Full Press Release Details
Contact: Harold A. Hurwitz,
Chief Executive Officer
PRO-DEX, INC. ANNOUNCES FISCAL 2014 FIRST
CA, November 13, 2013 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results
for its fiscal 2014 first quarter ended September 30, 2013.
Sales for the quarter
ended September 30, 2013 decreased 26% to $2.6 million from $3.5 million for the corresponding quarter in 2012. This decrease was
due primarily to a deferral in the timing of product orders from the Company's current largest powered surgical instrument
customer, partially offset by increases in surgical instrument sales to other customers, and to a decrease in motion control product
the quarter ended September 30, 2013 decreased to $945,000, compared to gross profit of $1.2 million for the year-ago period, primarily
as a result of the sales volume decrease between periods, partially offset by a decrease in product warranty costs. Gross profit
as a percentage of sales was 37% for the quarter ended September 30, 2013, as compared to 36% for the corresponding quarter in
2012, resulting primarily from improvements in production efficiency.
(which include selling, general and administrative, and research and development expenses) for the quarter ended September 30,
2013 decreased 28% to $924,000 from $1.3 million in the prior year's corresponding quarter, reflecting the effects of the
Company's cost reduction program.
Income from continuing
operations for the quarter ended September 30, 2013 was $18,000, compared to a loss from continuing operations of $59,000 in the
corresponding quarter in 2012. Net income for the quarter ended September 30, 2013 was $212,000, or $0.06 per diluted share, compared
to a net loss of $17,000, or $0.01 per diluted share, for the corresponding quarter in 2012. The 2013 quarter reflects a $167,000
gain from the previously announced sale in July 2013 of the Company's facility in Carson City, Nevada, that had housed the
Company's former Astromec fractional horsepower motor business, which the Company accounts for as a discontinued operation.
Hurwitz, the Company's President and Chief Executive Officer, commented, "It is good to
report profitable operating results again. Certainly, one quarter does not create, nor imply, a trend. Even so, the operating results
for the quarter ended September 30, 2013 reflect the long, painful, and now rewarding process of right-sizing our cost footprint
to our current revenue base."
question, achieving the goal of a rebuilt revenue base is still ahead of us, and we maintain our focus on that goal. During the
quarter ended September 30, 2013, we continued to make significant progress on engineering projects, with a goal to deliver
to our customers in late fiscal 2014 or early fiscal 2015 a next-generation platform for powered surgical instruments in which
significant intellectual property rights. In addition, we have several active proposals in the hands of existing
and prospective customers for similar such projects."
quarter, we continued engineering work in collaboration with an existing customer on a contract manufacturing project related to
a new surgical system, the development phase of which is also expected to culminate in the late fiscal 2014 or early fiscal 2015
the first year in which the full effect of our cost reduction efforts of the past year will be reflected in our results. This
said, our efforts in cost reduction and control are not yet complete. Nonetheless, year-over-year stability of gross margins despite
lower sales volumes, together with year-over-year decreases of 66% in selling expenses, 25% in general and administrative expenses,
and 8% in research and development expenses, we believe clearly demonstrate how far we have come."
Teleconference Information:
Investors and analysts
are invited to listen to a broadcast review of the Company's fiscal 2014 first quarter financial results
today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) that may be accessed by visiting the Company's website at www.pro-dex.com.
The conference call may also be accessed at www.InvestorCalendar.com. Investors and analysts
who would like to participate in the conference call may do so via telephone at (877) 407-8033,
or at (201) 689-8033 if calling from outside the U.S. or Canada.
those who cannot access the live broadcast, a replay will be available approximately two hours after the completion of the call
until midnight (Eastern Time) on November 28, 2013 by calling (877) 660-6853, or (201)
612-7415 if calling from outside the U.S. or Canada, and then entering conference I.D. number 13572779.
An online archive of the broadcast will be available on the Company's website www.pro-dex.com for a period of 365
About Pro-Dex, Inc.:
Inc., with operations in California and Oregon, specializes in the design, development and manufacture of powered rotary drive
surgical and dental instruments used primarily in the orthopedic, spine, maxocranial facial and dental markets. Its OMS division
designs and manufactures embedded motion control systems serving the medical, dental, semi-conductor and scientific research markets.
Pro-Dex's products are found in hospitals, dental offices, medical engineering labs, scientific research facilities and high tech
manufacturing operations around the world. For more information, visit the Company's website at www.pro-dex.com.
Statements herein concerning
the Company's plans, growth and strategies may include 'forward-looking statements' within the context of the federal securities
laws. Statements regarding the Company's future events, developments and future performance, as well as management's expectations,
beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws.
The Company's actual results may differ materially from those suggested as a result of various factors. Interested parties should
refer to the disclosure concerning the operational and business concerns of the Company set forth in the Company's filings with
the Securities and Exchange Commission.
PRO-DEX, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2013 | June 30, 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1,829,000 | $ | 1,680,000 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $27,000 at September 30, 2013 and $24,000 at June 30, 2013 | 1,361,000 | 1,339,000 | ||||||
| Unbilled receivables | 398,000 | 244,000 | ||||||
| Other current receivables | 15,000 | 32,000 | ||||||
| Inventories | 3,973,000 | 3,834,000 | ||||||
| Prepaid expenses | 139,000 | 157,000 | ||||||
| Income taxes receivable | 1,000 | 2,000 | ||||||
| Deferred income taxes | 60,000 | 59,000 | ||||||
| Total current assets | 7,776,000 | 7, 347,000 | ||||||
| Investments | 654,000 | 370,000 | ||||||
| Equipment and leasehold improvements, net | 1,926,000 | 2,065,000 | ||||||
| Real estate held for sale | - | 733,000 | ||||||
| Intangibles | 17,000 | - | ||||||
| Other assets | 80,000 | 80,000 | ||||||
| Total assets | $ | 10,453,000 | $ | 10,595,000 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 482,000 | $ | 844,000 | ||||
| Accrued expenses | 1,147,000 | 1,276,000 | ||||||
| Deferred revenue | 212,000 | 141,000 | ||||||
| Income taxes payable | 47,000 | 48,000 | ||||||
| Capital lease obligations | 6,000 | 5,000 | ||||||
| Total current liabilities | 1,894,000 | 2,314,000 | ||||||
| Non-current liabilities: | ||||||||
| Deferred income taxes | 60,000 | 59,000 | ||||||
| Deferred rent | 261,000 | 270,000 | ||||||
| Capital lease obligations | 14,000 | 15,000 | ||||||
| Total non-current liabilities | 335,000 | 344,000 | ||||||
| Total liabilities | 2,229,000 | 2,658,000 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Common shares; no par value; 50,000,000 shares authorized; 3,343,988 shares issued and outstanding at September 30, 2013 and June 30, 2013 | 17,031,000 | 17,012,000 | ||||||
| Accumulated other comprehensive income | 61,000 | 5,000 | ||||||
| Accumulated deficit | (8,868,000 | ) | (9,080,000 | ) | ||||
| Total shareholders' equity | 8,224,000 | 7,937,000 | ||||||
| Total liabilities and shareholders' equity | $ | 10,453,000 | $ | 10,595,000 |
PRO-DEX, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| For the Three Months Ended September 30, | ||||||||
| 2013 | 2012 | |||||||
| Net sales | $ | 2,555,000 | $ | 3,461,000 | ||||
| Cost of sales | 1,610,000 | 2,225,000 | ||||||
| Gross profit | 945,000 | 1,236,000 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 92,000 | 274,000 | ||||||
| General and administrative expenses | 457,000 | 608,000 | ||||||
| Research and development costs | 375,000 | 406,000 | ||||||
| Total operating expenses | 924,000 | 1,288,000 | ||||||
| Income (loss) from continuing operations before items below | 21,000 | (52,000 | ) | |||||
| Other expense: | ||||||||
| Interest expense | (2,000 | ) | (6,000 | ) | ||||
| Total other expense | (2,000 | ) | (6,000 | ) | ||||
| Income (loss) from continuing operations before provision for income taxes | 19,000 | (58,000 | ) | |||||
| Provision for income taxes | 1,000 | 1,000 | ||||||
| Income (loss) from continuing operations | 18,000 | (59,000 | ) | |||||
| Income from discontinued operations, net of provision for income taxes of nil in 2013 and $47,000 in 2012 | 194,000 | 42,000 | ||||||
| Net income (loss) | $ | 212,000 | $ | (17,000 | ) | |||
| Other comprehensive income, net of tax | ||||||||
| Unrealized gain from marketable equity investments | 56,000 | - | ||||||
| Total other comprehensive income | 56,000 | - | ||||||
| Comprehensive income (loss) | $ | 268,000 | $ | (17,000 | ) | |||
| Per share data: | ||||||||
| Income (loss) from continuing operations | ||||||||
| Basic | $ | 0.00 | $ | (0.02 | ) | |||
| Diluted | $ | 0.00 | $ | (0.02 | ) | |||
| Income from discontinued operations | ||||||||
| Basic | $ | 0.06 | $ | 0.01 | ||||
| Diluted | $ | 0.06 | $ | 0.01 | ||||
| Net income (loss) | ||||||||
| Basic | $ | 0.06 | $ | (0.01 | ) | |||
| Diluted | $ | 0.06 | $ | (0.01 | ) | |||
| Weighted average shares outstanding - basic | 3,344,697 | 3,279,578 | ||||||
| Weighted average shares outstanding - diluted | 3,353,447 | 3,279,578 |
PRO-DEX, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Three Months Ended September 30, | ||||||||
| 2013 | 2012 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 212,000 | $ | (17,000 | ) | |||
| Adjustments to reconcile net income ( loss) to net cash (used in) operating activities: | ||||||||
| Depreciation and amortization | 132,000 | 151,000 | ||||||
| Gain on sale of real estate held for sale | (167,000 | ) | - | |||||
| Allowance for doubtful accounts | 3,000 | (6,000 | ) | |||||
| Share-based compensation | 20,000 | 30,000 | ||||||
| Changes in: | ||||||||
| Accounts receivable and other current receivables | (9,000 | ) | (212,000 | ) | ||||
| Unbilled receivables | (154,000 | ) | - | |||||
| Inventories | (139,000 | ) | (691,000 | ) | ||||
| Prepaid expenses | 18,000 | 20,000 | ||||||
| Accounts payable, accrued expenses and deferred rent | (500,000 | ) | 511,000 | |||||
| Deferred revenue | 71,000 | - | ||||||
| Income taxes receivable and payable | 1,000 | 42,000 | ||||||
| Net cash used in operating activities | (512,000 | ) | (172,000 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of investments | (228,000 | ) | - | |||||
| Purchases of equipment | - | (41,000 | ) | |||||
| Proceeds from sale of real estate held for sale | 900,000 | - | ||||||
| Proceeds from sale of equipment | 6,000 | - | ||||||
| Increase in intangibles | (17,000 | ) | - | |||||
| Net cash provided by (used in) investing activities | 661,000 | (41,000 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Principal payments on bank term loan | - | (774,000 | ) | |||||
| Net cash used in financing activities | - | (774,000 | ) | |||||
| Net increase (decrease) in cash | 149,000 | (987,000 | ) | |||||
| Cash, beginning of period | 1,680,000 | 4,112,000 | ||||||
| Cash, end of period | $ | 1,829,000 | $ | 3,125,000 | ||||
| Supplemental Information | ||||||||
| Cash payments for interest | $ | 2,000 | $ | 9,000 | ||||
| Cash payments for income taxes | $ | - | $ | - |