the future remain undiminished, and the demand remains unchanged. We have made significant progress resolving third-quarter issues, and we have a large production backlog dominated by products for customers who will take delivery as fast as we can build. The underlying fundamentals of our strategy are robust, and we look forward to posting solid revenue growth in Q4 and beyond.

我們原本預期本季會有更大的成長，但我們對未來的信心和興奮依然沒有減弱，需求也沒有改變。我們在解決第三季的問題上取得了重大進展，我們有大量的生產積壓產品，主要為客戶生產，客戶會盡快收到我們的產品。我們的策略基本面強勁，我們期待在第四季及以後實現穩健的營收成長。

Production levels from our aerospace program, in particular, have continued to ramp as anticipated from approximately $300,000 in Q1 to $600,000 in Q2 to just under $900,000 in Q3. Near the end of Q3, we doubled the line capacity by expanding our ISO Class 7 clean room and building additional tools and fixtures. We expect production for this program to set another new record in the fourth quarter as we strive to double output quarter-over-quarter.

特別是我們的航空航太專案的生產水準如預期一樣持續提升，從第一季的約 30 萬美元上升至第二季的 60 萬美元，再到第三季的略低於 90 萬美元。在第三季末，我們透過擴大 ISO 7 級無塵室並建造額外的工具和裝置，使生產線產能翻了一番。我們力爭使產量較上季翻一番，預計該專案的產量將在第四季創下新紀錄。

In April, after many months of negotiation, we finalized the main purchase agreement, which will govern our ongoing manufacturing work with this customer. The agreement highlights the commitment between the companies to expand production of this product that leverages POC's proprietary manufacturing technology.

今年四月，經過數月的談判，我們最終敲定了主要採購協議，該協議將指導我們與該客戶正在進行的製造工作。該協議強調了兩家公司利用 POC 專有製造技術擴大該產品生產的承諾。

Under the terms of the new agreement, the customer has agreed to minimum annual purchase commitments of nearly $4 million for 2025 and 2026. This commitment, along with the backlog greater than $6 million today, provides us with a level of predictability and visibility to our growing production schedule, which will help us better forecast and execute production revenue.

根據新協議的條款，客戶同意在 2025 年和 2026 年每年至少購買近 400 萬美元。這項承諾，加上目前超過 600 萬美元的積壓訂單，為我們不斷增長的生產計劃提供了一定程度的可預測性和可見性，這將有助於我們更好地預測和執行生產收入。

In Q3, we also started production of 2 additional programs transitioning from product development. One is our second single-use program to go into production, a micro endoscope used for an ophthalmic procedure, and the second is a complex subassembly used for retinal imaging. Each of these programs is now running at a $100,000 to $200,000 per quarter level.

在第三季度，我們也開始生產另外 2 個從產品開發過渡的專案。一個是我們投入生產的第二個一次性項目，用於眼科手術的微型內視鏡，第二個是用於視網膜成像的複雜子組件。目前，每個專案每季的營運成本都在 10 萬至 20 萬美元之間。

Finally, there are still many product development programs that continue to move forward, which meet our standard benchmarks for production revenue potential. In particular, a couple of programs that were delayed due to work our customers needed to do before continuing their work for us have now started to move forward again. A good example of this is a program that uses a very small single-use endoscope for a specialty arthroscopic procedure that has been on hold for over a year as our customer evaluated updates and market conditions before deciding to move forward.

最後，仍有許多產品開發項目持續推進，符合我們的生產收入潛力標準基準。特別是，由於我們的客戶在繼續為我們工作之前需要完成一些工作而被推遲的幾個項目現在已經開始再次向前推進。一個很好的例子是，一個使用非常小的一次性內視鏡進行專業關節鏡手術的專案已經被擱置了一年多，因為我們的客戶在決定繼續推進之前評估了更新和市場條件。

Earlier this month, we received a purchase order to complete product validation, and we now expect this project to move to production near the end of calendar 2025. The single-use ophthalmic endoscope that started production in the third quarter and the single-use arthroscope that just restarted in our product development pipeline, along with our single-use cystoscope already in production, all represent good examples of the way POC's unique capabilities in micro-optics and CMOS-based digital imaging are enabling next-generation endoscopic systems that support the fast-growing single-use endoscope market.

本月初，我們收到了一份完成產品驗證的採購訂單，現在我們預計該項目將在 2025 年底投入生產。第三季開始生產的一次性眼科內視鏡和剛在我們的產品開發流程中重新啟動的一次性關節鏡，以及我們已經投入生產的一次性膀胱鏡，都是POC在微光學和基於CMOS的數位成像方面的獨特能力如何支持快速增長的一次性內視鏡市場的下一代內視鏡系統的良好例子。

As we've discussed on recent calls, this segment of the endoscope market is growing at annual rates estimated to be as high as 20% and is being driven by the lower cost and superior performance of these scopes. The lower cost comes from the use of photolithography computer chip technology to fabricate CMOS sensors, combined with the positioning of the CMOS sensor at the distal tip of an endoscope. This eliminates the high-cost elements in more traditional endoscopes required to carry the image from the distal to proximal end of the endoscope. Along with lower cost, the CMOS-based scopes generally have better image quality than those based on older imaging technologies. With single-use endoscopes, surgeons always get brand-new scope image quality.

正如我們在最近的電話會議中討論的那樣，內視鏡市場的這一部分正以每年高達 20% 的速度增長，而這得益於這些內視鏡的低成本和卓越性能。較低的成本來自於使用光刻電腦晶片技術製造 CMOS 感測器，並將 CMOS 感測器定位在內視鏡的遠端。這消除了傳統內視鏡中將影像從內視鏡遠端傳送到近端所需的高成本元件。除了成本較低之外，基於 CMOS 的示波器通常比基於舊成像技術的示波器具有更好的影像品質。使用一次性內視鏡，外科醫生總是可以獲得全新的內視鏡影像品質。

Hospitals don't need to track scopes through reprocessing procedures, and perhaps most importantly, the possibility of cross-contamination from one patient to another is eliminated. Now that CMOS sensors have been available for medical devices for a number of years and with early adopters demonstrating that single-use endoscopes are technically, clinically, and economically viable, the entire endoscope market is moving in this direction.

醫院不需要透過再處理程序來追蹤內視鏡，也許最重要的是，消除了從一個病人到另一個病人的交叉污染的可能性。現在，CMOS 感測器已在醫療設備上應用多年，並且早期採用者證明一次性內視鏡在技術、臨床和經濟上都是可行的，整個內視鏡市場正在朝著這個方向發展。

With POC's long-term strategic focus on developing technology infrastructure and partnerships, particularly with OmniVision, a market leader in producing CMOS sensors, we are well-positioned to become the supplier of choice for digital endoscopes and more specifically, for single-use endoscopes. Our Unity platform, which we launched in late January, further aligns our offerings to this target market. As we discussed at length in our last call, the Unity platform is designed to utilize standard baseline designs with a library of modular subsystems that can be quickly updated and customized to satisfy specific customer product requirements.

POC 長期致力於發展技術基礎設施和合作夥伴關係，特別是與 CMOS 感測器生產市場領導者 OmniVision 的合作，這使我們完全有能力成為數位內視鏡（更具體地說是一次性內視鏡）的首選供應商。我們於一月底推出的 Unity 平台進一步讓我們的產品更貼近這個目標市場。正如我們在上次電話會議中詳細討論的那樣，Unity 平台旨在利用標準基線設計和模組化子系統庫，可快速更新和客製化以滿足特定客戶的產品要求。

At a high level, Unity is expected to revolutionize the way new endoscopic systems are developed by combining the best technology with the best design process. This approach reduces risk, cost, and most importantly, time to market. The response to the launch of Unity at shows in late January and early February, along with the demonstration exhibit and session presentation at the Device Talk Show in May, has been very positive. We have seen a steady increase in website traffic flow, with April levels more than 15% greater than January. And today, we are in active discussions with 5 potential customers motivated by their interest in Unity.

從高層次來看，Unity 預計將透過將最佳技術與最佳設計流程相結合來徹底改變新型內視鏡系統的開發方式。這種方法降低了風險、成本，最重要的是縮短了上市時間。Unity 在 1 月底和 2 月初的展會上的發布以及 5 月在 Device Talk Show 上的演示展覽和會議演示都獲得了非常積極的反響。我們看到網站流量穩定成長，四月的流量比一月高出 15% 以上。今天，我們正在與 5 位對 Unity 感興趣的潛在客戶進行積極討論。

This response bolsters our confidence that Unity will help us bring new programs into our development pipeline in the near term. Before I turn the call over to Wayne, I want to make a couple of comments on the recent changes to our Board. I want to start by thanking and acknowledging Dr. Richard Miles for his dedication to POC. Rick retired from the Board in March after serving as a director for nearly 20 years.

這項回應增強了我們的信心，我們相信 Unity 將在短期內幫助我們將新程式納入我們的開發流程。在我將電話轉給韋恩之前，我想就我們董事會最近的變動發表幾點評論。首先，我要感謝並讚揚理查德·邁爾斯博士對 POC 的奉獻。在擔任董事近 20 年後，里克於 3 月從董事會退休。

During that time, he has been a steadfast supporter and contributor to POC. Peter Anania, who joined us following the acquisition of Lighthouse Imaging in 2021, also retired from the Board in March. He was a great resource of experience and advice and has been a strong contributor during his entire time on the Board. We are fortunate to have 2 highly respected individuals with great experience in areas relevant to POC's current operations joining our Board, Bill Duncan and JJ Pellegrino. Many of you may know JJ from his role as CFO at LeMaitre Vascular, a NASDAQ-listed company in the medical space.

在此期間，他一直是 POC 的堅定支持者和貢獻者。彼得·阿納尼亞 (Peter Anania) 在 2021 年收購 Lighthouse Imaging 後加入我們，並於 3 月從董事會退休。他擁有豐富的經驗和建議，在董事會任職期間一直做出重要貢獻。我們很榮幸有兩位備受尊敬的人士加入我們的董事會，他們在 POC 當前營運相關領域擁有豐富的經驗，他們是 Bill Duncan 和 JJ Pellegrino。你們中的許多人可能都知道 JJ，他曾擔任納斯達克上市醫療公司 LeMaitre Vascular 的財務長。

JJ's record of success in helping to build the company from early beginnings to significant scale and shareholder appreciation are directly relevant to Precision Optics, especially since much of LeMaitre's growth was driven by scaling production of medical devices in Massachusetts facilities. Similarly, Bill Duncan brings decades of executive leadership and strategic expertise, further strengthening our commitment to innovation and growth, having been a marketing and general management executive at IBM for nearly three decades.

JJ 在幫助公司從起步階段發展到顯著規模並獲得股東讚賞方面所取得的成功與 Precision Optics 直接相關，特別是因為 LeMaitre 的大部分增長是由馬薩諸塞州工廠擴大醫療設備的生產所推動的。同樣，比爾鄧肯 (Bill Duncan) 擁有數十年的高階主管領導經驗和策略專業知識，他曾在 IBM 擔任行銷和總經理近三十年，進一步加強了我們對創新和成長的承諾。

Bill's experience building and leading sales and marketing teams and in general corporate management will be valuable to us as we work to capitalize on sizable market opportunities. With that, let me turn it over to Wayne to review the financials in more detail. I will then provide some closing comments and open the call to questions. Wayne?

當我們努力利用巨大的市場機會時，比爾在建立和領導銷售和行銷團隊以及一般公司管理方面的經驗對我們來說非常寶貴。說完這些，讓我把任務交給韋恩，讓他更詳細地檢視一下財務狀況。然後我將發表一些結束語並開始提問。韋恩？

Thank you, Joe. Let me expand on some of Joe's comments on the financial results, starting with revenue. For the third quarter, revenue was $4.2 million compared to $5.2 million in the third quarter of fiscal 2024. Breaking it down, production revenue was $3.2 million compared to $3 million in the year-ago quarter, while engineering revenue was $924,000 compared to $2.3 million in the year-ago quarter. As Joe mentioned, low yields forced us to pause production of our single-use cystoscope, resulting in unplanned increases in nonbillable sustaining engineering activities to support manufacturing scale-up programs and conduct a root cause analysis.

謝謝喬。我先從收入開始，進一步闡述喬對財務表現的一些評論。第三季營收為 420 萬美元，而 2024 財年第三季營收為 520 萬美元。具體來看，生產收入為 320 萬美元，而去年同期為 300 萬美元；工程收入為 924,000 美元，而去年同期為 230 萬美元。正如喬所提到的，低產量迫使我們暫停一次性膀胱鏡的生產，導致非計費維持工程活動意外增加，以支持製造擴大規模計劃並進行根本原因分析。

Our efforts, while ultimately successful, consumed engineering time and resources in these nonbillable activities. With the launch of our Unity platform, a customizable solution that encompasses our design approach and the interest generated by our presentations at three of the four major trade shows we will attend this year, we've seen the pace of engineering pipeline opportunities increasing.

我們的努力雖然最終取得了成功，但卻在這些不收費的活動中消耗了工程時間和資源。隨著我們的 Unity 平台的推出，這是一個包含我們的設計方法的可定制解決方案，以及我們在今年將參加的四大貿易展會中的三場的演示所引起的興趣，我們看到工程管道機會的步伐正在加快。

We also recognize the comparative impact of the full absorption of our engineering team's efforts to bring the single-use cystoscopy product to launch when we compare current results to the year-ago quarter. We expect to finish our fiscal year strongly with $6 million in sales in the next quarter. Our backlog and demand for production remains strong, driven by the aerospace and single-use programs.

當我們將目前結果與去年同期的結果進行比較時，我們也意識到，我們的工程團隊全力投入推出一次性膀胱鏡檢查產品所產生的比較影響。我們預計下個季度的銷售額將達到 600 萬美元，為本財年畫下完美句點。在航空航太和一次性專案的推動下，我們的積壓訂單和生產需求仍然強勁。

Turning to gross margin. For the quarter ended March 31, 2025, gross margins were 10% compared to 35% in the year-ago third quarter. As we mentioned, the low yields and one-month shutdown of the line and the under absorption of engineering resources were contributing factors here. We expect gross margin to recover as manufacturing continues to scale and revenues increase, particularly in the fourth quarter. We increased R&D spending in the quarter from $193,000 to $211,000 compared to the quarter ending March 31, 2024.

轉向毛利率。截至 2025 年 3 月 31 日的季度，毛利率為 10%，而去年同期第三季為 35%。正如我們所提到的，低產量、生產線停產一個月以及工程資源吸收不足都是造成這現象的因素。我們預計，隨著生產規模不斷擴大和收入增加，毛利率將會回升，尤其是在第四季。與截至 2024 年 3 月 31 日的季度相比，我們本季的研發支出從 193,000 美元增加到 211,000 美元。

R&D spending in the current fiscal year increased $302,000 to $930,000 compared to $627,000 during the nine months ended March 31, 2024, primarily due to our investment in Unity. Selling, general and administrative expenses, or SG&A, increased $321,000 to $2.2 million during the three months ending March 31, 2025, compared to $1.9 million during the three months ending March 31, 2024. The increase was primarily due to increased personnel costs, primarily stock-based compensation and recruiting expenses. Similarly, SG&A spending in the current fiscal year increased $357,000 to $5.9 million compared to $5.5 million during the nine months ended March 31, 2024. As a result of the lower revenue and associated lower gross profit, our net loss was $2.1 million for the quarter compared to $317,000 net loss for the same quarter last year.

本財年的研發支出增加了 302,000 美元，達到 930,000 美元，而截至 2024 年 3 月 31 日的九個月期間的研發支出為 627,000 美元，這主要歸功於我們對 Unity 的投資。截至 2025 年 3 月 31 日的三個月內，銷售、一般及行政費用（SG&A）增加了 321,000 美元，達到 220 萬美元，而截至 2024 年 3 月 31 日的三個月內為 190 萬美元。成長的主要原因是人事成本增加，主要是股票薪酬和招聘費用。同樣，本財政年度的銷售、一般及行政費用 (SG&A) 支出增加了 357,000 美元，達到 590 萬美元，而截至 2024 年 3 月 31 日的九個月期間為 550 萬美元。由於營收下降以及隨之而來的毛利潤下降，本季我們的淨虧損為 210 萬美元，而去年同期的淨虧損為 31.7 萬美元。

Adjusted EBITDA, which excludes stock-based compensation, interest expense, depreciation, and amortization, was negative $1.3 million in the third quarter of 2025 compared to a positive adjusted EBITDA of $52,000 in the same quarter last year. Cash at the end of March was in excess of $2.5 million. During the quarter, we raised approximately $5 million, paid down our revolving line of credit, and deployed working capital. I will now turn the call back over to Joe for some final comments.

2025 年第三季度，調整後 EBITDA（不含股票薪資、利息支出、折舊和攤提）為負 130 萬美元，而去年同期的調整後 EBITDA 為正 52,000 美元。三月底的現金超過250萬美元。在本季度，我們籌集了約 500 萬美元，償還了循環信用額度，並部署了營運資金。現在我將把電話轉回給喬，請他發表一些最後的評論。

Thank you, Wayne. Let me finish by summarizing a few key points. We were certainly frustrated by the impact of lower production yields on the single-use cystoscope and other production programs in the third quarter. But we believe we have corrected the root cause of these issues and are on a pathway to optimal production operations. Our confidence in correcting and achieving optimal yields is based in large part on our success getting through similar issues in our aerospace program, which is now running at 95% yield and continues to grow.

謝謝你，韋恩。最後，我總結幾個要點。我們對第三季一次性膀胱鏡和其他生產項目產量下降的影響感到非常沮喪。但我們相信我們已經糾正了這些問題的根本原因，並正在走上最佳生產營運的道路。我們對糾正和實現最佳產量的信心很大程度上基於我們在航空航天專案中成功解決了類似的問題，目前該專案的產量已達到 95% 並持續成長。

Our backlog remains strong, our customer relationships remain strong, and our pipeline opportunities are expanding due to the introduction of Unity. So while the path to reaching $6 million in quarterly revenue based on increasing production volume has been bumpier than we anticipated, we are still confident we will reach this milestone in Q4 and that this will be an inflection point leading to positive adjusted EBITDA. One final note before we take questions. We will be at the medical design and manufacturing exhibit in New York City next week, and I would welcome an opportunity to meet with those of you in the area. Please contact Robert if you'd like to set up a time to meet.

由於 Unity 的推出，我們的積壓訂單依然強勁，我們的客戶關係依然牢固，我們的通路機會也不斷擴大。因此，儘管基於產量增加實際 600 萬美元季度收入的道路比我們預期的更加坎坷，但我們仍然有信心在第四季度實現這一里程碑，並且這將是實現正調整後 EBITDA 的轉折點。在我們回答問題之前最後說一句。下週我們將參加紐約市的醫療設計和製造展覽會，我很高興有機會與該地區的各位見面。如果您想安排會面時間，請聯絡羅伯特。

To all of you on the call, I thank you for your continued support of Precision Optics. We'd be happy to take questions at this time.

對於電話會議中的所有嘉賓，我感謝你們對 Precision Optics 的持續支持。我們很樂意回答您的問題。

(Operator Instructions) (inaudible)

（操作員指示）（聽不清楚）

Just to be clear, are you saying that you had engineering clients lined up and you just can't collect revenue because you had to use your engineers to fix the prediction issue?

只是為了清楚起見，您是說您已經有工程客戶了，但您卻無法獲得收入，因為您必須使用工程師來解決預測問題？

That was part of the problem, yes.

是的，這是問題的一部分。

Okay. So now that it is fixed, you'll be able to collect engineering fees as well as production fees?

好的。那麼現在問題已經解決了，你們可以收取工程費和製作費嗎？

Correct. So it's not -- just to be clear, it's not just about collection, it's about the execution, right? So we use some of the engineers to work on the issues we had on the production line, so they were unable to work on billable projects that we could have collected on. That's correct.

正確的。所以這不是——只是為了清楚起見，這不僅與收集有關，還與執行有關，對嗎？因此，我們利用一些工程師來解決生產線上的問題，所以他們無法處理我們本來可以收取費用的收費項目。沒錯。

Okay. So it's nice to hear this about your win for the military customer. Is that a program that might continue after '26? Do you see it like as a kind of a long-term $1 million per quarter thing? Or will it be just done?

好的。很高興聽到你們為軍事客戶贏得了勝利。該計劃會在 26 年後繼續實施嗎？您是否認為這是每季 100 萬美元的長期計劃？還是就這麼完成了？

Yes. So this is for the aerospace program where they've committed to the $4 million per year. All indications from them and given what we know about the program is that it's likely to continue well beyond '26. That was simply the time frame that they were willing to commit to as part of the negotiation, but I have every expectation that it will continue much beyond that. Similarly, the numbers that we reported, the nearly $4 million a year, are the minimum order levels.

是的。這是針對航空航太計畫的，他們承諾每年投入 400 萬美元。他們給出的所有跡像以及我們對該計劃的了解都表明，該計劃很可能會在 26 年後繼續持續下去。這只是他們在談判中願意承諾的時間框架，但我完全相信談判將會持續很長一段時間。同樣，我們報告的數字，每年近 400 萬美元，是最低訂單水準。

And already, you can see from the backlog that we have today that they've been -- they have been ordering at a higher rate than that. So our hope and expectation is that the order rates will be higher and that they will continue beyond '26.

從我們今天的積壓訂單中您已經可以看到，他們的訂購量已經高於這個水平。因此，我們的希望和期望是訂單率將會更高，並且能夠持續到26年以後。

Right. Your backlog, you said that you had $6 million from that program in your backlog now. Is that -- are you saying that you only count backlog for one year ahead?

正確的。您說您的積壓訂單中現在有來自該項目的 600 萬美元。那是——您是說您只計算未來一年的積壓訂單嗎？

No, that's the total backlog for that customer, but we do believe we can work through that backlog within 12 months.

不，這是該客戶的全部積壓訂單，但我們確實相信我們可以在 12 個月內處理完這些積壓訂單。

And that endoscope program, have you -- did you have any contractual problems because of the production delay? Are you okay on the contract? Are you -- is there a risk of them getting a second supplier or anything like that?

那麼，那個內視鏡項目，您是否因為生產延遲而遇到任何合約問題？您同意這份合約嗎？您—他們是否有找到第二家供應商或類似供應商的風險？

So, we are okay on the contract. This is a customer that we have a very good relationship with. And so, they were involved while we were dealing with the shutdown of the line. They had some engineers here. They were collaborating with us.

所以，我們對這份合約沒有異議。這是我們關係非常好的一位客戶。因此，當我們處理生產線關閉事宜時，他們也參與其中。他們這裡有一些工程師。他們正在與我們合作。

We were working together. Of course, they were disappointed that we weren't satisfying the delivery rates that they would like, but they are very cooperative and very supportive. even to the point where, as I mentioned in my comments, but I went through it quickly, they gave us an order to stand up a second production line after this actually in the midst of all of this happening, I think, because they saw the way that we were dealing with the issue and the way that we were resolving it.

我們一起工作。當然，他們對我們的交付率未能滿足他們的需求感到失望，但他們非常合作，非常支持。正如我在評論中提到的那樣，但我很快就看完了，他們甚至命令我們在此之後建立第二條生產線，實際上在所有這一切發生的過程中，我想，是因為他們看到了我們處理問題的方式以及我們解決問題的方式。

To answer your question fully, the question of having a second supplier, there is a mechanism where they can manufacture themselves or have a second supplier and we're paid a royalty as part of the agreement we have with them. And for risk reasons, they've told us that they will likely do that at some point.

為了全面回答您的問題，即是否有第二個供應商的問題，有一種機制，他們可以自己生產或有第二個供應商，並且我們會根據與他們達成的協議獲得特許權使用費。出於風險原因，他們告訴我們，他們可能會在某個時候這樣做。

But it's not because of the issue we had this quarter. And as I say, despite having that issue, they've given us a new contract to stand up a second line. This is partly because we're delivering slower than they would like. But more importantly, with the second line, they're looking forward at the fact that their volume demands are going up faster than they anticipated when they gave us the original order a year ago. So, the short answer to your question is there's no contract problems that things are moving forward in a positive way and the relationship with the customer is very good.

但這並不是因為我們本季遇到的問題。正如我所說，儘管存在這個問題，他們還是給了我們一份新合約來建立第二條線路。部分原因是我們的交付速度比他們希望的要慢。但更重要的是，隨著第二條生產線的投產，他們期待產量需求的成長速度比一年前他們給我們最初訂單時的預期要快。因此，對你的問題的簡短回答是，沒有合約問題，事情正在朝著積極的方向發展，與客戶的關係非常好。

Have you and I apologize if I missed that during the call. Have you staffed up all your positions? Have you fixed that?

如果我在通話過程中錯過了這一點，我和您深感抱歉。你們所有職位都配備人員了嗎？你解決了嗎？

I think as of today, we have almost a full complement of assembly techs. We're now at a point where we're looking to have a little bit of extra because we need the line to be running smoothly. So, we're still looking for a few more people, but we've done our team has done a good job of bringing in the assembly techs that we need. This is why the line is running much better today than it was even a month or so ago.

我認為截至今天，我們幾乎已經擁有了全套裝配技術人員。我們現在需要獲得一些額外的資金，因為我們需要生產線順利運作。因此，我們仍在尋找更多的人才，但我們的團隊已經很好地引進了我們所需的組裝技術人員。這就是為什麼這條生產線現在的運作狀況比一個月前好得多。

And when is the second line going to be stood up?

第二條線什麼時候建成？

The second line, we expect to start running in the first half of fiscal '26. So sometime in the summer or fall. And we're working to add staff to the existing line now. I just said we're looking for extras. Partly, that's to have backup for the line now.

第二條生產線，我們預計26財年上半年開始營運。所以是在夏天或秋天的某個時候。我們現在正在努力為現有生產線增加員工。我剛才說了我們正在尋找臨時演員。部分原因是現在要為線路提供備份。

It's also to hit the ground be able to hit the ground running with that second line because we can move people from the first line to the second line when it's ready to go.

這也使得第二條線路能夠立即投入運行，因為當第二條線路準備就緒時，我們可以將人員從第一線路轉移到第二線路。

And just to get you on the record, you expect the current quarter to come in EBITDA positive. So there probably won't be any need for additional stock issues. Is that correct?

只是為了讓您了解情況，您預計本季的 EBITDA 將為正值。因此可能不需要發行額外的股票。對嗎？

That's correct.

沒錯。

Congrats on all your customer wins.

恭喜您贏得所有客戶。

All right. Operator, I guess we'll wait to see if any additional questions come in through the live teleconference line. I've got a couple here on the webcast. Actually, you know, it looks like we do have someone on the live line. Chuck, I'll turn it back over to you to queue up the next participant.

好的。接線員，我想我們會等待看看是否有任何其他問題透過即時電話會議線路傳入。我在網路廣播中聽到了幾個。實際上，您知道，看起來我們確實有人在線。查克，我將把時間交還給你，讓你安排下一位參與者。

(inaudible)

（聽不清楚）

Joe, I have a question about the development of the Unity line. So basically, you're taking your engineers and instead of them working, designing custom work for customers, you're having them develop this standardized production line, production of various components, and whatnot that they can mix and match and put together modularly, you might say. And so that means there are engineers that instead of bringing in money as they are paid to do work for customers, you're having to pay them, and that shows up in your R&D spending.

喬，我有一個關於 Unity 系列開發的問題。所以基本上，你不是讓你的工程師去工作，為客戶設計客製化工作，而是讓他們開發這條標準化生產線，生產各種組件，以及他們可以混合搭配並模組化組裝的東西，你可以這麼說。這意味著，工程師們不但不能透過為客戶工作而獲得收入，而且你必須支付他們工資，而這體現在你的研發支出上。

How long, I mean how long and how heavy will those expenses be to until you can say, well, we've got the basics of the Unity line all developed. And from here on out, other than some little tweaks and changes as components change and technology changes, we don't have to spend much more time on the basic line. All the engineers can go back customizing work for clients. Is this going to be a couple of increases?

我的意思是，需要多長時間、需要多大的花費，你才能說，好吧，我們已經開發了 Unity 系列的基礎知識。從現在開始，除了隨著組件和技術的變化而進行的一些小調整和變化之外，我們不必在基本生產線上花費太多時間。所有工程師都可以回去為客戶客製化工作。這會是幾次增加嗎？

Yes. Great question, Ralph. Let's see if I can answer this succinctly because there's a lot there. So, the first point I'd make is that as we've talked about in some of our earlier calls, what we're really doing here is capitalizing on the designs and the IP that we've developed over the years working on programs for our customers because one of the things we always insist on is that we maintain ownership of the IP. So that's the first thing.

是的。問得好，拉爾夫。讓我們看看我是否可以簡潔地回答這個問題，因為有很多問題。因此，我要說的第一點是，正如我們在之前的一些電話會議中談到的那樣，我們真正在做的是利用多年來為客戶開發程序所積累的設計和知識產權，因為我們始終堅持的事情之一就是我們保持對知識產權的所有權。這是第一件事。

We're not starting from scratch. And so, the amount of time that our engineers have to spend in order to put together the package that becomes Unity is much less than would be required if we were not piggybacking on top of the work we do for our customers, which is, in fact, billable, right? So even though there was some increase in the R&D cost, it's not nearly the increase that we would have seen if we were starting from scratch. That's the first thing. The second thing is people can see if they go to our website, but we've identified 4 sort of families of Unity platform projects that we expect the overall market will sort of gravitate towards.

我們並不是從零開始。因此，如果我們不搭理客戶的工作（這實際上是可計費的），我們的工程師為組裝 Unity 軟體包所花費的時間就會比所需的時間少得多，對嗎？因此，儘管研發成本有所增加，但與我們從零開始所看到的成長相比，成長幅度並不大。這是第一件事。第二件事是，人們可以看到他們是否造訪了我們的網站，但我們已經確定了 4 種 Unity 平台專案系列，我們預計整個市場將會傾向於這些專案。

And so, these are defined -- the first 3 are defined by endoscope size. And then the last one is sort of a catch-all for high precision and ultra-high-definition kinds of things. We've already essentially completed the first 2 categories. And with those categories, we've gone out and launched Unity. The other 2 categories, we certainly want to get finished, but we have a lot of flexibility on when and how aggressively we pursue those, and when and how aggressively we add sort of additional modular elements to these first 2 systems that have come out.

因此，這些定義——前 3 個是由內視鏡尺寸定義的。最後一個是對高精度和超高清事物的統稱。我們已經基本完成了前兩個類別。有了這些類別，我們就推出了 Unity。我們當然希望完成另外兩個類別，但我們在何時以及如何積極地追求這些類別，以及何時以及如何積極地為已經推出的這兩個系統添加額外的模組化元素方面擁有很大的靈活性。

So, we treat the Unity program as a regular product development program. So, it gets reviewed on a monthly basis by Wayne and Mahesh, our COO, and myself. And we evaluate the availability of engineers to be able to work on the Unity program and compare that to the need to have the engineers working on other billable revenue product development programs. So, having said all that, our goal really is to sort of fill in the places where we might have a gap in product development requirement for a specific engineering discipline. So, it will show up as R&D but as an R&D expense.

因此，我們將 Unity 計劃視為常規產品開發計劃。因此，我們的營運長 Wayne 和 Mahesh 以及我自己都會每月對其進行審查。我們評估了能夠參與 Unity 專案的工程師的可用性，並將其與參與其他可計費收入產品開發專案的工程師的需求進行比較。所以，綜上所述，我們的目標實際上是填補特定工程學科產品開發要求中可能存在的空白。因此，它將顯示為研發，但卻是研發費用。

But in some sense, it's trying to utilize some of the overhead that comes from not being able to run a program continuously because we have customers who need to do their pieces and those sorts of things, right? So, I guess the sort of short answer, and I'm looking at Wayne to see if he nods, is that the increase -- I would expect the R&D expense to continue at a similar level that we've seen over the last couple of quarters, maybe slightly lower because we were doing some extra work to get to the Unity launch. But it's not going to be a huge increase and it's going to be sort of a low-level sort of steady state for the next few quarters, I would say. Does that sound right, Wayne?

但從某種意義上說，它試圖利用由於我們的客戶需要完成他們的工作和諸如此類的事情而無法連續運行程式所產生的一些開銷，對嗎？所以，我想簡短地回答一下，我正在看韋恩是否點頭，那就是增長——我預計研發費用將繼續保持在過去幾個季度中看到的類似水平，也許會略低一些，因為我們正在進行一些額外的工作以推出 Unity。但我想說，這不會是一個巨大的成長，而且在接下來的幾個季度裡，這將是一種低水平的穩定狀態。聽起來對嗎，韋恩？

Your last sentence is what I would have said.

你最後那句話正是我想說的。

And then one other question related to Unity. From the point of view of potential customers who are saying, well, we could design this, we thought of a good new possibly good new product, and we could design it ourselves or get some other independent outfit, maybe a POC competitor to design it for us, or we could go with Unity. Once Unity is fully developed, let's say, a customer, we're talking about a customer showing up, let's say, a year from now. What would be the difference in terms of time to market between them going with Unity versus going with complete custom design?

還有一個與 Unity 相關的問題。從潛在客戶的角度來看，他們會說，好吧，我們可以設計這個，我們想到了一個好的新產品，我們可以自己設計它，或者找其他獨立的機構，也許是 POC 競爭對手來為我們設計它，或者我們可以選擇 Unity。一旦 Unity 完全開發出來，我們就會說，一個客戶，我們談論的是一個客戶出現，比如說，一年後。就上市時間而言，採用 Unity 和採用完全客製化設計有何不同？

We've looked at that pretty carefully because it's part of what we talk about a lot when we talk with our customers, because in some sense, this is critically important for them, because they always want to get to market as fast as possible. It depends, of course, on how complex the system is and how much it's going to deviate from the Unity platform itself. But generally speaking, we expect that it will accelerate the timeline by 6 to 12 months. Sorry. Yes, 6 to 12 months, half a year to a year.

我們非常仔細地研究了這一點，因為這是我們與客戶交談時經常談論的內容，因為從某種意義上說，這對他們至關重要，因為他們總是希望盡快進入市場。當然，這取決於系統的複雜程度以及它與 Unity 平臺本身的偏差程度。但總體來說，我們預計這將使時間表加快 6 到 12 個月。對不起。是的，6到12個月，半年到一年。

(Operator Instructions).

（操作員指令）。

All right, Chuck, I'll jump in again while we wait to see if additional people come in the dial-in call. We do have a couple of webcast questions once again. If you dialed into the webcast or linked into the webcast, you can type in your Ask Question here, Joe, surrounding the facilities. Previous calls, you've commented on potential need for updated facilities. Could you provide an update on that?

好的，查克，我們等著看是否有其他人撥入電話，我會再插話。我們確實再次有幾個網路廣播問題。如果您撥入網路廣播或連結到網路廣播，您可以在這裡輸入有關設施的問題，喬。在先前的通話中，您曾評論過可能需要更新設施。能提供最新進展嗎？

I'm going to let Wayne take that because he's been working on the leases.

我會讓韋恩來處理這件事，因為他一直在處理租約。

Thanks, Joe. So we operate in 3 different states. In El Paso, Texas, where we've had a facility down there for a number of years, we've extended our lease recently. That lease was expiring, so we've extended. In Wyndham, Maine, we have a lease that's expiring at the end of July.

謝謝喬。我們在三個不同的州都有業務。我們在德州埃爾帕索的工廠已經運作多年，最近我們延長了租約。該租約即將到期，因此我們進行了延期。在緬因州溫德姆，我們有一份租約將於七月底到期。

So we took the opportunity to locate space closer to Portland, where there's a better concentration of engineering talent that will help us as we grow going forward. In Massachusetts, we operate in 4 different buildings. And at the moment, we're evaluating options for consolidation and expect to make some decisions soon.

因此，我們藉此機會將辦公地點設在更靠近波特蘭的地方，那裡聚集了更多工程人才，這將有助於我們未來的發展。在麻薩諸塞州，我們在 4 棟不同的建築內開展業務。目前，我們正在評估合併方案，並希望很快做出一些決定。

(Operator Instructions).Thank you, Wayne. Perhaps the final question here, gentlemen. Are the tariffs impacting POC's business?

（操作員指示）。謝謝你，韋恩。先生們，這也許是最後一個問題了。關稅是否影響 POC 的業務？

So in some sense, the tariffs are impacting everyone's business to one extent or another. But let's see. So we're really in a growth mode. So in terms of the sort of overall expectations, it's not going to change our expectations for the kind of growth that we're going to see and the positive impact that, that growth can have. Having said that, we do source components overseas.

因此從某種意義上來說，關稅在不同程度上影響著每個人的業務。但讓我們看看。所以我們確實處於成長模式。因此，就整體預期而言，這不會改變我們對即將看到的成長類型以及這種成長可能產生的正面影響的預期。話雖如此，我們確實從海外採購零件。

The main part of the business where we're doing the single-use endoscopes and the aerospace programs and those sorts of things, there are some individual components, CMOS sensors come from overseas, for instance. But the total value of those components to the overall system is limited because most of the value in those cases is embodied in the design and the manufacturing. The one place where we do see a fair amount of impact is on our Ross Optical business. This is the group that's down in El Paso, Texas, that sources and then builds individual components and small subassemblies. That group, which today represents about 20% of our business, sources most of their components from other companies, some in the US, but many of them outside the US.

我們的主要業務是一次性內視鏡和航空航天專案等，其中的一些單一組件，例如 CMOS 感測器，來自海外。但這些組件對整個系統的總價值是有限的，因為在這些情況下大部分價值都體現在設計和製造上。我們確實看到受到相當大影響的一個地方是我們的 Ross Optical 業務。這是位於德克薩斯州埃爾帕索的團隊，負責採購並製造單個零件和小型子組件。該集團目前占我們業務的 20% 左右，其大部分零件均來自其他公司，其中一些在美國，但許多在美國境外。

We're looking at and watching what's happening with the tariffs. We have already had some communication with customers and made some initial indications that if the tariffs end up at an extreme place at a very high place that we'll have to share those additional costs with our customers. And by and large, those customers have reacted in an understanding way, right? We also are constantly pursuing alternative suppliers. So I think on the whole, we don't expect that the tariffs are going to derail our growth plans or have a major impact on the performance of the company.

我們正在關注和觀察關稅的進展。我們已經與客戶進行了一些溝通，並做出了一些初步表示，如果關稅最終達到非常高的水平，我們將不得不與客戶分擔這些額外的成本。總的來說，這些顧客都表示理解，對嗎？我們也在不斷尋找替代供應商。因此我認為總體而言，我們預計關稅不會破壞我們的成長計劃或對公司的業績產生重大影響。

All right. Very good. Joe, Wayne, I am not showing any further questions here. So with that, I'll turn it over to you for any closing remarks.

好的。非常好。喬，韋恩，我這裡沒有其他問題。因此，我將把最後發言權交給你們。

Thanks, Robert, and thank you, everyone, for joining us on the call today. I look forward to speaking with you soon. Thanks, everyone. Have a good evening.

謝謝，羅伯特，也謝謝大家今天參加我們的電話會議。我期待很快與您交談。謝謝大家。祝您晚上愉快。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。