Full Press Release Details
| Contact: | Mark Murphy, Chief Executive Officer | ||
| (714) 241-4411 | |||
| Brett Maas, Investor Relations | |||
| Hayden Communications, Inc. | |||
| (646) 536-7331 |
INC. ANNOUNCES THIRD QUARTER FISCAL 2007 FINANCIAL RESULTS
increase 40.4% for the quarter, 34.5% year-to-date
income increases to $216,000 or $0.02 per share for the
May 15, 2007 - PRO-DEX, INC. (NASDAQ: PDEX) a developer and manufacturer of
motion control, miniature rotary drive systems and fractional horsepower DC
motors, which enables
customers who serve the medical, dental, factory automation, scientific
research, aerospace and military markets,
announced financial results for the fiscal third quarter ending March 31, 2007.
net sales for the third fiscal quarter were $5.9 million, an increase of 40.4
percent compared to the $4.2 million for the third fiscal quarter of 2006.
topline growth was led by a 90 percent increase in medical product sales and
45 percent increase in dental revenues. The Company reported net income of
$216,000, or $0.02 per basic and fully diluted share (based on 9.8 million
shares) compared to net income of $6,000, or $0.00 per basic and fully diluted
share (based on 10.0 million shares) last year.
Murphy, the Company's President
and Chief Executive Officer, commented, "Strong sales, particularly to our
continuing medical and dental customers, contributed to our improved results
the quarter. This continued the recent trend of growing our overall revenue
base, primarily by a strong strategic position with our traditional customers.
Astromec's sales were also up 8 percent over the third quarter of last year,
which was the first full quarter following the acquisition by Pro-Dex. In
addition, we booked $2.7 million in new orders from current customers
quarter and completed the quarter with a backlog of $9.3 million. Strong April
bookings allowed us to rebuild our backlog to $10.3 million, down only 12
percent from the backlog at December 31, 2006 despite converting a significant
amount of backlog into revenue during the four-month period since then. We
continue to have active conversations with several prominent potential customers
for additional work and are cautiously optimistic that some of these
conversations will result in orders over the next six to 12 months. I'm also
pleased with our return to profitability, driven by higher revenues and a
sequential and year-over-year increase in our quarterly gross profit
profit for the third fiscal quarter improved to $2.2 million or 36.4 percent
sales, compared with gross profit of $1.5 million, or 34.5 percent of sales,
the third quarter last year and gross profit of $1.7 million, or 29.6 percent
sales in the second quarter of 2007. These improvements in gross profit margin
are due to a product sales mix favoring the medical products that reached 42
percent of sales in this quarter and lower warranty costs at $195,000 this
quarter compared to $320,000 last quarter and $360,000 in last year's third
expenses increased by 24.7 percent to $1.8 million compared to $1.4 million
the third fiscal quarter last year due to a 38.3 percent increase in general
administrative expenses driven by the inclusion of $113,000 in FAS 123(R)
related costs, a 17.3 percent increase in research and development expense
13.8 percent increase in selling expenses. However, when compared to the higher
sales level, operating expenses declined to 30.5 percent of sales in the third
fiscal quarter of 2007, a reduction from 34.3 percent of sales in the third
fiscal quarter of 2006.
from operations for the quarter was $351,000 compared with $8,000 for the
Murphy continued, "In the last eight months, we have seen a significant
improvement in the collaborative environment at Pro-Dex, and I commend our
associates for their hard work, dedication and commitment to the Company, its
customers and shareholders. While we all know there is much work left to do,
have begun to see the shift from past-based recovery to future-based
opportunity. Our Engineering resources continue to be invested partially in
improvement of two related designs for a single customer, where such designs
resulting in high warranty expenses for the Company. The remainder of our
Engineering resources has now transitioned to scoping and proposing new work.
are working diligently to increase our momentum in this important shift, but
only after we are confident that our designs are excellent. Regarding the
lingering warranty exposure, we have increased the reserves on our balance
to account for this exposure."
nine-month period ended March 31, 2007, consolidated sales increased to $15.8
million, up 34.5 percent from the $11.7 million for the nine months ended March
31, 2006. Gross profit for the nine months increased 13.0 percent compared
the same period in the previous year due to the higher sales levels. Gross
profit as a percentage of sales decreased to 34.9 percent for the nine months
compared to 41.6 percent for the nine months ended March 31, 2006 due to
warranty expenses and increased inventory reserve coupled with the expected
lower gross margin levels in the Astromec component products. Selling and
General and Administrative expenses increased to $3.1 million for the nine
months from $2.5 million last year, due to the inclusion of the FAS 123(R)
expenses and the addition of Astromec. Company-funded research and development
expenses increased 30.3 percent, to $1.9 million for the nine months from $1.5
million last year due to higher current and new product development cost and
addition of Astromec. Consolidated operating profit for the nine months
decreased to $471,000 compared to $912,000 for the same period in the previous
year due to the lower gross margin coupled with the higher level of SG&A and
engineering expenses. Net income for the nine months was $319,000 or $0.03
share on a basic and diluted basis (based on 9.8 million shares), as compared
a net income of $596,000 or $0.06 per share on a basic and diluted basis for
nine months ended March 31, 2006 (based on 10.0 million shares).
completed the first nine months of fiscal year 2007 with cash and cash
equivalents of $319,000, compared to cash and cash equivalents of $358,000
June 30, 2006. The Company generated nearly $300,000 in operating cash during
the fiscal year and kept the credit line borrowings even at $1,200,000 during
that period, leaving $800,000 of its credit line available at the end of the
quarter. Total working capital was $6.5 million as of March 31, 2007 compared
$6.1 million on June 30, 2006. Shareholders' equity increased 4.5 percent to
$12.6 million from $12.1 million as of June 30, 2006.
and all others are invited to listen to a conference call discussing the third
quarter 2007 results today at 4:30 p.m. Eastern Time. The call is scheduled
be broadcast live over the Internet on Tuesday, May 15, 2007 at 4:30 p.m.
Eastern Time and may be accessed by visiting the Company's website at
Murphy, Chief Executive Officer and Jeff Ritchey, Chief Financial Officer,
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. 4620329. You may identify
call as the Pro-Dex Third Quarter Earnings Call.
Inc., with operations in Santa Ana, California, Beaverton, Oregon and Carson