Precision Optics announced a $678,000 development order to design and build a next‑generation borescope system for a leading aerospace and defense company. The order marks a key milestone in the company’s strategy to diversify beyond medical imaging and establish a foothold in the defense and aerospace market.
The new borescope will feature a small‑diameter design capable of 1080p HD resolution and engineered to withstand the extreme temperatures and pressures found inside jet engines. Precision Optics will leverage its proprietary micro‑optics and CMOS‑based digital imaging technology to deliver superior image quality and reliability in harsh operating environments.
Financially, the order represents a 3.4% increase in the company’s Q3 FY2025 revenue of $4.2 million, but as a development order it will not generate immediate revenue. The company reported a net loss of $2.1 million in Q3 FY2025, with gross margins falling to 10% from 35.5% in Q3 FY2024, largely due to production challenges with its single‑use cystoscope line.
CEO Joe Forkey said the win validates growing opportunities in defense and aerospace. The contract was secured after a rigorous evaluation process, including a supplier evaluation day where Precision Optics competed against three finalists. The company views the borescope as a gateway to larger production contracts in the sector.
Precision Optics primarily serves the healthcare sector, but the new contract signals a strategic shift toward defense and aerospace. The company’s recent launch of the Unity Imaging Platform—a modular system that streamlines the development and production of endoscopic imaging devices—has been cited as a key enabler in securing the order.
Forkey highlighted the company’s comprehensive capabilities, from advanced optical design to precision mechanical engineering and fully integrated electronic systems, and emphasized the role of the Unity platform in meeting the client’s demanding specifications. He also noted ongoing production issues with the cystoscope line that contributed to the Q3 loss.
While the development order is modest in dollar terms, it demonstrates Precision Optics’ ability to compete in high‑tech defense markets and could lead to larger contracts. The company remains focused on cost control and strategic investments to improve margins and capitalize on new market opportunities.
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