Precision Optics Corporation, Inc. Common Stock Lytham Partners Fall 2026 Investor Conference

All right. Hello everyone, and thank you for continuing to join us throughout the day here at the Lytham Partners Fall 2026 Investor Conference. Again, my name is Robert Blum, managing partner here at Lytham. Up next, Joe Forkey, Chief Executive Officer of Precision Optics, will take us through the company's slide presentation. Joe, thanks so much for your participation today. The floor is all yours.

Great. Thanks very much, Robert. Thank you all for joining us today. I am really happy to be here to tell you about Precision Optics Corporation. This is a great time for us to be talking about POC. We just announced our fiscal year-end results yesterday. This is for our fiscal 2026. We have a fiscal year that runs from July 1st to June 30th. The big takeaways here were that our revenue has grown quite dramatically year-over-year, up by 65%, from about $19 million-$20 million up to $31.5 million. This is driven by a couple of big programs that we will talk about in some of the later slides. We broke through adjusted EBITDA positive. We have two quarters in a row now with the third quarter and the fourth quarter, at adjusted EBITDA positive.

We are really pleased with the results we reported yesterday. I will tell you more about what led to those great results. First, let us start with who POC is, what POC is, and what we do. POC, as the name implies, Precision Optics, is an optics company. We are a technology company. Everything that we do has something to do with optics one way or another. We do a lot with imaging. We do a lot with laser comms. Any place where you have to have an optical system in order to support the application, we can bring our technology to bear on those kinds of systems. We are a technology company that has our own proprietary technology. Our business model is one where we show that to our customers. We look at customer requirements.

If they and we agree that our technology can enable their next generation product, we go through a design, feasibility, prototype, validation process. That is all the product development process. We get paid for that, but we maintain ownership of the IP. What we are really after is getting to the volume production, because the markets that we work in are very risk-averse. The programs tend to be very sticky. The production tends to last for a long time. Ultimately, we want to get to more and more volume production programs. There are two that have gone into production in the last couple of years, which I will talk about, which have really made a difference. We have a number of additional ones that are in our product development pipeline that we see coming into production in the near term.

The business model, again, is proprietary technology, product development that we get paid for, and then roll things into production. As more and more production programs come online, the company grows. We have really been through an inflection point in the last 12 months in fiscal 2026. As you can see here, our quarterly revenues have grown quite dramatically. Our gross margin is still lower than we anticipate it will be. It should be in the 35%-40% range when you blend all the different kinds of programs we work on. But this is a nice recovery from some of the growing pains we had in order to stand up the production team in order to support the significant growth that we have seen over the last fiscal year. This was driven by two very large programs, which I will talk about in a later slide.

But also, the inflection point occurred because we got those two big orders. We had to sort of stand up a new production capability within our company. It was almost like standing up a startup production company, and so that took a bit of time. We had some EBITDA losses if you go back and look at earlier quarters. But we also found that we needed to update our leadership team, and so we hired a new COO back in October of last year. We also since then have brought in a new senior director of operations, a new VP of engineering. Our old VP of engineering has stayed on in a new consulting role. And so we built out both the team as well as the facilities in order to be able to support these bigger production programs, and we expect additional growth going forward.

Let me tell you a little bit about the specific technology that we work on. Optics is a very broad discipline. We as a small company focus on some very specific areas within the general discipline of optics. The first area is micro-optics. We make some of the smallest optics in the world. We make individual optics in our optics shop that are as small as 50 microns. That is about the width of a human hair. And then we can build entire imaging systems in a sub-millimeter size using some of these very small optics. The second area that we focus on is multichannel or ultra-high precision systems. These are systems where we are looking at multiple images. We might look at a white light image and a fluorescence image and then overlay those.

The process of overlaying those requires very high precision in terms of how you align all of the optics that are in the system. 3D endoscopes is another area here. Ultra-high precision, like 4K imaging. Those sorts of things are the things that we do in our multichannel and ultra-high precision technology. The third area is digital imaging more broadly. In this area, we are taking advantage of the CMOS sensor technology that has been developed mainly for cell phones and laptops, and we bring these to bear on other imaging systems, mainly in the medical device space. We are very unique in the space that we work in that we are vertically integrated. We take programs, as I already said, from the design phase all the way through to mass manufacture.

That means that we have to have a very broad set of disciplines represented in our engineering team, and we need a team that can transfer programs from design into manufacture. It means that we work on design for manufacturing right from the beginning of the program. It means we have our own machine shop that can turn prototypes very quickly. It means we have our own optics lab, which can fabricate individual components from raw blocks of glass. We have all of these different disciplines in one company so that we can properly support a customer from the design phase all the way through to the mass manufacture. That's very unique, and it's a big competitive advantage for us. There are three markets that we work in. The first one is the space market, and by that, I mean satellite communications.

Until recently, we included this market as a sub-market, as a segment of defense aerospace, but we're seeing enough opportunity here that we're starting to work in this area more and more.