Full Press Release Details
Contact: Mark Murphy, Chief Executive Officer
Brett Maas, Investor Relations
Hayden Communications, Inc.
PRO-DEX, INC. ANNOUNCES FIRST QUARTER FISCAL 2007 FINANCIAL RESULTS
Sales increase 39% for the quarter; Company
reports $0.03 EPS Backlog as of 9/30/06 of $9.1 million vs.
$7.6 million at 9/30/05 and $11.7 million at 6/30/06
SANTA ANA, CA, November 14, 2006 - PRO-DEX, INC. (NASDAQ: PDEX) a
developer and manufacturer of embedded motion control, miniature rotary drive
systems and fractional horsepower DC motors, which enables speed-to-market for
customers who serve the medical, dental, factory automation, scientific
research, aerospace and military markets, today announced financial results for
the first quarter ending September 30, 2006.
Consolidated net sales for the first quarter were $5.2 million, an
increase of 39 percent compared to the first quarter of fiscal 2006. Net income
for the first quarter was $242,000, or $0.03 per basic and $0.02 per diluted
share, compared to net income of $262,000, or $0.03 per basic and diluted share
for the first quarter last year. In calculating earnings per share, the Company
utilized 9.8 million fully diluted shares for the fiscal 2007 first quarter and
10.0 million diluted shares for the 2006 fiscal first quarter.
Mark P. Murphy, the Company's President and Chief Executive Officer,
commented, "We are pleased to announce another quarter with revenues north of $5
million as we align the organization to realize the Company's earnings potential
and continue to improve the reliability of our products through enhanced designs
and a focus on quality. We are very excited to announce the addition of Mr. Joe
Rotino as the Company's new Vice President of Quality Management and Regulatory
Affairs. Joe brings over 20 years of experience in medical and dental device
manufacturing, having worked for Kendall McGaw Labs, Baxter Healthcare, and
Sybron Dental. He holds a BA in Mathematics and a Masters in Quality Assurance.
In addition to his technical strengths, Joe's collaborative and energetic
leadership style will most certainly bring us to the next level of quality focus
Gross profit for the first quarter was $2.0 million, or 38 percent of
sales, compared with gross profit of $1.7 million, or 45 percent of sales in the
first quarter last year and compared sequentially with $1.7 million, or 32
percent of sales in the fourth quarter of fiscal year 2006. Approximately 5
percent of the difference in gross profit margin compared to the prior-year
first quarter is due to lower margins associated with the Astromec products that
have margins in the 20-30 percent range. The remaining 2 percent of the
reduction was due to other factors.
Operating expenses increased by 21 percent to $1.6 million compared to
$1.3 million in the first quarter of last year. Compared to last quarter,
operating expenses increased $86 thousand. The increase over the first quarter
of last year is associated with higher product development and increased sales
and marketing costs. Included in operating expenses for the first quarter of
fiscal 2007 compared to the first quarter of fiscal 2006 was a 33 percent
increase in selling expenses, a 3 percent decrease in general and administrative
expenses and a 46 percent increase in research and development expense. The
addition of Pro-Dex Astromec added $79,000 to the total consolidated research
and development costs and the remainder of the increase was due to approximately
$46,000 in higher personnel costs and $76,000 for increased independent
research, training and tooling costs.
Mr. Murphy continued, "The improvement in our gross margins from 32%
last quarter to 38% this quarter is a positive sign that we are moving in the
right direction, but there is much work ahead of us. As part of our effort to
improve our engineering capabilities and strengthen our infrastructure to meet
demand, we have invested in independent engineering research, employee training,
software tools, and improved equipment. We are also aggressively recruiting
engineering talent. We believe that these initiatives will improve our
speed-to-market expertise for our customers while maintaining outstanding levels
of quality. We completed the quarter with a backlog of $9.1 million compared
with a backlog of $11.7 million at June 30 and recorded over $2.5 million in new
order bookings. Since September 30, 2006, our backlog has climbed back up to
$10.7 million, demonstrating ongoing demand for our products. We continue to
believe we are well positioned to succeed, based on strong demand for our
services, ongoing profitability, sustained cash generation and a company-wide
commitment to seize all opportunities for improvement."
Pro-Dex completed the first quarter with cash and cash equivalents of
$295,000 compared to cash and cash equivalents of $358,000 as of June 30, 2006.
The Company generated more than $695,000 in operating cash during the first
quarter and reduced its credit line borrowings by $500,000 during that period,
leaving $400,000 of its credit line available at the end of the quarter. Total
working capital was $6.2 million as of September 30, 2006 compared to $6.1
million on June 30, 2006. Shareholder's equity increased 2 percent to $12.3
million from 12.1 million as of June 30, 2006.
TELECONFERENCE INFORMATION:
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Investors and all others are invited to listen to a conference call
discussing the first quarter 2007 results, today at 4:30 p.m. Eastern Time. The
call is scheduled to be broadcast live over the Internet on Tuesday, November
14, 2006 at 4:30 p.m. Eastern Time and may be accessed by visiting the Company's
website at www.pro-dex.com. Mark Murphy, Chief Executive Officer and Jeff
Ritchey, Chief Financial Officer, plan to host the call. If you would like to
join the call, dial (866) 323-3543 U.S. and (706) 679-0672 International,
conference I.D. 1725571. You may identify the call as the Pro-Dex First Quarter
Pro-Dex Inc., with operations in Santa Ana, California, Beaverton,
Oregon and Carson City Nevada, specializes in bringing speed to market in the
development and manufacture of technology-based solutions that incorporate
embedded motion control, miniature rotary drive systems and fractional
horsepower DC motors, serving the medical, dental, semi-conductor, scientific
research and aerospace markets. Pro-Dex's products are found in hospitals,
dental offices, medical engineering labs, scientific research facilities,
commercial and military aircraft, and high tech manufacturing operations
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