Full Press Release Details
| Contact: | Mark Murphy, Chief Executive Officer |
| (949) 769-3200 |
INC. ANNOUNCES FISCAL SECOND QUARTER 2010 RESULTS
reports second quarter sales of $5.7 million and earnings of $0.06 per
announces the departure of Executive Vice President / Business Development
IRVINE, CA, February 4,
2010 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced its financial results for
the fiscal second quarter 2010, the period ending December 31,
the second quarter ended December 31, 2009, increased 9% to $5.7 million
compared to $5.2 million for the previous year's second quarter, due to
continued increases in medical device sales. The higher medical
device sales were substantially driven by the new arthroscopic surgical
hand-piece that began shipping at the end of the first fiscal
quarter. Net income for the second quarter was $580,000 or $0.06 per
share compared to a net income of $81,000 or $0.01 per share for the previous
year's second quarter.
profit for the quarter ended December 31, 2009, increased to $2.0 million, a 35%
gross profit margin, compared to gross profit of $1.9 million or 37% gross
profit margin in last year's second quarter. The profit increase was
consistent with the increased sales; however the gross profit margin was reduced
due to a lower margin mix of products.
expenses for the second quarter (excluding the impairment charge discussed
below) declined due to cost saving measures implemented last
year. The cost savings measures were primarily structurally decreased
in this quarter's net income were two non-recurring events:
non-recurring items created a net $0.04 per share profit in the
the second quarter of fiscal year 2010, the Company continued to strengthen its
balance sheet, generating an additional $561,000 of operating
cash. In the first six months of fiscal year 2010, the Company
generated $971,000 in operating cash, a significant improvement from the $56,000
in cash used in the first six months of fiscal year 2009. At December 31,
2009, the Company had cash and cash equivalents of $1,790,000 compared to
cash and cash equivalents of $1,124,000 as of June 30, 2009 and $406,000 as of
December 31, 2008. The Company's net debt (total debt less cash)
was $1.3 million at December 31, 2009, down from $2.2 million at June 30, 2009
and down from $3.9 million at December 31, 2008.
Murphy, the Company's President and Chief Executive Officer, commented, "We are
pleased to report another quarter of solid sales, earnings and cash generation.
Excluding both the negative impact of the patent write-off and the positive
impact of the tax gain, the Company's operating engine produced its third
consecutive two-cents per share quarter. And in an environment where
cash is critical, it is encouraging to post another half-million dollar positive
operating cash quarter. Stronger fiscal year 2010 sales, combined
with our reduced cost structure, have allowed the Company to function more
also announced today that Mr. Patrick Johnson will be leaving the employment of
the Company effective February 5, 2010. Mr. Johnson joined the Company in
2000 as the General Manager of the Micro Motors Division, served as CEO from
2002 to 2006, and as Executive Vice President and Chief Business Development
on this event, Mr. Murphy stated, "Patrick has made significant contributions to
Pro-Dex during his 10 year career here. He led the reinvention of the
Company in the early 2000's, transforming Pro-Dex from a dental hand-piece
company into a comprehensive medical device development and manufacturing
player. His leadership has framed a large part of who we are today.
Patrick will next be applying his leadership skills to a major humanitarian
relief effort in Haiti, heading up a project called WorldBed. On
behalf of the Company, I want to thank Patrick and wish him all the best in his
and all others are invited to listen to a conference call discussing the second
fiscal quarter 2010 results, today at 4:30 p.m. Eastern Time. The call is
scheduled to be broadcast live over the Internet and may be accessed by visiting
the Company's website at http://www.pro-dex.com
or directly at http://www.videonewswire.com/event.asp?id=65942. 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 (877) 356-8625 U.S. and (706)
634-9779 International, conference I.D. 54190245. You may identify the call as
the Pro-Dex Second Quarter Earnings Call. An online archive of the broadcast
will be available within two hours of the completion of the call and will be
accessible on the Company's website for 365 days. Additionally, a telephone
replay will be available 2 hours after the call for 48 hours by dialing (800)
642-1687 U.S. or (706) 645-9291 for international callers, conference I.D.
Inc., with operations in Irvine, California, Beaverton, Oregon and Carson City,
Nevada, specializes in bringing speed to market in the development and
manufacture of technology-based solutions that incorporate miniature rotary
drive systems, embedded motion control 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, commercial and military aircraft, scientific research
facilities and high tech manufacturing operations around the world.
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
INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
| 12/31/2009 | 6/30/2009 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,790,000 | $ | 1,124,000 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $57,000 at 12/31/09 and $52,000 at 6/30/09 | 2,300,000 | 2,515,000 | ||||||
| Other Current Receivables | - | 16,000 | ||||||
| Inventories | 3,216,000 | 3,365,000 | ||||||
| Prepaid expenses | 302,000 | 117,000 | ||||||
| Prepaid income taxes | - | 118,000 | ||||||
| Deferred income taxes | 643,000 | - | ||||||
| Total current assets | 8,251,000 | 7,255,000 | ||||||
| Property, plant, equipment and leasehold improvements, net | 5,706,000 | 5,981,000 | ||||||
| Other assets: | ||||||||
| Goodwill | 2,997,000 | 2,997,000 | ||||||
| Intangibles - Patents, net | - | 147,000 | ||||||
| Other | 87,000 | 87,000 | ||||||
| Total other assets | 3,084,000 | 3,231,000 | ||||||
| Total assets | $ | 17,041,000 | $ | 16,467,000 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 568,000 | $ | 827,000 | ||||
| Accrued expenses | 1,561,000 | 1,394,000 | ||||||
| Income taxes payable | 64,000 | 53,000 | ||||||
| Current Portion of T.I. Loan | 400,000 | 400,000 | ||||||
| Current portion of real estate loan | 34,000 | 33,000 | ||||||
| Total current liabilities | 2,627,000 | 2,707,000 | ||||||
| Long-term liabilities: | ||||||||
| Notes Payable - T.I. Loan | 1,167,000 | 1,367,000 | ||||||
| Real estate loan | 1,511,000 | 1,528,000 | ||||||
| Deferred income taxes | 184,000 | 171,000 | ||||||
| Deferred rent | 236,000 | 212,000 | ||||||
| Total long-term liabilities | 3,098,000 | 3,278,000 | ||||||
| Total liabilities | 5,725,000 | 5,985,000 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Common shares; no par value; 50,000,000 shares authorized; 9,668,671 shares issued and outstanding Dec 31, 2009 9,668,671 shares issued and outstanding June 30, 2009 | 16,645,000 | 16,574,000 | ||||||
| Accumulated deficit | (5,329,000 | ) | (6,092,000 | ) | ||||
| Total shareholders' equity | 11,316,000 | 10,482,000 | ||||||
| Total liabilities and shareholders' equity | $ | 17,041,000 | $ | 16,467,000 |
notes to condensed consolidated financial statements.
INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
months ended December 31 (unaudited)
| 2009 | 2008 | |||||||
| Net sales | $ | 5,696,000 | $ | 5,237,000 | ||||
| Cost of sales | 3,696,000 | 3,305,000 | ||||||
| Gross profit | 2,000,000 | 1,932,000 | ||||||
| Operating expenses: | ||||||||
| Selling expense | 353,000 | 329,000 | ||||||
| General and administrative expenses | 799,000 | 833,000 | ||||||
| Impairment of intangible asset | 140,000 | - | ||||||
| Research and development costs | 576,000 | 677,000 | ||||||
| Total operating expenses | 1,868,000 | 1,839,000 | ||||||
| Income from operations | 132,000 | 93,000 | ||||||
| Other income (expense): | ||||||||
| Royalty income | 2,000 | 8,000 | ||||||
| Interest expense | (53,000 | ) | (60,000 | ) | ||||
| Total | (51,000 | ) | (52,000 | ) | ||||
| Income before (benefit) for income taxes | 81,000 | 41,000 | ||||||
| (Benefit) for income taxes | (499,000 | ) | (40,000 | ) | ||||
| Net income | $ | 580,000 | $ | 81,000 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.06 | $ | 0.01 | ||||
| Diluted | $ | 0.06 | $ | 0.01 | ||||
| Weighted average shares outstanding - basic | 9,668,671 | 9,698,913 | ||||||
| Weighted average shares outstanding - diluted | 9,695,518 | 9,714,917 |
notes to condensed consolidated financial statements.
INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
months ended December 31 (unaudited)
| 2009 | 2008 | |||||||
| Net sales | $ | 11,329,000 | $ | 10,893,000 | ||||
| Cost of sales | 7,456,000 | 7,206,000 | ||||||
| Gross profit | 3,873,000 | 3,687,000 | ||||||
| Operating expenses: | ||||||||
| Selling expense | 641,000 | 673,000 | ||||||
| General and administrative expenses | 1,526,000 | 1,681,000 | ||||||
| Impairment of intangible asset | 140,000 | - | ||||||
| Research and development costs | 1,197,000 | 1,396,000 | ||||||
| Total operating expenses | 3,504,000 | 3,750,000 | ||||||
| Income (loss) from operations | 369,000 | (63,000 | ) | |||||
| Other income (expense): | ||||||||
| Royalty income | 3,000 | 9,000 | ||||||
| Interest expense | (103,000 | ) | (121,000 | ) | ||||
| Total | (100,000 | ) | (112,000 | ) | ||||
| Income before (benefit) for income taxes | 269,000 | (175,000 | ) | |||||
| Provision (Benefit) for income taxes | (494,000 | ) | (138,000 | ) | ||||
| Net Income (loss) | $ | 763,000 | $ | (37,000 | ) | |||
| Net income (loss) per share: | ||||||||
| Basic | $ | 0.08 | $ | (0.00 | ) | |||
| Diluted | $ | 0.08 | $ | (0.00 | ) | |||
| Weighted average shares outstanding - basic | 9,668,671 | 9,741,160 | ||||||
| Weighted average shares outstanding - diluted | 9,686,331 | 9,741,160 |
notes to condensed consolidated financial statements.
INC. and SUBSIDIARIES