Precision Optics Enters into Main Purchase Agreement with Top Tier Aerospace Customer and Expands Program Backlog to $6.6 Million

Rhea-AI Summary

Precision Optics (NASDAQ: POCI) has signed a Main Purchase Agreement with a leading aerospace company, solidifying their commercial partnership that began in September 2023. The agreement showcases significant growth with:

• $3.1 million in new orders received during the current calendar year
• Total program backlog of $6.6 million to be delivered over the next 12 months
• Nearly $4 million per year in minimum purchase commitments through calendar 2026

To meet increased demand, POCI has doubled its clean room production line capacity. The partnership leverages Precision Optics' proprietary manufacturing technology for commercial aerospace applications.

Positive

• Secured $6.6 million program backlog for next 12 months
• Guaranteed minimum purchase commitments of ~$4 million annually through 2026
• Successfully doubled production capacity
• Received $3.1 million in new orders this calendar year

Negative

• None.

Insights

Financial Analyst

Precision Optics' Main Purchase Agreement with a top-tier aerospace customer represents a significant financial catalyst for this micro-cap company. The $6.6 million program backlog constitutes approximately 22% of POCI's $29.9 million market capitalization, making this development highly material to their financial outlook.

The agreement provides exceptional revenue visibility with $3.1 million in orders already received this year, $6.6 million backlog for delivery over the next 12 months, and minimum purchase commitments of nearly $4 million annually through 2026. This structure creates a predictable revenue stream through at least the next 21 months.

The company's decision to double clean room production capacity demonstrates management's confidence in fulfilling this expanded workload and suggests potential for operational leverage as production scales. Moving from ad-hoc orders to a formalized agreement with minimum commitments indicates the customer sees strategic value in POCI's proprietary manufacturing technology.

For specialized component manufacturers, securing multi-year purchase commitments from aerospace clients is uncommon and typically follows rigorous qualification processes. This agreement validates POCI's technological capabilities and manufacturing quality while potentially creating customer switching costs that strengthen their competitive position.

The formalization of this relationship significantly de-risks POCI's revenue outlook and should improve financial planning capabilities across the organization while potentially freeing resources previously dedicated to customer acquisition.

• $3.1 million of new orders received during the current calendar year
• $6.6 million customer program backlog expected to be delivered over next 12 months
• $3.9 million of additional commitments expected to be received for calendar 2026
  

GARDNER, Mass., April 03, 2025 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. (NASDAQ: POCI), a leading designer and manufacturer of advanced optical instruments for the medical and defense/aerospace industries, today announced it has executed a Main Purchase Agreement which will govern the Company’s ongoing work with a top tier aerospace company. The agreement highlights the commitment between the companies to expand production of a commercial application that leverages Precision Optics’ proprietary manufacturing technology.

Orders during the current calendar year for this program have exceeded $3.1 million, increasing total backlog from this program to $6.6 million. To accelerate deliveries, POC recently doubled its clean room production line capacity and expects the current backlog to be delivered over the next 12 months.

The two parties commenced production of this program in September 2023. Follow-on orders have been received on an ongoing basis since that time, culminating in the execution of a formal agreement between the two companies containing minimum purchase commitments of nearly $4 million per year through calendar 2026.

“After many months of negotiation, we are pleased to announce we have executed an agreement which will govern manufacturing for this customer going forward,” commented Dr. Joe Forkey, CEO of Precision Optics. “This agreement provides us with a level of predictability and visibility to our growing production schedule which will benefit both us and our customer. I look forward to a long and successful relationship with this customer going forward.”

About Precision Optics Corporation
Founded in 1982, Precision Optics is a vertically integrated optics company primarily focused on leveraging its proprietary micro-optics, 3D imaging and digital imaging technologies to the healthcare and defense/aerospace industries by providing services ranging from new product concept through mass manufacture. Utilizing its leading-edge in-house design, prototype, regulatory and fabrication capabilities as well as its Ross Optical division's high volume worldwide sourcing, inspecting and production resources, the Company is able to design and manufacture next-generation product solutions to the most challenging customer requirements. Within healthcare, Precision Optics enables next generation medical device companies around the world to meet the increasing demands of the surgical community who require more enhanced and smaller imaging systems for minimally invasive surgery as well as 3D endoscopy systems to support the rapid proliferation of surgical robotic systems. In addition to these next generation applications, Precision Optics has supplied top tier medical device companies a wide variety of optical products for decades, including complex endocouplers and specialized endoscopes. The Company is also leveraging its technical proficiency in micro-optics to enable leading edge defense/aerospace applications which require the highest quality standards and the optimization of size, weight and power. For more information, please visit www.poci.com.

About Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. federal securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements in this press release include, without limitation, the expected backlog for the next 12 months and projected additional commitments expected to be received during calendar 2026. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release are based on certain assumptions and analyses made by the management of the Company in light of their respective experience and perception of historical trends, current conditions, and expected future developments and their potential effects on the Company as well as other factors they believe are appropriate in the circumstances. There can be no assurance that future developments affecting the Company will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the parties), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including the demand for the Company's products, global supply chains and economic activity in general and other risks and uncertainties identified in the Company's filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of the assumptions being made prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

Company Contact:
PRECISION OPTICS CORPORATION
22 East Broadway
Gardner, Massachusetts 01440-3338
Telephone: 978-630-1800

Investor Contact:
LYTHAM PARTNERS, LLC
Robert Blum
Telephone: 602-889-9700
poci@lythampartners.com

FAQ

What is the total backlog value for Precision Optics (POCI) under the new aerospace agreement?

The total program backlog is $6.6 million, expected to be delivered over the next 12 months.

How much are the minimum purchase commitments for POCI through 2026?

The agreement includes minimum purchase commitments of nearly $4 million per year through calendar 2026.

When did POCI begin production for this aerospace program?

Production for this aerospace program commenced in September 2023.

How has POCI expanded its production capacity for the aerospace contract?

POCI has doubled its clean room production line capacity to accelerate deliveries.

What is the value of new orders received by POCI in the current calendar year?

POCI has received $3.1 million in new orders during the current calendar year.