Full Press Release Details
Contact: Richard L. Van Kirk,
Chief Executive Officer
PRO-DEX, INC. ANNOUNCES FISCAL 2016
AND SIX-MONTH RESULTS
February 11, 2016 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2016 second quarter ended December
31, 2015. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2016 with the Securities
and Exchange Commission today.
Net sales for the three
months ended December 31, 2015 increased $2.6 million, or 95%, to $5.4 million from $2.8 million for the three months ended December
31, 2014, due primarily to increases in medical device revenues as well as an additional medical device product launch during the
quarter. Gross profit for the three months ended December 31, 2015 increased $843,000, or 121%, to $1.5 million from $696,000 for
the same period in fiscal 2015. Contributing to this increase were the increase in sales volume, described above, and improved
absorption of our fixed manufacturing overhead as compared to the corresponding quarter in fiscal 2015.
(which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2015
increased $54,000 or 5% to $1.1 million compared to the prior fiscal year's corresponding quarter, reflecting primarily increased
Income from continuing
operations for the quarter ended December 31, 2015 increased by $593,000 to $391,000, compared to a loss from continuing operations
of $202,000 in the corresponding quarter in fiscal 2015. Net income for the quarter ended December 31, 2015 was $391,000, or $0.09
per share, compared to a net loss of $192,000, or $0.05 per share, for the corresponding quarter in fiscal 2015.
Net sales for the six
months ended December 31, 2015 increased $4.1 million, or 77%, to $9.5 million from $5.4 million for the six months ended December
31, 2014, due primarily to increases in medical device revenues, which represents approximately 70% of our revenue for the six
months ended December 31, 2015.
Gross profit for the
six months ended December 31, 2015 increased $1.1 million, or 70% compared to the same period in fiscal 2015.
(which include selling, general and administrative, and research and development expenses) for the six months ended December 31,
2015 increased 10% to $2.3 million from $2.1 million in the prior fiscal year's corresponding period, reflecting primarily
increased selling expenses associated with our Fineline Molds division, a business we acquired in the third quarter of
and increased general and administrative expenses mostly related to our investment in real property located in Ramsey, Minnesota
as well as increased research and development personnel costs to assist with our growing portfolio of medical drivers.
Income from continuing
operations for the six months ended December 31, 2015 was $265,000, compared to a loss from continuing operations of $383,000 for
the corresponding period in fiscal 2015. Net income for the six months ended December 31, 2015 was $265,000, or $0.06 per share,
compared to a net loss of $248,000, or $0.09 per share, for the corresponding period in fiscal 2015.
Van Kirk, the Company's President and Chief Executive Officer, commented, "We are extremely pleased with our second
quarter results as our turnaround continues and gains momentum. I commend the entire Pro-Dex team for their success in making timely
shipments to our key customers and completing the design of another important surgical driver which marks the third completed product
development project in the last nine months. In addition, we remain excited about our strong backlog as well as new opportunities
in our core medical device business as we look to grow the company further."
excited to have announced a return to profitability, and appreciate the patience of our shareholders while we have made numerous
changes, we believe strongly in continuous improvement. To that end we anticipate making appropriate and measured investments to
continue to strengthen our team and operations."
About Pro-Dex, Inc.:
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, factory automation, semi-conductor and scientific research
markets. Its Fineline Molds division manufactures plastic injection molding for a variety of industries. Pro-Dex's products are
found in hospitals, dental offices, medical engineering labs, scientific research facilities and high tech manufacturing operations
Pro-Dex also provides
quality and regulatory consulting services, as well as engineering consulting and placement services through its Engineering Services
Division. 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
(In thousands, except share amounts)
| December 31, 2015 | June 30, 2015 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 1,053 | $ | 697 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $20 and $36, respectively | 1,831 | 2,326 | ||||||
| Due from factor | 912 | - | ||||||
| Unbilled receivables | 108 | 853 | ||||||
| Other current receivables | 10 | 28 | ||||||
| Inventory | 4,481 | 4,310 | ||||||
| Prepaid expenses | 122 | 124 | ||||||
| Investment in Ramsey property and related notes receivable | 1,461 | - | ||||||
| Deferred income taxes | 43 | 70 | ||||||
| Total current assets | 10,021 | 8,408 | ||||||
| Equipment and leasehold improvements, net | 1,225 | 1,470 | ||||||
| Investment in Ramsey property and related notes receivable | - | 1,652 | ||||||
| Goodwill | 353 | 353 | ||||||
| Intangibles | 480 | 547 | ||||||
| Other assets | 88 | 86 | ||||||
| Total assets | $ | 12,167 | $ | 12,516 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 1,286 | $ | 1,867 | ||||
| Accrued expenses | 1,036 | 1,202 | ||||||
| Deferred revenue | 282 | 594 | ||||||
| Notes payable | 522 | 24 | ||||||
| Capital lease obligations | 1 | 7 | ||||||
| Total current liabilities | 3,127 | 3,694 | ||||||
| Deferred income taxes | 43 | 70 | ||||||
| Deferred rent | 173 | 204 | ||||||
| Note payable, net of current portion | 58 | 70 | ||||||
| Total non-current liabilities | 274 | 344 | ||||||
| Total liabilities | 3,401 | 4,038 | ||||||
| Shareholders' equity: | ||||||||
| Common shares; no par value; 50,000,000 shares authorized; 4,149,004 and 4,139,579 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively | 18,434 | 18,411 | ||||||
| Accumulated deficit | (9,668 | ) | (9,933 | ) | ||||
| Total shareholders' equity | 8,766 | 8,478 | ||||||
| Total liabilities and shareholders' equity | $ | 12,167 | $ | 12,516 |
PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
| Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net sales | $ | 5,439 | $ | 2,792 | $ | 9,535 | $ | 5,387 | ||||||||
| Cost of sales | 3,900 | 2,096 | 6,938 | 3,863 | ||||||||||||
| Gross profit | 1,539 | 696 | 2,597 | 1,524 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | 256 | 186 | 470 | 328 | ||||||||||||
| General and administrative expenses | 452 | 459 | 986 | 950 | ||||||||||||
| Research and development costs | 435 | 444 | 863 | 829 | ||||||||||||
| Total operating expenses | 1,143 | 1,089 | 2,319 | 2,107 | ||||||||||||
| Operating income (loss) | 396 | (393 | ) | 278 | (583 | ) | ||||||||||
| Interest expense | (20 | ) | (2 | ) | (26 | ) | (3 | ) | ||||||||
| Interest income | 1 | 4 | - | 5 | ||||||||||||
| Gain from disposal of equipment | 14 | 1 | 14 | 1 | ||||||||||||
| Realized gain on sale of investments | - | 59 | - | 59 | ||||||||||||
| Income (loss) from continuing operations before income taxes | 391 | (331 | ) | 266 | (521 | ) | ||||||||||
| Income tax (expense) benefit | - | 129 | (1 | ) | 138 | |||||||||||
| Income (loss) from continuing operations | 391 | (202 | ) | 265 | (383 | ) | ||||||||||
| Income from discontinued operations, net of income taxes | - | 10 | - | 21 | ||||||||||||
| Net income (loss) | $ | 391 | $ | (192 | ) | $ | 265 | $ | (362 | ) | ||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Unrealized gain from marketable equity investments | - | 162 | - | 173 | ||||||||||||
| Less: Reclassification of realized gains included in net loss | - | (59 | ) | - | (59 | ) | ||||||||||
| Comprehensive income (loss) | $ | 391 | $ | (89 | ) | $ | 265 | $ | (248 | ) | ||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Income (loss) from continuing operations | $ | 0.09 | $ | (0.05 | ) | $ | 0.06 | $ | (0.09 | ) | ||||||
| Income from discontinued operations | - | - | - | - | ||||||||||||
| Net income (loss) | $ | 0.09 | $ | (0.05 | ) | $ | 0.06 | $ | (0.09 | ) | ||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 4,143 | 4,170 | 4,142 | 4,190 | ||||||||||||
| Diluted | 4,165 | 4,170 | 4,161 | 4,190 | ||||||||||||
| Common shares outstanding | 4,149 | 4,170 | 4,149 | 4,170 |
PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
| Six Months Ended December 31, | ||||||||
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 265 | $ | (362 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 334 | 259 | ||||||
| Gain on sale of investments | - | (59 | ) | |||||
| Gain from disposal of equipment | (14 | ) | (1 | ) | ||||
| Share-based compensation | 2 | 11 | ||||||
| Deferred income tax benefit | - | (77 | ) | |||||
| Bad debt expense (recovery) | (16 | ) | (3 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, due from factor and other current receivables | (383 | ) | 673 | |||||
| Unbilled receivables | 745 | (342 | ) | |||||
| Inventory | (171 | ) | (275 | ) | ||||
| Prepaid expenses and other assets | (2 | ) | (103 | ) | ||||
| Accounts payable, accrued expenses and deferred rent | (778 | ) | 326 | |||||
| Deferred revenue | (312 | ) | 269 | |||||
| Income taxes payable | - | (53 | ) | |||||
| Net cash provided by (used in) operating activities | (328 | ) | 263 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of investments | - | (12 | ) | |||||
| Purchases of equipment and leasehold improvements | (21 | ) | (209 | ) | ||||
| Acquisition of Huber Precision | - | (209 | ) | |||||
| Purchase of Investment in Ramsey property and related notes receivable | (86 | ) | (1,205 | ) | ||||
| Proceeds from liquidation of Ramsey assets | 277 | - | ||||||
| Proceeds from sale of equipment | 14 | 1 | ||||||
| Proceeds from sale of investments | - | 318 | ||||||
| Increase in intangibles | (1 | ) | (61 | ) | ||||
| Net cash provided by (used in) investing activities | 183 | (1,377 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Purchase of common stock | - | (94 | ) | |||||
| Proceeds from note payable | 500 | - | ||||||
| Proceeds from exercise of options and ESPP contributions | 21 | - | ||||||
| Payments made for common stock rights offering | - | (3 | ) | |||||
| Borrowings from Summit Loan | 1,600 | - | ||||||
| Repayments on Summit Loan | (1,600 | ) | - | |||||
| Principal payments on notes payable and capital lease | (20 | ) | (4 | ) | ||||
| Net cash provided by (used in) financing activities | 501 | (101 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 356 | (1,215 | ) | |||||
| Cash and cash equivalents, beginning of period | 697 | 3,188 | ||||||
| Cash and cash equivalents, end of period | $ | 1,053 | $ | 1,973 |